Monday, 20 August 2018
Questions without Notice
My question is to the Minister representing the Minister for the Environment and Energy, Senator Birmingham. How is the coalition government shifting the balance of the electricity market in favour of households and businesses?
I thank Senator Hume for her question and her absolute commitment to ensuring that Australian households and businesses have the lowest electricity prices possible, which is the driving intention of the Turnbull government and has been for the last couple of years, as we have worked through reform after reform to drive down energy prices. Today, we announced a series of further reforms to further drive down energy prices.
The Australian Competition and Consumer Commission released its Retail Electricity Pricing Inquiry report in July. They announced and made very clear that the national energy market is not operating in the best interests of Australian consumers and that reform is urgently needed. That's why, today, the Turnbull government has announced that it is going to act on a number of those recommendations. Consistent with recommendations 30 and 49 of the report, the ACCC and the Australian Energy Regulator will begin work on calculating a default price for households and small to medium-sized businesses to replace the current non-price-regulated jurisdictions.
The ACCC found that a significant gap between standing offer prices and market offer prices has become excessive and that consumers have not been seeking the better deals. The default offer will provide additional protection that, for average consumers, could be in the range of $183 to $416. These are real potential savings, which could be between $561 and upwards of $1,400, to households and medium-sized businesses,. The government will also be accepting the ACCC's recommendation to implement a program to underwrite new, stable, low-cost, dispatchable generation for commercial and industrial consumers, ensuring that that's a technology-neutral program as recommended by the ACCC, giving further action to build on our already successful reforms that are already driving down prices.
Opposition senators interjecting—
Order on my left! I have—
Honourable senators interjecting—
Order on my left and now on my right.
Honourable senators interjecting—
Order, Senators Collins and Macdonald! I have asked for silence during questions. Senator Hume, please continue.
Under our plan, as recommended by the ACCC, the AER would be given the power to set a default market offer in each region. Customers who are on high-priced standing offers would see their electricity costs decrease as they move to the lower, default market offer.
The government would also simplify the confusing array of offers that are currently on the market by requiring retailers to use the new default rate as a reference point for all advertised discounts. This will give customers much greater clarity when they consider whether or not to switch energy plans and, if so, which energy plan to switch to. Limits will also be placed on the penalties that customers can face when they don't pay their bills on time and lose their discounts.
The government will work to ensure that states and territories act on this reform but, if they do not agree, will implement it through Commonwealth law because we are determined to make sure this new default offer applies from July 2019 at the latest to give certainty to consumers.
Not only are we going to make sure that these reforms are in place but we will hold energy companies to account to make sure they are delivered upon and that consumers see real benefits in relation to these reforms. The ACCC will prepare ongoing reports identifying cases where outcomes are unacceptable. Businesses will have the opportunity to explain and rectify those issues, but if businesses fail to do so the ACCC will be empowered to recommend proportional and targeted responses, for the Treasurer's determination. The range of enforcements and remedies that could be applied are wide ranging and far reaching, and go further than any such remedies ever proposed before. They range from beginning with a public warning notice to be issued by the Treasurer, through court-enforceable undertakings and the conversion of the default market office into a binding price cap, to, ultimately, the potential divestiture of assets or parts of energy businesses to make sure those businesses understand the severity of their failure to put consumers' rights first. (Time expired)
My question is to the Minister for Regional Communications, Senator McKenzie. Yesterday, when asked about the Prime Minister's last-minute changes to his energy policy, the minister said:
I’m not going to comment on something I haven’t seen the detail of, we are going to take that to the National Party party room, we’ve got a meeting at the Lodge where I am assuming we will be briefed on that tonight.
And post that briefing, post discussing with National Party colleagues and party room I will be much more comfortable in discussing those changes.
When and how did the minister first become aware of the further changes the Prime Minister made to his energy policy on Friday?
Senator Farrell, I don't back away from running policy ideas and positions through the National Party party room. We've been incredibly strong for two years on advocating for an affordable, reliable response to the crisis that is facing households and our local industries, with a 300 per cent increase in power prices in my home state of Victoria, on the back of—
Direct relevance, Mr President. The question is when and how did the minister first become aware of the further changes the Prime Minister made to his energy policy on Friday—that's it.
As senators know, I cannot instruct the minister how to answer a question. The minister needs to be directly relevant to part of the question asked. Senator Cameron, you have reminded her of the final part of the question; she has a minute and 29 seconds remaining to answer. Senator McKenzie.
As I said, we've been advocating for lower power prices for households and for our industries for years. And, as such, our government has instructed the ACCC to do a report into the affordability crisis, which they delivered in June—
The point of order is on direct relevance. The minister made a public statement about internal processes. This question goes directly to that public statement—when and how did she become aware—and I'd ask you to remind her of the question and ask her to be directly relevant to it.
I've made a lot of public statements around the importance of energy affordability and I don't back away from any of them. The comment I made around taking any changes to our government's policy around energy to the National Party party room I think was a sound statement then, and I stand by it. And, following a cabinet meeting last night, where the full package around the government's perspective on this issue was outlined—
Mr President, the question refers to one public statement, where the minister said, 'I haven't seen the detail of'. So we're asking: when did she see 'the detail of'—and she continues to avoid answering the question.
I will step you through: we have the cabinet meeting, the details are presented, I'm happy with those, we go to a National Party party room meeting. The National Party is very proud to be part of a government that's taking direct action to lower power prices in this country by backing and supporting the construction and refurbishment of energy assets in coal, hydro and, indeed, gas; by making sure we adopt the default pricing mechanisms outlined in the ACCC report—a 25 per cent reduction in power prices as a result of that; and by adopting divestiture mechanisms so that we can actually— (Time expired)
As I outlined in my previous answer, cabinet met last night and agreed to a pathway forward, given the reality of the politics that we're in at the moment. The reality for the NEG is that it will have to be pursued through state legislation to ensure the reliability guarantee is met.
What we are seeking to do is to ensure that Australian businesses and households have affordable power. To that end, we've adopted the ACCC's measures in conjunction with ensuring that those big power companies that continue to rip Australians off, that continue to rip businesses off, will be held to account through a tough regime of sanctions, if you like, including divestiture, to address the concentration of power generation assets in this country, which have led to a decrease in competition and an increase in power prices for all Australians.
I have a further supplementary question. At any point has the National Party party room been provided with the details of policy changes announced first on Friday and then today? Do all National Party MPs and senators support the Prime Minister's latest energy policy?
Senator Farrell, I'm sorry that you made your way into question time without actually seeing the press conference by the Deputy Prime Minister; the minister for resources; the Leader of the Nationals in the Senate; the agriculture minister; and me—indeed, the entire cabinet team of the National Party—about 45 minutes ago. We stood as one, post our National Party party room meeting, fully endorsing the Prime Minister's announcement and the cabinet decision last night. And, as one, the National Party have been fighting for affordable, reliable energy across this country. We believe that the initiatives outlined by the Prime Minister this morning face the political reality we are in—that is, the only alternative here is the Labor Party's energy policy, based on an emissions target of 45 per cent and a renewable energy target of 50 per cent. If you think 26 per cent is a problem, go down your path. Your modelling is based on Greenpeace modelling, according to your own energy shadow minister. What a joke! (Time expired)