Senate debates

Thursday, 15 December 2022


Treasury Laws Amendment (Energy Price Relief Plan) Bill 2022; Second Reading

1:50 pm

Photo of Katy GallagherKaty Gallagher (ACT, Australian Labor Party, Minister for the Public Service) Share this | | Hansard source

I move:

That this bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech rea d as follows—

This Bill and this Government recognises that Australian households and businesses are confronting unsustainable, unacceptable energy price rises.

We respond with urgent, targeted, meaningful action—to take some of the sting out of these price rises, and to provide direct energy bill relief.

And in doing so, we reject the fib that a functional and fair gas market must also mean the hollowing out of our manufacturing industry, or the destruction of jobs, or the sacrifice of living standards.

It cannot mean that. We will not let it mean that.

The Government respects the important role that the gas industry plays in our economy—and the role it's playing in our transition to net zero.

We support a strong industry that delivers returns on investment and an economic dividend to the Australian people—because it is an Australian resource.

Gas companies have the right to make a profit, and we want them to.

They have a job to do, and we have a job to do as well.

It's our job to find a reasonable and balanced, common-sense solution to these extraordinary events—

To defend our national economic interests -

And to protect the welfare of the Australian people.

Australians are paying a hefty price for more than nine months of Russian aggression in Ukraine -

And nearly nine preceding years of energy policy chaos here at home.

The costs are clear -

Electricity prices are rising by 20 per cent this year—something the previous government knew about, but kept hidden.

Without intervention, next financial year retail gas prices are expected to increase by a further 20 per cent, and electricity prices by a further 36 per cent.

That's why urgent action is needed—including through this legislation.

And when we vote today, every Parliamentarian in this place will make a choice.

To help Australians with rising energy bills—or to make it even harder for them.

To save Australian jobs—or to surrender them.

To support Australian manufacturing—or send it to the wall.

The Albanese Government has made its choice.

We choose to protect households and small businesses.

We choose to defend our local industries.

And we choose to save local jobs.

That's why we must pass this Bill, and pass it today.

The Bill contains two schedules.

One directly addresses gas prices—

The other provides direct assistance to struggling households and small businesses.

Schedule 1 amends the Competition and Consumer Act 2010 to create an enabling framework for two new instruments—to be implemented through regulation.

The first will enable the Treasurer to make an emergency order for a 12-month price cap on new contract sales of gas by producers, sourced from developed fields in the east coast wholesale market.

This is designed to provide short-term relief from the current energy crisis.

The legislation contains a sunset clause so that the power to make these orders ends 12 months after the commencement of any order made—or if no order is made, 12 months after the commencement of the Bill.

Through this instrument, the Government intends to implement a temporary price cap of $12 per gigajoule.

The ACCC has identified this price based on the costs of production and a reasonable return on capital.

And it is still a high domestic price by historical standards.

In 2021, the ACCC found that there were 289 domestic offers made by producers and retailers—

With 96 per cent of offers below $12 per gigajoule, and the average price $9.20 per gigajoule.

The Bill also includes measures to detect, deter and address any non-compliance with the price cap.

For transactions that fall under the scope of the emergency price order, prices above the cap will be subject to enforcement action.

The price cap will be reviewed in mid-2023, to ensure it is having the intended effect, and to consider whether adjustments are needed.

The second instrument allows for a mandatory gas market code to be prescribed to address systemic issues in the market.

The purpose is to ensure that a fair and transparent process applies in the negotiation of gas contracts.

A code can prescribe matters including negotiations between suppliers and buyers, as well as addressing and resolving disputes.

Through this instrument, the Government will introduce a mandatory code of conduct for the wholesale gas market.

The code will be an enhanced version of the existing voluntary code, based on the advice of the ACCC.

This includes strengthening requirements for transparency and reporting, pricing, negotiation timeframes, and dispute resolution.

The code will include a longer-term reasonable pricing provision, again on the advice of the ACCC.

And this is based on the clear expectation that the price of Australian gas for Australian customers should have a connection to the cost of producing it, allowing for a reasonable return on capital -

Rather than being solely subject to the war-time whims of the international market.

For the first 12 months of the code, while the emergency temporary price cap is in place, the reasonable pricing provision will only apply to gas outside the scope of the price cap: gas contracted for delivery later than 2023, or from currently undeveloped fields.

After this, the reasonable pricing provision will apply more broadly to the types of contracts previously covered by the cap.

It will remain in place until the ACCC advises the Government that domestic gas prices better reflect the cost of production, and that there is adequate supply at these prices.

Importantly, the code will include a dispute resolution framework, including binding arbitration.

