Michael McCormack (Riverina, National Party) Share this | Link to this | Hansard source

The Competition and Consumer Amendment (Australian Energy Regulator Separation) Bill 2025 is intended to separate the Australian Energy Regulator from the Australian Competition and Consumer Commission. This will enable the AER to be an independent body with its own board under the Public Governance, Performance and Accountability Act 2013. The AER has been around since July 2005. By the year after that, all 13 bodies previously responsible for energy regulation had transferred responsibility to the AER. We know that decisions made by the regulator are subject to appeal, as you would expect.

Many years ago the energy grid was the responsibility of the states. Certainly states looked after power. These days, of course, more and more onus is placed on the Commonwealth, whether it's to run power or whether it's to fund state schools. I appreciate that the states still make up the bulk of the funding for this, as they should, but there is more and more pressure on the Commonwealth—on taxpayers—to foot the bill for things which used to be solely the remit of the states. It happens in health, too, and certainly both sides of this parliament have overseen a transition whereby the Commonwealth is picking up the tab for what was once very much the remit of the states.

The AER is part of the Australian Competition and Consumer Commission. It enforces the rules established by the Australian Energy Market Commission. The ACCC, for all of the complaints it sometimes receives, does a good job, I believe, and I say that having been a minister with oversight responsibility for the commission. The ACCC has done some very good work over the years. Of course there's always more that it could do in all areas of endeavour, not the least of which is market deregulation, with the monopoly of the supermarkets, and even irrigation and water. We need to ensure that the ACCC, through a regulatory and legislative process, has the teeth to do the work that it does for and on behalf of the nation and for and on behalf of consumers.

The AER's present functions are focused on regulating the natural-monopoly transmission and distribution sectors of the national electricity market. It very much overseas monitoring the wholesale electricity market, enforcing electricity market rules. It's a difficult area. The AER's regulatory functions and powers are conferred upon it by the National Electricity Law and the National Electricity Rules, which govern all of these things.

We've seen quite a debate in recent hours, days, weeks, months, years and decades over energy prices and energy regulation. The default market offer, set by the Australian Energy Regulator, shows that average power bills are up as much as $806 per household. This is having a very harsh effect on ordinary, everyday Australians. I know it's so difficult—for farmers, factories, manufacturing and people just trying to manage household budgets—to pay the energy bills, which just seem to go up and up.

In the bill before the house, the changes being recommended come from several reviews. The Vertigan review of 2015 suggested that the AER should have full control over its management and finances by becoming an independent entity. The Finkel review, two years later, highlighted that the AER's separation from the ACCC had not yet occurred. That particular investigation discussed how information sharing could still be maintained. Then we had, in 2020, the Edwards review, which noted that many in the energy sector supported the AER's independence and better governance of the energy market, so to speak.

As I say, the energy market is a large and complex thing; we only have to look at what is going on in the energy systems at the moment. The government wants us to go renewables only. We have 28,000 kilometres of transmission lines being proposed and being constructed. This is having a huge effect on regional communities. Not that long ago, I went up into the old Tumbarumba shire area—what is now the area of Snowy Valleys Council—to look at the transmission lines being constructed there. I note with some concern that the metal frameworks are not being built with Australian steel. That is a shame, but there is a lot going on in this space.

At present, the AER does not employ its own staff. Instead, employees from the ACCC assist the AER in its functions. The ACCC chair is responsible for managing the staff and ensuring that the duties of the AER are indeed met. The Australian Energy Regulator is already established as a body corporate pursuant to section 44AE of the Competition and Consumer Act, and it's constituted by five members pursuant to section 44AG of that particular act. Section 44AAL currently provides that the ACCC and the AER are a single listed entity for the purposes of the finance law within the meaning of the Public Governance, Performance and Accountability Act. I had some carriage of that when I was the parliamentary secretary to the Minister for Finance at the time, Senator Matthias Cormann. He did an outstanding job in that portfolio. The chair of the ACCC is the accountable authority of that listed entity. Section 27 of the Competition and Consumer Act currently provides that the staff at the ACCC are to be engaged under the Public Service Act 1999, that the ACCC chair and staff together constitute a statutory agency, and that the ACCC chair is the head of the statutory agency. It's a lot to place on the ACCC chair. Whoever is in that job does an outstanding job under a lot of pressure. There are a lot of moving parts in that particular role.

We should be thankful for our Public Service. Our Public Service serves the Australian public in a very diligent and thorough way, and I think we saw that best during the COVID-19 pandemic. What we saw then was public servants working so very hard, not only on the health side of things to ensure that the safety, wellbeing and health of Australians was paramount, first and foremost, but also on the JobKeeper provisions that were put in place by the coalition government at the time. They kept the doors of business open, kept the lights on, kept the bills being paid and kept the economy ticking over. We should be very, very thankful for what our public servants did. There was no finer public servant at the time than Dr Steven Kennedy. I know he's had a number of roles as secretary of various departments. He looked after Infrastructure and he looked after Treasury. The work that he did during the global pandemic saved lives and kept people's businesses from going insolvent—from going bankrupt. I owe him an eternal debt of gratitude for the work that he did. I say that in all earnest honesty. He was outstanding.

On this bill, section 44AAC of the CCA currently provides, as I say, that the ACCC chair does make staff and consultants available to the AER to assist the Australian Energy Regulator to perform its functions. At times, that is required, requested and needed. The combination of these arrangements means that, while the Australian Energy Regulator's regulatory functions are entirely separate, as they should be, from the ACCC, the current accountable authority and the head of the agency is the ACCC chair. They hold statutory accountability for meeting the requirements of the PGPA Act and the Public Service Act. In essence, the buck stops with the ACCC chair—one could say, as it should.

These governance arrangements were considered appropriate when the Australian Energy Regulator was first established, 20 years ago. As to the bill's intention, the AER's statutory functions and powers, and the number of staff required to assist in performing these functions and powers, have materially changed over those two decades, and, as the Public Service changes and modernises, you have to bring these sorts of bills before the parliament to keep up with those changes in the Public Service.

This bill was introduced to parliament last year. It passed the House earlier this year, but it wasn't considered by the Senate prior to the May 2025 election.

In the lead-up to the election, it was our clear view, as a coalition, that the government should be focused on lowering the cost of electricity and not making bureaucratic changes. That was the view we had then. We still believe that the government should and must do more to focus on lowering those power bills and to do whatever the government can do, indeed, to bring energy prices down—not because it's a political debate, not because it's something that we can differ from the government on in this chamber, but because people out there in our electorates right across the nation are demanding, are crying out, are pleading, for energy relief.

I appreciate that the government has brought in some subsidies, and they will say, 'Well, this is designed to help those ordinary, everyday Australians doing it tough and struggling.' But we can't impoverish pensioners. We can't see the likes of Tomago going to the wall.

The Tomago aluminium smelter and plant uses up about 10 or 11 per cent of New South Wales's power, and having it not functioning will indeed lower emissions, and that might meet the Minister for Climate Change and Energy's remit in trying to bring emissions down. But that's not the point, is it?

The point is that we cannot de-industrialise our nation. The point is that we have to give our farmers the reliable, affordable energy to be able to grow the world's best food and fibre. The point is that we have to make sure that Mr and Mrs Average out there can pay their power bills and so can pensioners. Right across the board, it is not right—what we're doing at the moment.

That is why we opposed this particular bill when it was first put on 24 July this year. The member for Wannon, in his capacity as the shadow minister for energy and emissions reduction, as well as the shadow assistant minister for energy and emissions reduction, Senator Dean Smith from Western Australia, were briefed on this bill.

