David Van (Victoria, Liberal Party) Share this | Hansard source

I rise tonight to join my colleagues in supporting the Treasury Laws Amendment (Prohibiting Energy Market Misconduct) Bill 2019, which is currently before the Senate. As some in here would know, I've spent much of my career in and around the energy market. It's clear that we need to bring some sense and some knowledge to this debate, and I hope to do that now.

This bill defines what is considered misconduct in the energy market and gives the Australian Competition and Consumer Commission a raft of powers to monitor, act and apply large monetary penalties to energy suppliers breaching the laws of fair competition towards consumers. The bill also increases the authority of the Treasurer to act against gross market misconduct in the energy market. This means that the Treasurer will have the direct authority to pursue a divestment order in the courts over a particular energy supplier. This is a bill that fulfils the coalition government's pre-election commitment to take on market operators that behave in an unethical manner towards energy consumers and to ensure strict accountability of these businesses. It is a strong but necessary bill to provide much-needed safeguards to Australian energy consumers, both households and businesses, who all were losing out due to the unfair pricing and uncompetitive behaviours in the retail and wholesale sectors.

The coalition government's energy policy is based on two fundamental principles: firstly, security of supply, and, secondly, lower electricity bills. This bill is one aspect of that commitment, as it injects much-needed fairer competition into a complex but essential utility for Australian households and businesses.

Other measures undertaken by the federal government to enhance electricity supply and lower prices have followed the recommendations of the 2018 ACCC retail electricity pricing inquiry. As a result, the government introduced a default market offer, which acts as a price safety net for households and businesses. In essence, this policy is a ceiling on highest prices set by the Australian Energy Regulator. However, it is important to note that it is a reference price, not a legislated price cap. It is estimated that, since 1 July 2019, some 800,000 households and businesses have benefited by having their power contracts reduced to the default price. This is yet another tangible example of how this coalition government is working to bring down electricity prices. To give another practical example, in the retail market, as supply chain costs fall in a sustained manner, the retailer is compelled to adjust and lower its prices accordingly for the consumer. In essence, this bill is an antigouging law.

Another aspect of the government's policy is to bring more secure supply and therefore lower electricity prices. This is under the Retailer Reliability Obligation. It is an enforced obligation. It is incumbent upon suppliers of electricity to meet demand with supply. The Australian Energy Market Operator will monitor the obligation placed upon the suppliers to have sufficient generation of electricity to meet the demand. It is a long-term policy that attempts to stop future blackouts or brownouts—a serious problem that continues to affect my home state of Victoria, particularly during peak usage periods in summer.

However, even with all of our ongoing successes to date in our attempts to further reform this essential but complex area of the market, this government has been hindered by those opposite, by the Greens and, more importantly, by obstructionist state Labor governments throughout Australia. Remarkable as it may be, the federal Labor Party are not the worst offenders in forcing up power prices and creating insecurity in the energy market. The Andrews Labor government of Victoria takes that cake. Its careless policies, based on extreme and unrealistic ideology, have driven up electricity prices in Victoria to be the highest in Australia. AEMO found that, due to the 'continued deterioration' of the reliability of ageing brown-coal units, energy reliability in Victoria would get worse. It is clear that Premier Andrews has learnt nothing from the 200,000-odd households and businesses that suffered severe blackouts last summer. It is beyond comprehension that the once economically thriving state of Victoria could be, and has been, reduced to such a crippled state of affairs. It is based on foolish ideology and incompetent management, shrouded in their hatred for base-load energy. I remind those senators here that Victoria used to be a net exporter of energy and is now an importer of energy.

On Premier Andrews' watch, and in fact with his encouragement, Victoria has seen the closure of one of the state's major electricity suppliers, the Hazelwood Power Station, with no base load replacement. Its closure means a straight-out reduction of power generation in the state. This equals loss of reserves in high-demand usage periods. Also through mismanagement, the Victorian state Labor government was blindsided by AGL's Loy Yang power station going into shutdown mode for maintenance at the start of the summer season. Frankly, this is a gross failure by the Andrews' Labor government in assuring energy security. Victorians have their fingers crossed that AGL's guidance to the market—that the unit will reopen mid next month—is accurate as any major slip will almost guarantee blackouts and will certainly lead to higher prices.

To compound Victoria's power crisis, the Andrews' government has upped the stakes and introduced compulsory use by suppliers of the 50 per cent Renewable Energy Target by 2030—a law with the Orwellian title of the Renewable Energy (Jobs and Investment) Act 2019, Victoria, as their instrument. It is a target that will likely foretell the closure of the Yallourn Power Station. It will not only be due to costs imposed by the Andrews' government but will be primarily due to the unrealistic mandatory renewables target. As a result, it will not be financially viable to operate or update the ageing power station, so we can only guess that it will be a matter of time before Yallourn goes the way of Hazelwood.

Victoria's unrealistic and damaging renewables target is at the fundamental core of Victoria's high energy prices and unreliable energy supply. It is a situation that is severely damaging our economy and future investment opportunities. 'Blackout Dan', as the Premier has become known, has now made high prices and blackouts the new normal in Victoria. Once upon a time, this was never the case, nor could it have even been fathomed. The investment attraction for the great state of Victoria was its cheap and reliable power prices. We forged our strong reputation and economy upon this. That reputation has since gone by the wayside. In contrast, this government, the Morrison government, has a realistic and balanced policy in place requiring a 23 per cent renewables target. It supports investment in baseload energy without ruling out coal merely for rigid adherence to ideology alone.

A vote against this bill is a vote for big power to further dominate and manipulate the market economy, contrary to fair practice and at the expense of Australian households and small business. To vote against it is to have pensioners, retirees and low-income families facing higher power prices. For those Australians, it will be a case of having to make the grave decision to either flick the power switch on or not—something that was once rare but is now an ever-increasing occurrence in Australia.

As a senator for Victoria, the state whose energy security is in disarray because of a lack of long-term vision from the Andrews' state Labor government, I urge senators in this place to support this bill in order to bring greater security and accountability to the energy market. It will place downward pressure on prices Australia wide. I again restate: the legislation will also be good for the market economy. It procures more market competition, thus creating a more efficient, competitive and fair market. These reforms will actively reach all the way to personally supporting Australian households and businesses by lowering the cost of living and business expenses. It is yet another example of how the coalition is restoring common sense back into the practice of good government.