The Government will consult on the mandatory code in the coming months ahead of its commencement in early 2023, including on the most appropriate way to define reasonable pricing.

Schedule 2 amends the Federal Financial Relations Act 2009 to introduce a new type of payment to the states and territories, in order to provide temporary and targeted relief on energy bills for eligible households and small businesses.

The Bill provides for an appropriation of $1.5 billion to be paid to the states and territories for this purpose.

The states and territories will jointly fund the bill relief, and they will administer the payments through the new funding agreement.

The relief will be applied to energy bills, rather than as direct cash payments to households.

It's written in black and white—this legislation will take some of the pressure off power bills.

The measures in this Bill are crucial components of the Government's broader Energy Price Relief Planwhich also includes action to limit coal prices, and investments in cleaner, cheaper, more reliable energy for the future.

This is a plan agreed by National Cabinet—endorsed by every Premier and Chief Minister, from both sides of politics, and we thank them for their cooperation.

They, like us, know that action is needed now.

Our collective measures to address gas and coal prices are estimated to reduce the impact of forecast electricity prices next financial year by 13 percentage points -

And reduce expected inflation in 2023-24 by around an estimated half a percentage point.

And our direct assistance will provide hundreds of dollars of energy bill relief in addition to these measures.

And that's what this choice—this coming vote—really comes down to.

Higher power prices or lower power prices?

Relief on energy bills, or no relief?

Protecting Australian industry and jobs, or abandoning them?

On this side -

We believe that Australian households and small businesses deserve this support.

We believe that Australian manufacturing deserves a future.

And that's what this legislation delivers -

Support, certainty, security -

For families and pensioners. For small businesses and for large manufacturers.

In the national interest—for all Australians.

Photo of Jonathon DuniamJonathon Duniam (Tasmania, Liberal Party, Shadow Minister for Environment, Fisheries and Forestry) Share this | | Hansard source

May I commence by wishing you, President, a happy birthday for today.

Photo of Sue LinesSue Lines (President) Share this | | Hansard source

Thank you!

Photo of Jonathon DuniamJonathon Duniam (Tasmania, Liberal Party, Shadow Minister for Environment, Fisheries and Forestry) Share this | | Hansard source

But today is not a day for celebrations. It is not a happy day for Australians, because I'll tell you one thing, colleagues: Australians are struggling, and we all know it. It's what we intend to do about it that is important. What we're doing here today in this legislation, which has been rushed together and mixed up in a little room out the back of some ministerial office, is not going to address that issue.

Let's consider what we saw in the months leading up to the election. There was repetition of a particular number, and that number was 275.

Photo of Michaelia CashMichaelia Cash (WA, Liberal Party, Shadow Minister for Employment and Workplace Relations) Share this | | Hansard source

How many times?

Photo of Jonathon DuniamJonathon Duniam (Tasmania, Liberal Party, Shadow Minister for Environment, Fisheries and Forestry) Share this | | Hansard source

It was repeated 97 times in the lead-up to the election. That repetition makes me think that it was a pretty important thing for the then opposition, now government, to speak about. That number, 275, was a promise that the Labor Party made to the people of Australia in order to get their votes to win government. In fact, given they won the election, I would see that as a contract between the government and the people of Australia that voted for them on that basis. People rightly believed the Labor Party when they said, 'We will reduce your power bills by $275.' That number was repeated 97 times, as Senator Cash pointed out earlier on.

But since the election was held, since the ministry was sworn in and since the Prime Minister moved into the Lodge and has spent a lot of time talking to his international counterparts, they have not once said that number—not one minister and not one backbencher. Not in the other place and not here has a single Labor member of parliament referenced that number—275.

We're left thinking, 'Why?' I'll tell you why: it was a broken promise. They told Australians they would reduce power bills by $275. They were clear: there were no terms and conditions and no need to read the fine print. It was as clear as day for every single Australian every time the Prime Minister said, 97 times, 'This is what will happen if you vote for us.' Accordingly, they did vote for them and they expected this reduction in power bills.

It's important to point this out, because you often hear the now government say, 'Things have changed since we made those promises—the war in Ukraine.' It's a terrible event and something we all condemn and wish would end for the sake of those people who are being so tormented by this and whose lives are being destroyed, but the Labor Party made that commitment a further 27 times after the commencement of that conflict. You can't hide behind that as a reason not to deliver on a promise. Not only is it a broken promise; we've gone in the other direction.

What is actually happening here when it comes to Australian power prices? The budget said it all: electricity prices would be skyrocketing by 56 per cent, and household budgets, something we all have to try and deal with, are going to go up. The government's own budget spells that out clearly. They also said gas prices would be going up by 44 per cent.