We see the need for it, given the fact that, as I say, the Public Service has modernised. We understand why it is necessary. But, again, I do implore those members opposite: when we are talking about the Australian Energy Regulator, when we're talking about the power grid and when we're talking about servicing the nation with reliable, affordable energy, the government must do more. It has to bring about policies, and use those levers that it can, to help the economy and to help the Australian people that it purports to serve.

Claire Clutterham (Sturt, Australian Labor Party) Share this | Link to this | Hansard source

I rise today to speak in support of the Competition and Consumer Amendment (Australian Energy Regulator Separation) Bill 2025. This is important legislation to separate the Australian Competition and Consumer Commission from the Australian Energy Regulator. While this legislation is technical in nature, for households and businesses in my electorate of Sturt this reform is about something more real: lowering power bills, providing more reliable energy and laying the foundations for a stronger future. This Albanese Labor government is getting on with the job of delivering real energy relief and real reform of the energy market. That's why this legislation matters. It's being conducted in parallel with sustained efforts to transition our economy to renewable energy and bring down power bills for all Australians.

The Australian Energy Regulator has a big job. It regulates energy networks and wholesale and retail markets in Australia to ensure that they are secure, reliable and affordable for consumers. It sets the rules for our electricity and gas markets, making sure companies play fair and consumers get the best deal. But it's been tied to the Australian Competition and Consumer Commission, an organisation with responsibilities that span the entire economy, and that model has held back the Australian Energy Regulator's independence and focus.

With the needs of consumers at the top of its list of priorities, the Australian Energy Regulator is one of three major market bodies that oversee national electricity and gas markets in Australia: firstly, the Australian Energy Market Commission, which develops the rules by which the markets operate; secondly, the Australian Energy Market Operator, which manages the day-to-day operations of the markets; and then, thirdly, the Australian Energy Regulator, which monitors performance and compliance with the rules.

Since its inception in 2005, the environment in which the Australian Energy Regulator operates has significantly expanded, as has its remit and functions. In the 2005 financial year, the Australian Energy Regulator had 15 employees and an annual program budget of $6½ million. This is significantly less than what the data tells us about the 2024 financial year, which recorded 400 employees and an annual program budget of $95.67 million. Increased responsibility, increased resources and increased budget accountability mean that governance arrangements need to be re-examined to ensure that they are fit for purpose.

The separation of the Australian Energy Regulator from the Australian Competition and Consumer Commission addresses these governance issues in two critical ways: firstly, by aligning responsibility for the regulatory functions of the Australian Energy Regulator as the independent energy regulator; and, secondly, by prescribing influential control over the Australian Energy Regulator's employees and funding, which is currently within the sphere of the ACCC. Further, without this legislation, the Australian Competition and Consumer Commission chair would retain technical responsibility for the Australian Energy Regulator's leadership, governance and strategic direction in circumstances where it is in fact the Australian Energy Regulator's independent board that is ultimately accountable for those things. This disconnect between responsibility and accountability does not represent good governance, and good governance in energy market regulation is critical in circumstances where Australia's energy markets are embarking on a significant period of transition.

In terms of the mechanics of the legislation, it will amend the Competition and Consumer Act 2010 to legally separate the AER from the ACCC, enabling the Australian Energy Regulator to have operational control of its own governance arrangements, its own resources and its own staff. In further technical terms, for the purposes of the Public Governance, Performance and Accountability Act 2013, the legislation establishes the Australian Energy Regulator as a non-corporate Commonwealth entity that is separate from the ACCC for the purposes of that act but as a non-corporate Commonwealth entity not legally separate from the government. Importantly, this legislation does not change the role, obligations and function of the Australian Energy Regulator as the independent energy regulator. That is not being changed by this legislation.

Without the passage of this legislation the following issues would remain. Firstly, the Australian Energy Regulator and Australian Competition and Consumer Commission would remain as a single Commonwealth entity under finance law, with the Australian Energy Regulator Board continuing to have the powers required to fulfil its regulatory role but no authoritative control over the resources and people needed to carry out that important regulatory work. Secondly, the dual ministerial responsibility would continue with respect to the activities of the Australian Energy Regulator. Thirdly, the fundamental disconnect between traditional governance of the Australian Energy Regulator employees, led by the Australian Consumer and Competition Commission, and the organisational strategy and direction, led by the board of the AER, would continue, exacerbating the governance risks to both entities and increasing the probability that inefficient and often duplicative governance processes would have to be undertaken to manage that risk.

So this straightforward and minimalist legislation resets that improves the governance environment without altering the primary objectives of the Australian Energy Regulator, which is the monitoring of compliance, with rules applicable to the energy markets, to the benefit of all Australian consumers. With this legislation, we give the Australian Energy Regulator the independence and the authority it needs to meet the challenges of our time. Make no mistake: these challenges are huge. We are in the middle of the most significant transformation of our energy sector since electricity was first switched on in Australia: the transition away from dirty, unreliable, ageing coal to renewable energy. This transition to renewables is not optional; it is essential. It is essential for our planet and for households struggling with rising prices. It is essential for businesses that want certainty to invest. Above all, I say again, it is essential if we are serious about tackling climate change.

In my electorate of Sturt, I've seen how deeply my community care about our future. I recently met with the Electrify Adelaide group. This is a passionate group of local people who are dedicated to advancing climate action by encouraging households to electrify and switch from fossil fuels. They understand that electrification means not only lower emissions but also cheaper, healthier homes.

I've also met with Catherine, Cathy and Andrea in my electorate. They formed Grandmas for Climate Action. These women are motivated by the most profound concern: the future of their children and grandchildren. They are asking, 'What type of planet are we leaving for future generations?' Their voices are powerful reminders that climate change is not an abstract policy debate. It's about the kind of country and the kind of planet that we will hand down to the next generation. It's not based on ideology; it is based on science and data.

I am proud that my home state of South Australia is already leading the world in decarbonising its energy sector. In almost two decades in South Australia we have gone from a total reliance on fossil fuels to a grid where around 80 per cent of our electricity comes from renewable sources, with wind and solar being the primary contributors. In South Australia, we really are leading the way. We are on track to reach 100 per cent net renewable energy by 2027, with billions invested in large-scale renewables and more in the pipeline.

Recently, the 412-megawatt Goyder South wind farm in Burra in South Australia's regions was opened. It's the largest in the state, with 75 turbines boosting wind generation by more than 20 per cent and powering homes and businesses including BHP, which will draw power from the Goyder wind farm. It is forecast to produce roughly 1.5 terawatt hours of renewable energy each year.

And then in South Australia today, as of 4 pm, the Australian Energy Market Operator fuel mix dashboard showed that 13 per cent of our energy was being generated by solar and 82 per cent was being generated by wind. We know that generation costs of wind energy and solar energy are next to zero. We know that the more renewables there are in the system, the less we need to depend on unreliable, dirty, coal fired power. This will provide additional cost relief on energy bills when more renewables come into the grid. Our pathway to 100 per cent net renewable energy by 2027 in South Australia is something that I am proud of. It is an extraordinary achievement that I hope to see replicated across this great country.

South Australia also leads the nation in rooftop solar, and my electorate of Sturt ranks second in the country for the uptake of the Albanese Labor government's Cheaper Home Batteries Program. Last week, we cracked 1,600, so thousands of families in Campbelltown, in Magill, in Glynde, in St Peters and in Rostrevor are generating their own clean energy, driving down their bills and contributing to a more sustainable energy grid, driving down bills for everyone.

