Gerard Rennick (Queensland, Liberal Party) Share this | Hansard source

No, it's not, Murray. It costs a lot of money to build solar panels. I'll take that interjection. It's free, is it? So how many synchronous condensers are you going to need in your renewable paradise? Do you even know what a synchronous condenser is, Senator Watt? No, I bet you don't. Never heard of it! You wouldn't have a clue, would you? This bill will help the federal Liberal-National government honour its commitment to a 25 per cent reduction in wholesale electricity prices by the end of 2021, which is a great start in helping Australian families, pensioners and small business. Electricity assets tend to become natural monopolies, and this is particularly true in regional Queensland, where consumer choice is virtually non-existent. It is up to responsible governments to provide oversight and to step in when monopoly power is abused. Generating electricity should not be a licence to print money at the expense of everyday Australians, and it should never be allowed to become one. This legislation is about ensuring that big corporate electricity providers and cash-hungry state governments do not abuse market power and become robber barons with a light switch. And don't we know all about that? Who can remember the numbers released in August 2018 by Origin and AGL showing profits up by 20 per cent despite the fact they didn't generate any more electricity? That's what you call a monopoly gouging everyday hardworking Australians. This government is going to do something about it—fantastic! I'm pleased that this Morrison government is doing something about this.

Competitive markets work best when there is a clear understanding on both sides of the transaction. People understand that bread is bread and can make an informed choice based on price, convenience and their personal preference. An electricity account, on the other hand, is more complex. Big corporates should not be able to take advantage of customer loyalty and confusion around such complex matters simply to line their own pockets. Any competitive or deceptive practices detrimental to consumers must end. Such practices will only end when targeted disincentives and harsh penalties are imposed to make sure they do end. The spiralling cost of electricity has made reform imperative, particularly in situations where effective regional monopolies mean there is no other consumer choice available. Retail price-gouging, where retailers fail to pass on substantial price savings to consumers, will be prohibited by this bill—and about time. The Australian people are not an ATM for big energy retailers. This prohibition is long overdue and simply corrects the abuse of market power by some electricity retailers.

This bill also deals with anticompetitive contracts designed to cut out the knees from under small electricity retailers to remove effective competition. We wouldn't stand for this type of behaviour in any other sector, and we definitely should not stand for it in the provision of an essential service. The ACCC was established to protect Australian consumers from conduct just like this, and I am pleased to see that the Morrison government is acting decisively to ensure that this unethical behaviour is rooted out. Further, the wholesale contract prohibition in this bill will prevent any deliberate market manipulation and anticompetitive conduct by generators. It's ridiculous that we allow generators to deliberately withhold supply from the energy market in a way that essentially amounts to price manipulation. We would not tolerate big supermarkets or petrol retailers who deliberately shut half their outlets to raise prices in others. Nor should this be permitted to occur in our electricity market. These new prohibitions provide a strong framework to deal with the worst of the misconduct evident in our energy market. The message I hear across Queensland is loud and clear: we must get electricity prices down. This bill will help to do that, and I am pleased that this Liberal-National government has demonstrated the courage of their convictions by tackling the big energy companies head-on.

Any law is only as good as the appropriate authority's ability to enforce it and the disincentive that the legislative penalties provide. This government has not shirked its responsibility in this regard. The legislation allows for a series of graduated and tailored remedies to ensure that the ACCC is empowered to deal swiftly and appropriately with poor conduct, meaning that there is no blind eye or incentive for market players to push the envelope. Initial warnings and infringement notices from the ACCC will put operators on notice immediately, while significant penalties will remove any incentive to simply pay the fines and move on. Any further serious misconduct where a generator refuses to offer electricity financial contracts to a retail rival for any competitive purposes will allow the ACCC to recommend that the Treasurer issues a contracting order.

The most controversial element of this so-called big-stick legislation is the final and most severe element—namely, the mechanism for a court ordered divestiture order. It is important to note that a divestiture order can only be issued by the Federal Court in serious and repeated instances of market manipulation and gouging, only with the recommendation of the ACCC, following a referral from the Treasurer, and only where such an order will result in a net benefit to the public. Divestiture orders can only be considered where a corporation's conduct is shown to be fraudulent, dishonest or otherwise unethical for the purpose of manipulating prices. As with all other remedies outlined in this bill, a clear process must be followed and strict criteria must be met, including the penalties that must be reasonably proportionate and must target the conduct appropriately. Court ordered divestiture under the terms of this bill will not empower the court to order the sale of any asset to a private purchaser. I am confident that this legislation will work effectively to bring down power prices over the term of its life, as the legislation is set to sunset on 1 January 2026, which will be at the conclusion of the ACCC's ongoing monitoring inquiry.

Like any calm and sensible government, we will ensure that there is appropriate scrutiny and make sure that all measures continue to function as intended. The government will also conduct its own internal review in 2024 to comprehensively examine how well the legislation is working and to determine if its life should be extended.

I proudly support this bill as one pillar of the Morrison government's comprehensive strategy to get electricity prices down and ensure we keep the lights on. This is an absolute priority for everyday Australians, and it is a responsibility, and indeed a commitment, that we on this side of the chamber take very seriously. This bill will work in conjunction with the government's other energy policies, including the default market offer and the retail reliability obligation. Both commenced earlier this year. Collectively, these measures will ensure that prices come down and supply is assured for all Australian families and businesses.

It is encouraging that those opposite have chosen to support this bill. While Labor may have been dragged kicking and screaming to support the government's plan to lower electricity prices, it is good to see that they are finally waking up to the cost-of-living pressures faced by Australian families. It is my hope that Labor's epiphany on the virtues of reliable and affordable power will quickly transfer up the road to their colleagues in the Queensland Labor government, because that government's manipulation of the energy market continues to suck money out of the pockets of Queenslanders—all day, every day—and it too must stop. I will quote the figures for those who can't remember: the amount of money collected from the energy assets last year was $1.7 billion, up from $1.4 billion the year before—a massive 15 to 20 per cent increase in one year. That's what you call price gouging by Queensland's state Labor government. If they're not careful, they're going to render those assets worthless and there's $20 billion worth of debt that's secured against those assets. So, if that's added to the existing debt that we've got in Queensland, you're going to send the state broke. Just keep that in mind. Senator Watt especially might like to keep that in mind, given his past involvement in selling assets under the prior state Labor government. To those against this bill, I make one further point. Companies that act ethically and appropriately and do not engage in misconduct will not be adversely affected. In fact, those operators will now enjoy a level playing field, unhampered by market manipulation and anticompetitive behaviour.

Finally, the government understand that this legislation imposes a new framework on players in the marketplace. That is why we are taking the sensible option of giving them six months to understand their obligations—they shouldn't need it—and make any necessary adjustments before the legislation takes effect. This bill is what good government is all about: a focus on the real issues facing Australians, with proper consultation and careful consideration of all factors at play. I commend the bill to the Senate.