Here we are, six months on from the election—the election at which that promise I've already referenced a couple of times was made—and there is no plan. But what we have got now is a hastily cobbled together piece of legislation which will not do what the government says it will do. It will not deliver power price relief for Australians in the way that the government suggests it will. Most importantly, it will not deliver on their election commitment. There is no way that that promise of $275, which they made just a few short months ago—so clearly and so often—will be delivered at all.

This has been cobbled together in the worst of ways, and I wonder what process has been gone through to develop this legislation. What were they thinking? Who were they talking to? What was the end outcome they wanted? Was it all about optics? Was it about the stunt of recalling parliament to try and mislead Australians into thinking that all of their energy price woes were going to be resolved by this bill? Was it about that, or was it about genuinely helping Australians?

The fact is that we as an opposition only received this bill, which was so hastily put together, at roughly 8.45 pm yesterday. There was little more than 12 hours between when the opposition received the bill and when debate commenced in the other place. Twelve hours is not a great deal of time to consider some of the most extreme interventions in the energy market we've seen in decades, and I honestly can't understand what they were thinking.

A couple of points have been made with regard to process already. I was listening before to Senator Cash's quite timely contribution about how important the role of this parliament is. Indeed, in the other place, the then Manager of Opposition Business, now Leader of the House, Mr Burke, made very similar points in relation to this, saying:

There is a process that happens with legislation that I have to say does matter. It does matter that members have the opportunity to read legislation …

Well, unless colleagues were staying up all night to then be able to convene as a Senate today to rush this piece of legislation through, without giving it due regard, due interrogation or due scrutiny, that process that was so important in opposition now apparently doesn't matter at all. Senator Cash had it right, because what we're seeing is a government, in this brave new world of the Labor Party, that before the election talked a lot about transparency, scrutiny and the role of parliament but that, in partnership with the Greens, is now expecting this chamber just to rubber-stamp things on false debates. As I say, if there's nothing to hide and nothing to worry about, I'm not sure why we're finishing the debate at 4.30 today and why we couldn't go just a little bit longer and allow those colleagues of mine who wanted to make contributions in the second reading debate and put perspectives from the communities they represent on record to do so. Why wasn't that allowed to happen?

Anyway, here we are, with a costly recall of the parliament to pass this bill, which has been so shambolically put together and will not achieve the intended aims that the government says exist with this legislation. We also have a deal that's been done with the Australian Greens, which we're not going to be able to actually get the details of before we vote on this legislation. Again, where's the transparency? What's to hide? Perhaps we will hear some details about exactly what will happen in the next budget that has been agreed to here by the Australian Greens. Of course, to that end I can indicate that there will be an amendment moved by me on that particular issue.

I will make the point as well, of course, that we do support targeted relief for Australian households and Australian businesses—relief from cost-of-living increases that actually works and will deliver reductions in power bills and in the cost of fuel, food and all of the other essentials that households and businesses need. I foreshadow as well that we have an amendment in the committee stage that goes to separating out the part of the bill that colleagues in the other place have indicated we would support in order to provide relief to Australian households and businesses, but not the other extreme interventionist components of this bill. This bill isn't targeted relief that will work.

As I said before, the government broke a promise about delivering a $275 power price reduction, quite blatantly. I will lay down the challenge now for the minister in her summing-up speech to reference that figure. Let's see if there can at least be a reference to $275. Maybe we're on the pathway to delivering that for Australian households, or maybe, as I suspect, we won't hear those numbers pass the lips of a minister in this government ever again. That promise was broken, and they're now promising that this bill before us today will bring down the cost of power. It won't do that. This bill will not do that, and we know it won't do that. This will be another broken promise.

The real test here is this: when Australian households and businesses open up their next power bill or gas bill, let's see whether the prices have gone up or down from the last one. That is the metric against which Australians will judge what this government has done. And it is the metric against which the government will need to go and explain themselves to Australian people about the promise they made 97 times—clearly, without equivocation—and then failed to deliver, deliberately broke. That's the test.

As I said, it's not just going to be homes. It's also going to be businesses. It's going to be the job generators out there across regional Australia, downtown cities like Melbourne and Sydney and places where manufacturing occurs—energy-intensive businesses which, when power prices go up, are going to rein in costs and are going to sack people. We're going to see jobs going overseas, where it's cheaper to do business and to purchase power to manufacture the goods we should be manufacturing here. If we're interested in looking after our environment, those emissions will be generated elsewhere. This is not going to help anyone. It won't help the economy, it won't help households and it won't help businesses. It will not bring down the cost of living. It will not even help the environment.