And then we have our community battery in Sturt, an initiative that I'll continue to speak about and champion. Based at Tuku Wirra Reserve in Magill, this community battery provides energy to multiple low-income SA Housing Trust tenants in Magill and the surrounding suburbs. This is giving them access to electricity stored in the community battery through South Australia's Virtual Power Plant. The battery stores excess renewable energy from the grid when it is abundant for use at later times when demand and the cost is high. By doing this as part of South Australia's Virtual Power Plant, it delivers renewable energy and the cheapest residential electricity rate in South Australia. It delivers this to families doing it tough—to eligible low-income houses who need power prices to be dropping. Since it came online, the data shows us that it has driven down annual power prices for those families by an average of $562.

The approach of the Albanese Labor government is clear. We believe in cheaper energy bills, we believe in cleaner energy led by renewables and we believe in strong regulation. It is not one or the other; it is all of these things together. The legislation to separate the Australian Energy Regulator from the Australian Competition and Consumer Commission is part of that framework. It strengthens independence, it builds public trust and it ensures energy policy is a priority. The people of Sturt and the people of Australia deserve an energy regulator that works for them, for households, for businesses and for a cleaner and more affordable future. I commend the bill to the House.

Barnaby Joyce (New England, National Party) Share this | Link to this | Hansard source

Obviously, we are on the premise of regulation. There is never a place that needs more regulation and more staff than the absolute swindle which is intermittent power. Every time, it never ceases to amaze me. As we speak, we have the Chinese company BYD, or 'build your dreams'. They get carbon credits when they bring cars into Australia, and even though they've only sold 38,000 they've brought 51,000 in. I wonder why! It's obviously virtue. It's virtue. They say it's because of the expanding market. Well, it's not really expanding. What's expanding is the money they're putting in their bank from the Australian taxpayer. That is what is expanding, and this continues expanding into so many sections. The previous speaker clearly said that they had to increase the staff for all this regulation. I'm not surprised. You need a lot of work when you have a decreasing supply of electricity and increasing demand.

We have been absolutely done over with this swindle, which is premised on faux virtue. The idea in this chamber that we're going to change the climate—that we're going to do it here in Australia by ourselves—is remarkable. Actually, it's insane. When you look at it, what is this virtue actually doing? The reality is, in an attempt to keep a carbon dioxide reduction policy, we are relying on increasing the amount of intermittent power and maintaining the regulatory caveats on the vegetation on farmers' private land. This is putting up the price of electricity, hurting the farmers, hurting the poorest, taking away private property rights, pushing many small businesses to the wall, de-industrialising Australia, devastating our landscape in regional Australia and weakening our capacity to defend ourselves. That is an incredible policy you've got yourself there. That's a piece of genius that you've devised for our nation.

In an alternative universe, the minister comes in here and tells us that power prices are going down. I don't know. I just can't get it, because they're not going down. Is there a person who believes their power bill is getting cheaper? It's gone through the roof. Whether it's a pie shop, a hairdresser or the Tomago smelter, it's all the same. They're under the pump, with record insolvencies and companies leaving. Rio Tinto is a pretty smart organisation. If they honestly believed that, due to our electricity policy, our carbon dioxide policy, our power policy, there was this nirvana coming and power prices would be so cheap, do you think they'd be going? Do you think they're dumb? They've done the research. They've said, 'We've done the research on this. This country has gone completely off its head with its power policy, and we're leaving,' just as Alcoa in Kwinana is leaving, the plastic industry and the urea industry have gone and we're down to two oil refineries.

Don't you think that, if all these people thought that Australia had got it all together, they'd be coming here? Wouldn't they be lined up? They'd be buying industrial real estate across Australia to build their new factories, but, of course, they're not. They're leaving. They're just saying the nice words on the way out the door. For the people who are the poorest, the people who can't afford their power bill—some of them have been getting booted out of their houses. The cost of living has gone through the roof. Have you changed the weather? Is there a difference? Can someone point me to something—'This has changed: we're down to two cyclones a year,' or, 'That's changed: we've reduced the number of heatwaves,' or, 'It's rained a bit more, or a bit less'?

It's an all-encompassing thing. What you do is say 'climate change' and then, apparently, you're allowed to get away with anything. I went badly at the Melbourne Cup—climate change. I had an argument with my wife—climate change. I've lost my pet—climate change. You just throw it out there, and as you soon as it's said you're not allowed to argue against it; you've just got to accept it. It's a religion. If you don't believe the religion, you're a denier. You're not a believer. You've got to be a believer: 'I'm a believer!' I don't know what you do then—speak in tongues and dance with serpents? I don't know what happens next, but it's a remarkable type of cult we've got ourselves into here.

It would all be funny if it weren't for what's actually happened, if we go to the facts. Let's go to statistics 101. There's been a direct correlation between the increase in intermittent power—don't call them renewables. There's nothing renewable about them at all. They end up as landfill. You have to build new ones after 15 years. What do you think? Do you think they're made out of fairy dust? They're made of steel, composite plastics, copper and oil. They've got the whole box and dice of unrenewable things in them, so they're not renewable. Have you noticed that, as you increase the amount of intermittent power, there's a direct correlation with the increase in the price of electricity? Fascinating. Maybe it's just coincidental—it just happens to have happened—or maybe it's cause and effect. I'll go with the latter.

We're not allowed to say 'coal fired power'. It's a religion. The believers say you're not allowed to say 'coal fired power'. It's evil; don't mention it. But when we had coal fired power we had, comparatively, some of the cheapest power on the planet, and we had heavy industry here. Now that we've got rid of coal fired power, we've got some of the dearest electricity on the planet, comparatively, and industry is leaving. Is there a penny dropping here? Yet we are told that everything is going to get better. All those companies leaving Australia—they're just stupid. The fact that China is building one coal fired power station every four days—they're just stupid; they're wasting their money. They're stupid, those Chinese. They don't know what they're up to. They're just a superpower. The fact that the United States of America is out and now its industry is growing again—that's just coincidence, just crazy facts. The fact that India is turning things around—the world is stupid, except for Australia. We are the shining light, and we're on this singular crusade. If you step outside this building you will see the benevolence of our work in the great ark of heaven, which will change because we managed to send poor Australians into destitution. That is what we are doing.

The only beneficiaries of this lunacy are billionaires. Who actually makes the money? Where does the money go? Follow the money. You'll find very rich Australian billionaires and you'll find multinational companies. I'll tell you who some of those 'really concerned environmentalists' are that have been benefitting from providing us with intermittent power. It's BP, British Petroleum. As we all know, they're terribly concerned about the environment. It's PETROS, the Malaysian oil refineries, among the biggest polluters in the world—they're are building them. It's Chinese real estate companies and Nigerian billionaires. It's all of these people. They're just so worried about the climate in Australia. That's why they've got to do this.

We have also seen, unfortunately, a lack of capacity to defend our nation. To defend a nation, you need to have an industrial base. You need intelligence, you need an air force, an army and a navy, and you need industry. If a part of your plane flies off, you've got to replace it. You can't replace it if you don't have industry, because you have to rely on imported parts. We have to rely on imported everything because we don't make anything here anymore. Because we don't make anything here anymore, we're very vulnerable.

As people might have noticed recently, in the last couple of decades, we have a totalitarian superpower called communist China, which is becoming more and more powerful, exerting its influence and projecting power. These are the circumstances we now find ourselves in. Communist China's People's Liberation Army is vastly more powerful than Germany was in 1939, and our military is vastly less powerful than it was in 1939, yet we sit back and our No. 1 priority is coming up with a climate policy. We're going to show President Xi. You watch us, President Xi: we're changing the weather; you just watch us. You watch us, President Trump: we're going to change the weather. You watch us down here in Australia. We've got this under control. It's lunacy.

