Tuesday, 13 November 2018
Questions without Notice
My question is for the Minister representing the Minister for Energy, Senator Canavan. Can the minister advise the Senate what the government is doing to reduce power prices for Australian households and businesses and to ensure the reliable supply of electricity?
I thank Senator Hume for that question. I know how seriously she takes this issue and how important she knows lower power prices are for the Victorian economy, especially given the strong manufacturing industry in that state. That is why the government has taken action to reduce energy prices: because we want to protect jobs, particularly in our manufacturing sector. We want to help households lower their budgets and ensure they can balance those budget every year, and we are already taking action to do that.
We have, for the first time, introduced regulations that allow the Australian government to restrict the exports of gas from Australia to ensure there is sufficient gas here domestically. In the last 18 months that has helped lower gas prices by about 20 per cent in the spot market, and offers of gas to large businesses have fallen from $20 a gigajoule, and sometimes more, to less than $10 a gigajoule at the moment—so a 50 per cent reduction in offers of gas to large energy users, particularly those large manufacturers in Senator Hume's home state of Victoria. We've also ended the ability of large companies to challenge regulatory decisions under the so-called limited merits review process. That decision alone has helped save consumers $6 billion by not allowing large companies to challenge regulatory decisions that have been properly made.
We realise though, of course, there is a lot more to do, and that's why we have an extensive plan to lower power prices further. We're doing three major things. We are ensuring that consumers get the lowest possible offer they can by making sure default offers from the large companies come down, and the energy minister met with the energy producers last week to do that. We are also introducing legislation later this year that will ensure governments have a big stick to wield to make sure energy companies don't dud consumers and to provide strong competition in these markets. Finally, we are encouraging investment in new and reliable power generation, because we understand, we know, greater supply of power will mean lower power prices for Australians.
As I outlined, we understand that keeping a strong manufacturing industry in this country relies on us having competitive energy prices, and the thousands of jobs in that industry rely on affordable energy to survive. To demonstrate how important this issue is to our economy, you just have to look at South Australia, where currently electricity prices are some of the highest in the world. They are sitting at around 47.8c per kilowatt hour. South Australians are paying more for electricity than Latvians, at 25.6c per kilowatt hour; Estonians, at 23.4c per kilowatt hour; Romanians, at 21.2c per kilowatt hour; and Hungarians, at 19.3c per kilowatt hour. That is not good enough and that has to change. It's the result of renewable energy targets being forced on South Australian consumers. And now we have a Victorian government wanting to do the same. They're seeing that South Australia has done this to their economy: 'Let's have some of that too.' That's exactly the approach of Daniel Andrews, and it's going to fail in Victoria, just as it has failed in South Australia. We need to get back to the job of providing reliable power to all Australians.
As I was outlining in that previous answer, the risk is that some states, other states, continue to force-feed intermittent and unreliable power to their consumers, which we know from experience will push up prices. We also must ensure that we object to and reject this notion that we shouldn't develop our own resources to provide energy to Australian businesses and families. We are lucky to be blessed with significant renewable coal, gas and other energy sources, and we should develop all of these to help lower power prices. I welcome the fact that, over the weekend in local government elections in South Australia, candidates were elected that support the development of the Great Australian Bight and support the development of oil and gas basins in this country. Indeed, the former antidrilling mayor, Peter Clements, has been defeated by a new mayor, Michael Pengilly, who supports the development of oil and gas on Kangaroo Island, and that is why we need to develop our resources and lower prices for all consumers.