Nick Xenophon (SA, Independent) Share this | Hansard source

I am afraid I will not add to the theatre of this morning, but I do have some questions that I want to raise that I think are serious issues with respect to the pricing of electricity in this country and the price pressures of electricity as a result of this scheme and whether we can improve it. The chamber knows what my views are—that we should not be proceeding with this matter—and there is an amendment that I have introduced, and I think the opposition has one as well that is on the table, to defer this whole scheme until after the next election. I think there are some important principles there. The issues I genuinely want to ask the minister about relate to the concerns expressed by the Energy Supply Association of Australia. Those concerns are quite significant in terms of whether the design of the scheme in its current form could lead to unnecessary increases in electricity prices. I refer to the front-page story in the Sydney Morning Herald by Lenore Taylor, Peter Martin and David Wroe headed 'Tax flaw: power bills may rise 20%' The Energy Supply Association has written to me and has written to my colleagues saying that the plans under this scheme to force immediate payment for forward dated emissions permits rather than the deferred payment allowed under the Rudd government's emissions trading scheme, the CPRS, could lead to the consequence, perhaps unintended, of unnecessary increases in electricity prices. That is an area of significant concern.

I should indicate that Steven Munchenberg from the Australian Bankers Association has a different view. I respect that there are different views out there that you can have a derivatives market. I do not want to misquote Mr Munchenberg, because he contacted me in good faith to express the views of the banks in relation to this and to reject the Energy Supply Association of Australia's arguments. But I think there are some valid concerns there about whether the design of the scheme in its current form not allowing for deferred payments is going to cause unnecessary increases in supply costs. If you do have a derivatives market or a secondary market in terms of these matters—as the Australian Bankers Association has indicated, and I think it does have a valid point of view on this—will that market in itself be unnecessarily inflationary and lead to price increases?

I think these are legitimate concerns. I would like to hear from both the government and the opposition on what their views are in relation to this. It is all well and good to oppose a piece of legislation, but if there is an opportunity to try and improve a piece of legislation then I think that is what we are meant to do here in the Senate. The key role of the Senate is not only to play that scrutiny role but to improve legislation even if we disagree with it. If the numbers make it inevitable that it will get through but there is an opportunity to improve it, we should explore that opportunity. If it is a matter of improving the legislation then I think it is incumbent on us to try to do that.

I would like the minister to respond to this. Minister, you understand the spirit in which I am asking these questions. This is not a polemical debate; it is a practical debate. Will the design of this scheme in its current form, unlike the CPRS, lead to unnecessary increases in electricity prices? I reserve the right to move amendments in relation to this in the next couple of hours, but I really want to genuinely engage with the government in relation to what I think are important issues that have been raised by the Energy Supply Association.