In the end what we'll have, because of these swindles, with money going into capacity investment schemes and secret agreements—they don't tell you what's in the Capacity Investment Scheme, even in the budget papers. It's commercial-in-confidence. They're not for publication; you can't see them. In the end, billionaires are collecting the dough, and you can't tell where your money is being spent. Isn't there something wrong with that? Are there other things you want to keep secret? You don't want to know who's getting how much money and how it was negotiated? Please, there wasn't a mate who might have said, 'I know the fellow'? They're not standard agreements; they all get varying amounts. Some people get a big kicker; some people get a little one.

In the end there's going to be a royal commission into this—absolutely, 100 per cent. If we've had royal commissions into ceiling insulation, spit hoods and robodebt, by gosh, we're going to have a royal commission into this one. And then people will go running left, right and centre, because they'll be asking: 'Who knew what, when? What was your relationship? How did that come about?' Then the energy regulator will be the least of your worries. That time is going to come because there is no way a future parliament is going to tolerate what inevitably leaks out and becomes apparent.

The problem we've also got is, of course, we're still complying with the Paris Agreement. The Paris Agreement, obviously, believes that you have to have net zero in the second half of the century. That's a bit of a problem because, first of all, it's impossible. That's a small part of it: it is not possible. The only reason we're getting to where we need to be is that, basically, we're locking up farmland. Even in my area, properties are being bought, the cattle come off and the trees go on, and that's it. We've created a problem with our power because we kept on shutting down our coal-fired power stations to replace them with intermittents, and the power price went up. That’s economics 101: if you reduce supply and the demand stays the same or increases, the price goes up.

Now, with our genius, we're doing it to farmland. And do you know what's going to happen to food prices? They're going to go up because you're reducing the capacity for us to produce food. I'm a farmer. Do you know where the premium market is for our food? It's overseas. Australia comes second. Our big market is overseas. You want us to produce less? Sure, we'll just make more money. But you'll pay more. That's where we'll make it up—you'll pay more. This is what we're doing to ourselves. There has to be an epiphany for what we're doing. You're getting swindled, you're getting ripped off and you've got secret agreements—the whole deal is dodgy.

I'll close on this. This is all about the environment; we're looking after the environment. Thirty-one per cent of New England and the Upper Hunter is going to be covered in intermittent power precincts—31 per cent. That's 400 square kilometres of solar panels. What that looks like, if you're driving from Newcastle to Tamworth, is 500 metres of solar panels on either side of the road all the way along. It's the equivalent of that. Don't you think there's something slightly odd about that? Isn't there something wrong? We will have 4,000 square kilometres of wind towers with transmission lines. In other areas, we're locking areas up, kicking off the cattle, planting trees and hoping that we evolve into a higher form of termite so we can feed ourselves in the future. This is insane. It's a cult. It's crazy. It's not premised on facts; it's premised on desires and on a faux virtue. It's protected by this belief that, if you get into a corner with an argument, just say the words 'climate change' and you're out—that is the get-home-free card.

It's got to be turned around. My part, for my nation, is to make sure that I annoy people as much as possible. It's to try and make sure that we look after this. If we're going to continue down this path, then, you see, that's exactly it—you're against a religion, and out the door they go, because they're believers. But I'm not.

Julie-Ann Campbell (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

I did have a speech written, but I believe that the member for New England's speech deserves a bit of a change of plan from me. The member for New England said the idea that we can change the climate—the idea that we can do anything or that Australia should stand up and do something when it comes to climate change—is a 'swindle'. He said it was a 'swindle' and he said it was 'insane'. The member for New England is the real swindler when it comes to climate change. He's trying to swindle people into believing that batteries and storing energy won't make energy cheaper, but what we know is that it will. He's trying to swindle Australians into believing that nuclear energy is the great panacea, the thing that can get them there when it comes to climate change and saving money and energy, but we know that it won't. The member for New England is trying to swindle us with the idea that he put forward—that you have to be a believer for the climate to affect you. I can assure you that, whether you believe in climate change or whether, like the member for New England, you don't believe in climate change, it is coming and we must do something about it.

The member for New England said that we are alone. He said that Australians should sit on their hands when it comes to this because we can't do anything about it. Well, I disagree. When it comes to climate change, we don't get to put our heads in the sand—or, should I say, we don't get to lie on the concrete. We don't get to lie on the concrete when it comes to climate change. We don't get to lie on the concrete when it comes to the economic opportunities in renewables and batteries, or to paving a way forward for the future. We don't get to lie on the concrete when it comes to the future of our young people. We don't get to lie on the concrete when it comes to making sure that we leave behind a world that is better than how we found it.

When it comes to energy and climate change, we cannot ignore the economic impacts. We cannot ignore the fact that climate change not only poses a very real threat to our environment and to our way of life but also poses a real threat to our economy. And not only that: my local electorate of Moreton, on Brisbane's south side, has faced some significant natural disasters this year. We've seen a flood, we've seen an earthquake and we've seen a cyclone. My community can't afford those things. My community is incredibly resilient and incredibly helpful to each and every person who needs it when they need it. But my community deserves better; we deserve resilience, and the bedrock of that resilience is always making sure that we are taking action when it comes to climate change.

That doesn't mean that we don't have to invest in community outreach and in ensuring that, on the ground, we help people with preparedness and resilience for their homes, their local sporting groups and our local community organisations. But it does mean that, as a government, we also need to pull the levers that we have, to ensure that we are tackling climate change and addressing the energy challenges that we have. That's why we have set that ambitious target of 62 to 70 per cent when it comes to our path to net zero.

There has been a lot of discussion—a lot of words, and a lot of talk—about energy and energy policy. What those opposite seem to have forgotten is where they stand on this. Those opposite had collective memory loss when it comes to energy policy, because they, the coalition, are the villains of the energy story of this country. It's worth reminding them what they have done when it comes to energy policy. What have we seen? We have seen a decade of energy policy uncertainty, a costly and fanciful nuclear plan that wouldn't happen for another 20 years and would cost billions and billions of dollars, and an internal crisis of faith in net zero unfolding before our eyes.

It's also important to remind people what the opposition has been doing for these last six months while we've been in government. The Nationals and the Liberals had a bit of a beef at the beginning, and the Nationals took a break from that coalition relationship. After that, we saw the member for New England recently say: 'You know what? This is too chaotic for even me, and I'm out.' We have seen, over the last couple of days, the Nationals say, 'No, we are not up for net zero'—and, so far, silence from the Leader of the Opposition on this incredibly critical issue that will impact industry, homes, community groups and the future of our young Australians.

While the coalition has been in complete chaos, in complete disunity and a complete shambles, the Albanese Labor government has been investing. We know that, when it comes to energy, what we need, what people need and what business needs is reliable, sustainable and affordable energy. The reform of the energy market is what this is all about.

Australia's energy market is rapidly changing. The Australian Energy Regulator, in its State of the energy market 2024 report, surmised a wide range of factors which illustrate this. This includes the drive towards renewable energy. Rooftop solar is now the fuel source with the highest registered capacity across the national electricity market. Consumers are enthusiastically adopting rooftop solar, batteries and electric vehicles, becoming an integral part of Australia's transition to net zero. People in my local community are taking up batteries, and we know that people from across the country are taking up batteries because they know batteries are an important way to drive a sustainable energy outcome as well as affordable electricity. We know that because we've seen over 100,000 people take up batteries. Other factors include volatile wholesale prices and changing demand, with record low minimum demand in New South Wales, Victoria, South Australia and Tasmania but record high maximum demand in Queensland.

The energy market can be affected by weather and outages at both generator and network levels, and there has been legislative reform to include emissions reduction in the national energy objectives. Energy is so important. It's important to industry, to households and to our local services. These factors indicate why the Competition and Consumer Amendment (Australian Energy Regulator Separation) Bill 2025 is absolutely necessary. It resolves some longstanding issues with the current governance arrangements for energy regulation in Australia, and, crucially, positions the sector for the future.

The AER has been operational for 20 years. It is one of three major market bodies that oversee the national electricity and gas markets in Australia. The Australian Energy Market Commission develops the rules for market operations, the Australian Energy Market Operator controls the day-to-day operation of the markets and the AER has the role of monitoring compliance with regulations and performance. Each agency supports the Energy and Climate Change Ministerial Council to develop and support Australian energy policy.

The AER regulates electricity networks and gas pipelines in all states and territories, including Western Australia. This translates to about 800,000 kilometres of overhead electricity, lines and underground cables, servicing about 11 million customers. The gas pipelines are over 73,000 kilometres long and provide gas for more than 4.3 million customers. The key role of the AER is setting the maximum amount of revenue that electricity and gas providers can earn.

The other important role the AER has is to help consumers make informed choices about which provider supplies their energy. Fundamentally, it protects consumers from prices that are too high and approves customer hardship policies, amongst other safeguards. At a time when the cost of living is impacting so many, Australians deserve protection from prices that are too high. At a time when the cost of living is affecting so many, Australians deserve to have a safeguard in place from government. As the AER states:

Consumers are at the heart of everything we do.

The AER works to ensure energy consumers have access to a reliable and secure market and that they pay no more than necessary for energy to their homes and businesses.

You can see that the AER has a comprehensive and wide-ranging mandate. It was established in 2005 under the umbrella of the Australian Competition and Consumer Commission. Its initial budget, in 2004-05, was $6.5 million. In 2023-24 the budget had grown to more than $95.6 million. The organisation has seen rapid growth in the number of employees as well. When it began, there were 15 staff. It now has a staff of approximately 400.

It has been acknowledged for some time that, due to both the wide-ranging remit of the AER and its growth, the current governance structure is not fit for purpose, and we need to fix that. This bill therefore establishes the AER as a standalone Commonwealth entity separate from the ACCC. The reforms will give the AER authoritative control over both its funding and its employees. While the chair of the ACCC is formally tasked with leading, governing and setting the strategic direction of the broader entity that includes the AER, it is the AER's independent board that ultimately holds responsibility for these functions. This is an obvious disconnect between authority and accountability.

The bill amends the Competition and Consumer Act 2010. It establishes the AER as a non-corporate Commonwealth entity for the purposes of the Public Governance, Performance and Accountability Act 2013, and the AER board will become the accountable authority of the body. The necessary approval to amend the Competition and Consumer Act was granted by state and territory energy ministers in May 2023. The implementation of the bill recognises the need to maintain the independence of the AER. Consequently, the Minister for Climate Change and Energy will not have ministerial powers over the AER. The minimalistic approach to this separation guarantees that the ACCC and its constitution are not affected. Both entities will continue to benefit from the information-sharing arrangement currently in place. Importantly, staff will not be disadvantaged in any way by the reforms. The AER will transfer all existing staff and be able to employ its own staff moving forward.

There are numerous benefits to these reforms. Primarily, they set the AER up to be more agile in the face of changing energy landscapes. They make decision-making and governance more streamlined, eliminating duplicate decision-making. And they remove the dual ministerial responsibility for the AER's activities. Currently the Minister for Climate Change and Energy has portfolio responsibility for the AER, and the Treasurer has responsibility under finance law that pertains to the ACCC. Finally, these reforms remove the government risks that currently exist. They will end the governance of AER employees by the ACCC so the AER becomes independently responsible for both its strategic direction and its employees.

The reforms in this bill have been backed by stakeholders and experts for some time. There have been a number of public reviews recommending an autonomous AER. In 2015 the review of governance arrangements for Australian energy markets recommended establishing the AER as a standalone body. This was reinforced in 2017 in the Independent Review into the Future Security of the National Electricity Market. This review also noted that information sharing, liaison and cooperation should be preserved after structural separation.

This bill is focused primarily on making sure we reform the energy market. But what sits behind it is our values as a Labor government. What sits behind it is the idea that when it comes to climate we cannot sit on our hands and do nothing. We must take action. Not only that: we need to make sure that, when it comes to energy policy, energy is affordable and reliable for every Australian, for every business and for every household, and that is what this bill is all about.

David Moncrieff (Hughes, Australian Labor Party) Share this | Link to this | Hansard source

Our energy market is a cornerstone of Australia's economic infrastructure and a critical service for Australian consumers. It enables the transmission and distribution of electricity across vast distances, supporting industries, businesses and households with reliable power.

Australians expect to be able to have access to cheap, reliable power. They expect to be able to turn on the lights at night. They expect to be able to throw their leftovers in the fridge and have them still be cold the next day. They expect to be able to run their fans and air conditioners in the summertime. And they expect that their energy will power their healthcare devices. Reliability and stability are absolutely essential to our energy markets, and those are what this bill is aiming to achieve.

Stability in energy policy is not something that was achieved under the previous government. Was stability something that we expected from the Abbott-Truss-Turnbull-Truss-Turnbull-Joyce-Turnbull-Joyce—again—Turnbull-McCormack-Morrison-McCormack-Morrison-Joyce—yet again—government? No. But it was something that Australians desperately sought.

Those opposite do believe in climate change one minute; the next, they don't. They believe in reducing emissions one minute; the next, it's all too hard. They support a national energy guarantee one minute; they shelve it the next. One minute, Scott Morrison is talking about his plan to achieve net zero at the COP in Glasgow; the next, the Nationals are showing net zero support for the Liberal leadership. Just now, we have heard some appalling, unscientific scaremongering from the member for New England on this bill. Those opposite spent nine years in government, during which they could have formulated a plan to replace our ageing coal-fired power stations. They didn't come up with one. So, on this side of the chamber, the Albanese Labor government has had to spend the last 3½ years playing catch-up on energy policy to modernise our ageing system.

As I've said, Australians expect reliability in their power. That's why the work of the Australian Energy Regulator matters—not just to policymakers or economists, but to every Australian household, every small business and every community trying to keep the lights on and bills under control.

A key part of the stability and reliability of our network comes from the work of the Australian Energy Regulator, the AER. Now, the AER isn't one of the most high-profile parts of the federal government. You won't find many dinner party conversations that start with, 'So what do you think about the governance structure of the Australian Energy Regulator?' But its work in ensuring that Australian energy consumers are better off now, and will be into the future, is work in which Australians, including those in my electorate of Hughes, take significant interest.

In my electorate of Hughes, it's not an abstract idea. In 2023-24, Ausgrid customers in Bangor used 15,535 megawatt-hours of electricity. In Ingleburn, our industrial sites needs significant energy supply to keep our economy moving. Family-run local businesses, like Valley Kebab in Ingleburn Town Centre, just want predictable power bills. To the electricians on the job in Barden Ridge and Wattle Grove, and tradies trying to finish work before dark, these decisions about our energy-system regulation have very real impact.

This legislation is a critical reform to ensure our national energy regulation framework retains its effective governance. It holds real benefits for the people of Hughes, our small businesses, our environment and our local communities.

When the AER was established in 2005, it was a small team of 15 people, working with a budget of just over $6.5 million. Today, it's a national regulator of nearly 400 people, managing a budget approaching $100 million. That's a transformation by any measure, and this government needs to respond to it. Over those two decades, Australia's energy sector has changed beyond recognition. We've seen the rise of renewables, new technologies like household batteries and community solar, and a grid under more pressure and with more complexity than ever before. Yet, despite that change, the governance structure for the AER hasn't caught up. The AER remains administratively tethered to the ACCC, even though its remit, its expertise and its accountability are entirely different. The current set-up is a bit like having your dentist working at an accounting firm: 'I'm sure he's well qualified to do the work, but why am I coming to the tax return place to get my teeth fixed?' This bill modernises the arrangements. It ensures the AER is equipped to handle the challenges ahead, because those challenges are significant.

Across my community, people are making decisions about rooftop solar, about household batteries and about how to use power, and they are relying on fair, consistent and transparent regulation. The AER plays a critical role in ensuring the electricity networks that serve our community, from substations in Engadine and Lucas Heights to the distribution lines that keep Sutherland businesses humming, are operating efficiently and charging consumers fairly. Every time an energy retailer wants to change its default market offer or a network seeks to adjust its prices, it's the AER that steps in to check those proposals against what's fair and reasonable. For households in suburbs like Engadine and Moorebank, where people are watching every dollar, those decisions matter. So, when we talk about giving the AER greater independence, we're really talking about strengthening the referee in the system. We are making sure the organisation that protects consumers can act quickly, decisively and without interference.

At present, there's a mismatch between responsibility and accountability. The AER Board is responsible for the regulatory decisions, yet the ACCC chair is legally accountable for the AER's finances and staffing. That's not just clunky; it's inefficient governance. It impairs its ability to hold others fully accountable if it doesn't control its own people and budget. The Vertigan review in 2015 said it clearly: the AER needs full management and financial autonomy to be effective. The Finkel review in 2017 agreed, and the Energy Security Board review in 2020 heard the same message from stakeholders across the energy market: independence matters. This bill finally delivers on that independence. This bill takes a measured and minimalist approach. We're not reinventing the wheel or setting up an entirely new agency with layers of bureaucracy; we're simply giving the AER its own legal footing as a non-corporate Commonwealth entity, separate from the ACCC under the Public Governance, Performance and Accountability Act 2013. It means the AER Board will now be the accountable authority and the AER chair will serve as the head of the agency under the Public Service Act 1999. Existing staff will transition smoothly with their conditions preserved under the ACCC enterprise agreement. Shared services, like human resources or information technology, can be purchased from the ACCC or third parties where that makes sense. It's practical, it's efficient, and it doesn't burden taxpayers with unnecessary duplication.

Independence is essential for the public to have full confidence in our regulators. I used to work for a regulator, and we really valued our independence in terms of making decisions that were going to affect our economy and entities. The AER makes tough calls every single day, regulating billion-dollar networks and deciding on price determinations that affect millions of Australians. If the public believe that the regulator is influenced by another body, even if it isn't, then public trust erodes in our institution. This bill gives the AER the independence it needs to do the job properly and the authority to manage its own destiny.

Our energy grid is going through the most significant transition since electrification itself, with renewable generation expanding regularly. In the Sydney region, this new grid infrastructure is being planned to support the transition to clean energy. Having an effective regulator like the AER under the changes this bill brings will ensure the investment in this transition is efficient and that the benefits flow directly to consumers. In my community, that means more stable, affordable and sustainable energy for our future; more local schools being able to install solar panels; and small manufacturers being able to upgrade their systems without breaking the bank. When residents see their bills spike, they don't want excuses. They want accountability. By empowering the AER, we can ensure that it can act faster and smarter and ultimately protect consumers better. Those opposite don't want to acknowledge the transition that is occurring in our energy market, but on this side of the House we are taking action to ensure that Australia is ready for a renewable energy future as our market continues to transition.

This bill has not come to parliament in a rushed fashion. Instead, it has been shaped through extensive consultation with federal government departments, the AER, the ACCC and state and territory ministers. In May 2023, all state and territory ministers actually agreed to the separation under the Australian Energy Market Agreement. This bill is the result of years of review, discussion and careful design, and it's about time. This bill will ensure the removal of duplication, streamline governance and ensure the AER can get on with the job that Australians expect, to protect consumers and ensure the reliability and affordability of energy. An empowered AER will better monitor retailers, enforce compliance and ensure the energy markets play by the rules. Given the coming decade of energy transition, it will be more vital than ever to have a regulator that's nimble, well resourced and independent, because the energy market will not wait for the government to catch up.

It is a key strength of this bill that the separation does not disrupt information sharing between the AER and the ACCC. It still allows collaboration on investigations or enforcement. The people of Hughes expect this place to keep their bills low and their lights on, and they also expect us to ensure that regulators are working efficiently and transparently.

This reform is part of the broader work of the Albanese Labor government of modernising these bodies, from payday superannuation reforms, which ensure fairness for workers, to the National Energy Transformation Partnership initiatives, which help coordinate investments across jurisdictions. This reform is practical. It's overdue. It puts consumers and the energy sector on the forefront of policy. It's part of the Albanese Labor government's commitment to ensuring that our economy benefits from the transitions that are taking place in the energy market. I commend this bill to the House.

Steve Georganas (Adelaide, Australian Labor Party) Share this | Link to this | Hansard source

I'm pleased to be standing here to support the Competition and Consumer Amendment (Australian Energy Regulator Separation) Bill 2025, which will establish the Australian Energy Regulator, AER, as a standalone entity. It will be completely separate and fully independent from the Australian Competition and Consumer Commission, or the ACCC, and the Commonwealth. This is not the first time that this bill has been introduced. In 2024, a similar bill passed the House; however, it failed to pass the Senate before the end of the parliamentary term and is now long overdue. We must not allow a reform like this to falter again.

This bill is essential for Australia's continued growth and progress. The AER has long outgrown its parent body, the ACCC. When it was established in 2005, the AER operated with just 15 employees and a budget of $6.5 million. Today, the AER requires approximately 400 employees to meet its dramatically expanded responsibilities as Australia's energy landscape evolves with the rise of renewables and our commitment to net zero carbon emissions, expanding the AER's role significantly. The change that you see quite bluntly here is the 400 employees compared to 15 back in 2005.

The AER is the cornerstone of consumer protection and market regulation in an increasingly complex energy environment. Although the AER and ACCC currently have separate regulatory functions, the ACCC still retains authority over the AER's funding and staffing and is responsible for governing and setting the AER's strategic direction. In contrast the AER has its own independent board, which is ultimately accountable for operations. This arrangement is no longer fit for purpose. The separation of the AER and ACCC is long, long overdue, and we have recognised that the current governance structure limits the AER's potential as an independent energy regulator. The AER will be empowered to resolve longstanding governance issues, take full control of funding and personnel and strengthen its accountability.

This is not a rushed decision. As you heard earlier, it went through this House prior to the last election but didn't get through the Senate. But this bill has been recommended by a number of public reviews, such as the 2015 Review of Governance Arrangements for Australian Energy Markets, the 2017 Independent Review into the Future Security of the National Electricity Market, and the 2020 independent review of the Energy Security Board.

Australia's energy markets are undergoing rapid transformation to accommodate cheaper and renewable energy like solar and many other forms. As we move towards net zero emissions, our energy market must be agile, transparent and responsive. The AER's independence will allow it to better support integration of renewables, manage grid stability and ensure that consumers are not left behind in transition. Governance structures matter when regulatory bodies are entangled with border agencies. Accountability can be diluted. By granting the AER full independence, what we're doing is streamlining its operations and reinforcing something very important: public trust in its decisions.

This bill will benefit the Australian public by enabling the AER to focus on and respond to energy consumer needs with greater clarity on energy security, reliability and affordability. The AER plays a vital role in the Australian energy market. It monitors compliance, with market rules and performance, and it regulates the electricity and gas networks by setting the maximum amount of revenue businesses can earn from the consumer—ultimately, keeping a tab on what they can earn. The AER standardises the wholesale and retail energy markets, to protect consumers from exploitation.

The bill will amend the Competition and Consumer Act 2010 to legally separate the Australian Energy Regulator from the Australian Competition and Consumer Commission. The AER will no longer be a Commonwealth entity and will gain full operational control over its own staff, resources, governance arrangements and regulations. Importantly, the role of the AER will remain unchanged. The Australian Energy Market Agreement, the national energy laws which provide the AER with detail obligations and functions, will continue to apply.

The need for this bill reflects the energy reality in Australia. We have all faced increases in electricity bills—individuals and businesses—and this growing energy insecurity reflects upon a growing economic insecurity for all of us. This government must strengthen our electricity market and provide the AER with its independence to take the initiative to act in the public interest. The rise of electricity prices is of course a major point for all of us—businesses, families and industries. Many Australians are doing it tough with the cost of living, and it's our duty as a government to help alleviate that burden.

This bill is a small but significant step on a long journey for Australia's sustainable future. The bill is an act to make the energy market fairer and prevent retailers from overcharging customers. Recent data by the ACCC shows that 80 per cent of households could be paying less for electricity. This is a statistic that must improve. The AER, with full independence, can ensure that everyday Australians are not taken advantage of and that they can trust that their government is working for them. In these challenging times, our electricity markets must prioritise the welfare of Australian consumers. Times are tough, as I said earlier. The only way to get out of this cost-of-living spike is to band together—industries, businesses and families alike. We need to support each other rather than focus on maximising profit at the expense of ethics and fairness. The AER separated from the ACCC is the superhero we need. The AER can finally manage its growing regulatory responsibilities effectively and efficiently, free from government constraints. It is a start. It's the beginning of reducing electricity prices and supporting households.

The AER's purpose is to ensure energy consumers are better off now and in the future. Affordable and reliable energy is vital to our national economy. It supports productivity in industry, agriculture, manufacturing and the backbone of this nation, small businesses. These sectors depend on the accessibility of a stable national electricity grid. All of us will be able to witness the benefit of this bill that separates the AER. In my own electorate of Adelaide, many constituents have come to me to raise issues and to ask me for assistance in combating their rising electricity bills. Correspondence I received recently from an elderly couple in my electorate comes to mind. They had received a 4.7 per cent increase in their electricity bill. It has impacted them so much that they, like so many others, have recognised that electricity is becoming a luxury item. The air conditioners and heaters that help households combat the wild temperatures that we face here in Australia are becoming very expensive to operate, and families are left to face the rising costs. An elderly female constituent in my electorate wrote to me to say that the government needs to do something to help the increasing number of people in her community struggling to pay their energy bills. Australians who are renting, who already face the reality of their rent rising, do not need to worry about their energy prices increasing as well.

We, as the Australian government and as representatives of our constituents, must speak openly about these realities and ensure that we're doing something about them. This bill is more than just the separation of an electricity regulator. It's about protecting Australian households and ensuring that they are safe. It's about preserving the Australian dream of living a life of fairness and comfort. No Australian should fear that their quarterly electricity bills will be unaffordable.

Let us also remember that this reform is not happening in isolation. It's part of a broader national strategy to modernise our energy systems, support the transition to renewables and ensure that no Australian is left behind. The AER's independence will allow it to better support innovation in energy markets, including battery storage, demand response and community energy projects. It will also enable more agile responses to emerging technologies and consumer trends, ensuring our regulatory framework keeps pace with the future.

Energy insecurity is not just a household issue; it's a national economic concern. Small businesses, hospitals, manufacturing, aged-care facilities and schools are all affected by rising energy costs. A stronger AER means better oversight, fairer pricing and, ultimately, a more resilient economy. It means fewer disruptions, more reliable service and greater confidence in our energy infrastructure. We must also consider the long-term economic benefits. A well-regulated energy market fosters investor confidence, encourages competition and drives down prices. It ensures that infrastructure investments are made wisely and that consumers reap the benefit of technological advancements. It also helps Australia remain competitive globally, as energy affordability is a key factor in attracting and retaining industry.

This bill lays the foundation for a future where energy regulation is proactive, not reactive; where consumers are empowered, not exploited; and where Australia leads the way in building a fair, affordable and sustainable energy system. In five or 10 years, I hope we can look back on the moment of this bill as the turning point where we empowered the AER to lead with clarity, independence and purpose—when we chose to put consumers first and build a more resilient energy future.

If we don't do this, if this bill is not passed, there'll be negative impacts. If the bill's not passed, the AER and the ACCC will remain a single Commonwealth entity under the finance law. The AER Board would continue to have the powers required to fulfil its regulatory role; however, it would not give those with the regulatory responsibilities authoritative control over the resources and people needed to undertake that work. There would continue to be dual ministerial responsibilities for the AER's activities, and, in accordance with the Administrative Arrangements Order, the Minister for Climate Change and Energy would continue to have portfolio responsibilities for the AER while the Treasurer would be responsible under finance law because the AER would remain a constituent part of the ACCC, a non-corporate Commonwealth entity within the Treasury portfolio.

It's important that this bill is passed; it's important that we support it. As I said, we are empowering the AER to lead with clarity, independence and purpose and to ensure that we build a fairer and more resilient energy future, ensuring that consumers are protected—not just household consumers but small businesses and industry—which then supports our economy. I commend this bill to the House.

Ed Husic (Chifley, Australian Labor Party) Share this | Link to this | Hansard source

Thanks, Deputy Speaker Young. It's great to see you again. You're working very hard for that role today, I might add, sir. I also want to commend my friend the member for Adelaide, who referred to a regulator as a superhero. I think you referred to the AER as superheros—that's maybe the first time in the parliament that regulators have been spoken about so effusively, so well done, Mr Georganas.

I welcome the opportunity to speak on the Competition and Consumer Amendment (Australian Energy Regulator Separation) Bill 2025, because I think it is important for the Australian Energy Regulator, particularly at this point in time, that we give them the independence, the efficiency and the resources that they need. As to independence, while the AER have been under the umbrella of the ACCC, it does not suggest for one moment that the ACCC has impeded their ability to do their job. But this will give the AER the ability to progress the work that it is doing in a very important space and allow it to act decisively and transparently in the interests of households and businesses, who depend on affordable energy. When it comes to our gas and electricity, Australians deserve a fair deal, and it is important that we have a regulator that's oversighting that.

The AER, as I indicated, long operated as a part of the ACCC, a structure that made sense 20 years ago. But, really, times have changed, and it doesn't remain the case that it makes sense today. The AER regulates billions of dollars in network revenue and oversees hundreds of energy market participants yet still relies on the ACCC for staff and resourcing. We want the bill to address this, and that's what it does. It separates the regulators; it makes the AER a fully independent Commonwealth entity with its own staff, its own budget and its own governance. It will be able to make decisions faster, cleaner and more efficiently, respond to market circumstances and enforce rules in real time. It's one of the three bodies overseeing an area of particular interest of mine—the national gas market. It's notionally referred to as a 'gas market', and I want to come to whether or not that term is a sustainable one in this day and age.

The three bodies—AER, AEMC and AEMO—have operated for 20 years without full financial or operational control. The separation empowers the AER to strengthen its independent oversight of energy markets, in particular gas infrastructure, pricing transparency and competition conditions. It does a lot of work in the gas space, which I want to reflect on, and I hope that it does more work in it.

The ACCC does quite a lot of work. I commend the ACCC. Twice a year it does a very important overviews of the performance of the so-called gas market in this country. If I had one suggestion, one area of reform is a much more dynamic approach to assessing the state of the gas market. The way it operates at the moment is that the ACCC releases a report every six months but that report reflects on data captured six months earlier—so it releases a report in the middle of the year talking about summer prices and a report at the end of the year talking about winter prices. There's got to be a much more dynamic way to measure the behaviour of the so-called market, the prices that have been achieved in that market and the contracts that have been offered. If there is reform to be done, it is that this work needs to happen on a much more frequent basis. We're on the cusp of, for the first time, seeing inflation data being reported not on a quarterly basis but on a monthly basis. If we can do that on something as big as that in the economy, we can definitely move quicker on reporting on gas pricing.

I've intimated a few times that there is a label applied here—'the gas market'. It's very important to emphasise that this is not a gas market. This is not a situation where there is equal power between the supplier and the buyer. This is a market where there is extraordinary market power held by the gas companies themselves, who set price and contract terms in ways that, frankly, operate against the national interest. Their pricing is way out of line with international pricing, despite, I'd say, misleading suggestions to the contrary. They provide contract terms particularly to Australian manufacturers that are, frankly, unacceptable for manufacturers who rely on gas for feedstock. These are unacceptable terms.

The sad reality is—and it's been reflected upon by the ACCC in its twice-yearly reports—that, with the measures that have been put in place like the heads of agreements, the gas trigger and the code of conduct, it is hard to see that there is a demonstrable effect or a significant downward pressure on prices as a result of these interventions. They've been treated as a joke by the gas companies themselves, who make out that they have compromised and been able to do a better deal for consumers—but quite the contrary exists.

Some of the behaviour of the gas companies and their executives is extraordinary and portrays completely tone-deaf behaviour by them. Exhibit A is a Santos executive—I don't think it is extraordinary that we have Santos being tone-deaf; they've demonstrated their capability to do this time and again. Mark Vassella, the CEO of one of the biggest steel manufacturers in this country, BlueScope, spoke to the National Press Club and talked about how their overseas competitors could get gas in the US at $3. Santos executive Stephen Harty disputed that, saying that there was no such thing as $3 gas in the US, and then went on to quote Henry Hub gas prices at $4.90 a gigajoule in Ohio—this is in an op-ed that Mr Harty submitted to the Australian Financial Review on 21 October—and then said that the average industrial gas price in Ohio, where BlueScope's North Star plant is located, 'was more than $17 a gigajoule, higher than Australia's gas price cap of $12 a gigajoule'. Mr Vassella may want to investigate and respond to those claims. Santos, by the way, buys up a lot of domestic gas supply so it can top up its export loads and flog those off at much higher prices, which puts pressure on the local gas market. Be that as it may, we can come back to that at another time.

Let me give you an example. I said that was exhibit A of the tone-deaf nature of gas executives. The gas executive said:

If manufacturers are concerned about gas prices, why are they not investing in new gas supply sources?

That is like asking a buyer in a market to invest in supply. You turn up to the market to obtain supply. When the customer objects to the price of supply, the supplier says, 'If you think you could do better, go do it,' which is just bizarre logic.

On top of that, the Santos executive said:

The truth is manufacturers do not have the appetite for the large amounts of capital—

No wonder—or, as the kids say, 'No duh'—

They want risk-free, long-term contracts on a cost-plus-margin basis.

Oh, the horror! The horror that manufacturers would want a better price for their energy!

I come back to the point that this is not a market; this is dictated to by companies with great market power. When manufacturers go and seek a contract length of greater than 12 months—this parliament needs to know that that rarely happens. Manufacturers that need gas as feedstock cannot get a contract longer than 12 months. Why? It's because of the profiteering of these gas companies that want to maximise profit and refuse to do a longer contract, because they hope that, at the end of the 12 months, they can get a better price. This is what we're dealing with.

Those opposite will go on about why gas prices are so high, but they'll do nothing about it. When we tried to cap gas prices, they voted against it. Their answer, taking the cue from the very gas companies that thug our manufacturers, is, 'We'll just get more supply.' Yes, we can get more supply, but we need to disabuse ourselves of the notion that more supply alone will result in a better price. It can put, to some extent, downward pressure on price, but it's not the answer alone.

We need to get more supply at better prices of an Australian resource—our gas, our prices. We should not be dictated to by export prices. The cost of doing business in this country for these gas companies who say, 'If you do anything against us you, we'll take our capital away'—as if, when they are fleecing the export market—is to give us a much better, much more competitive gas supply arrangement, with fairer contracts at way better prices. I would argue that the $12 cap, in this day and age, is too high. It should be lower. Australia should have the courage to argue. With bountiful supply of our own resource, we should demand a better price because it confers on us great commercial and economic strength.

Most other countries get it. Most other countries are prepared to stand up for themselves, as should we. Instead of having these executives, like what we've seen out of Santos, say, 'If you don't like it, go get the supply yourself,' and, 'If we don't like it, we'll take our capital elsewhere'—this is just tantamount to trying to thug the market, but it also defies common sense. They should do a better deal. Given that 80 per cent of our gas is exported, they're doing very well. They're doing very well on a historical basis. These gas companies are doing very well relative to when they made the investment. They were charging $3 a gigajoule and they have now got $12 a gigajoule. They've made more than enough profit to be able to do a better deal for Australian consumers.

While I'm at it, if we're talking about regulatory arrangements which we are expecting the AER to benefit from, can we please stop just watching foreign buyers get our gas—demanding to have access to it and saying it's a sovereign risk if they don't get it at the right price—and then resell it? We have had countries resell Australian gas after demanding access. No-one has a problem with foreign buyers using gas for themselves, but if they tell us we can't change our gas arrangements or our gas prices and they then sell the same amount of gas as east coast households and businesses use—this is extraordinary.

We cannot sit by and watch Japan and Korea resell our gas, which Japan in particular has done it for four years in a row, when we have been crying out for uncontracted gas at a better price. This type of stuff needs to be tackled—our gas, our prices. We need it for our manufacturers. The gas companies are making 'more money than God', in the words of President Biden when he talked about some of the gas companies in the US. They are not being short-changed. This resource is in bountiful supply. It is being exported, and a lot of money is being made out of it. We should have the courage to insist on a better deal for Australian manufacturers. It's something that we should be fighting for, because it is important.

As we said coming out of the pandemic, we need to make more things here. Gas is a key input for many of the manufacturers. We need to take a strong stand on this to be able to provide it. We can't just listen to the claims of the gas companies that say, 'If we just get more supply, you'll be right.' No. We need more supply directed here at a much more competitive price and on contract terms that are longer than 12 months. Those three areas are what we need to focus on, and I urge the House to do so.

Josh Wilson (Fremantle, Australian Labor Party, Assistant Minister for Climate Change and Energy) Share this | Link to this | Hansard source

I thank honourable members for their contributions to the debate on the Competition and Consumer Amendment (Australian Energy Regulator Separation) Bill 2025. The bill seeks to establish a legally separate Australian Energy Regulator—the AER, as distinct from the ACCC—to provide greater management and financial autonomy for our energy regulator, enhancing its ability to manage resources and set its strategic direction. This will allow the AER to respond with agility to changing energy needs and focus with greater clarity on energy security, reliability and affordability for energy consumers. This reform will enhance Australia's energy market governance arrangements, contributing to a strong and independent energy regulator that will ensure energy consumers across Australia are better off for many years to come, and I commend this bill to the House.

Question agreed to.

Bill read a second time.