Still, here we have higher power prices and we have a government ignoring a very basic principle of economics, the law of supply and demand—the need to bring on supply to reduce pressures on what we have already in place. We only have to look at the comments of people like the Reserve Bank governor, the Secretary of the Treasury and any other energy market expert, who've all made it very clear that the answer to the energy crisis—which this bill purports to drive a silver bullet through—is bringing more supply on. The lack of supply drives up prices.

A point that's been made before, and it's a very important one for Australians to understand, is that you can't switch off the old system without switching on the new. We don't have a new system. We cannot just, in the blink of an eye, replace what we need in terms of energy consumption. We cannot just switch across to some ethereal new energy generation source when we switch off coal and gas. But that's what this government is seeking to do, and the end result is going to be disastrous. It will be higher power prices, not lower ones. It won't be $275 off your power bill, as promised just six months ago. It'll be something far in the opposite direction.

As I said, the Labor Party—all of their ministers and all of their backbenchers—refuse to reference those numbers. So I hope today in passing this legislation—given they've stitched up the numbers in their secret deal with the Greens and others—

Photo of Katy GallagherKaty Gallagher (ACT, Australian Labor Party, Minister for the Public Service) Share this | | Hansard source

It's not a secret.

Photo of Jonathon DuniamJonathon Duniam (Tasmania, Liberal Party, Shadow Minister for Environment, Fisheries and Forestry) Share this | | Hansard source

that they will be able to reference $275 in what they say today. Are we on track to it? Is it still a promise? Is it still government policy? Let's see. While I take the minister's interjection a little earlier on, saying the deal between the Greens and the Labor Party isn't secret, I'm really looking forward to seeing the ins and outs of the details of what exactly has been agreed to here. It's going to be very, very important to this debate.

The big losers out of this, though, are going to be Australians, with households already struggling to make ends meet and businesses becoming uncompetitive. If I can refer to a couple of the criticisms that have been levelled at this from people who actually know what they're talking about. Even for those people who may not want to trust politicians and take them at their word, let's listen to some of the comments that have been made. David Maxwell, the CEO of east coast gas producer, Cooper Energy, said on 11 December this year: 'In my 30-plus years in management roles in the gas industry, I've never seen such destructive legislation.' ExxonMobil slammed the move as reckless free-market intervention and said the rushed and ill-considered policy would inevitably risk gas shortages. Credit Suisse's Saul Kavonic said: 'The damage has already started. Nearly all gas contracting has shrivelled up in the last few days.' And energy market analyst Mark Samter said: 'This is the single worst piece of energy policy I've seen anywhere in the world in almost 20 years of looking at global energy markets.' They are pretty damning pieces of feedback from people who seem to know what they're talking about.

The sad thing is, though, that the government just dismisses these criticisms as people clinging onto profits. Well, again, the real test in this is going to be whether what they do today brings down power prices. That's where it's going to be at, and that's what we need to be focusing on. They have ignored economics 101, ignored the law of supply and demand, provided unprecedented powers to control the Australian energy sector and delegated powers to the Treasurer to make broad-ranging regulations. All of these things we've had just a handful of hours to consider, and by 4.30 today it will have passed the Australian parliament, with the support of the Australian Greens, and Australian households and Australian businesses are all going to be worse off.

I repeat: the test will be that the next time you get home and you open your bill at your kitchen table, your power prices need to be lower. If they're lower, they've done the right thing. But I'm taking a bet here: they won't be lower; they will be higher. This bill will not do what the government has said it will do, and the losers will be the Australian public, Australian businesses and this country as a whole. It is a broken promise again, just like the last time.

Photo of Dorinda CoxDorinda Cox (WA, Australian Greens) Share this | | Hansard source

Before we move on, Senator Duniam, do you want to move your amendment on sheet 1793?

Photo of Jonathon DuniamJonathon Duniam (Tasmania, Liberal Party, Shadow Minister for Environment, Fisheries and Forestry) Share this | | Hansard source

Yes. I move the second reading amendment standing in my name:

At the end of the motion, add ", but the Senate orders that:

(a) there be laid on the table by the Minister representing the Treasurer, by no later than midday on Thursday, 9 February 2023, details of the agreement between the Government and the Australian Greens relating to the passage of the Treasury Laws Amendment (Energy Price Relief Plan) Bill 2022, including any undertakings, letters or other documentation; and

(b) further consideration of the bill be made an order of the day for the first sitting day after the order in paragraph (a) is complied with".

2:05 pm

Photo of Larissa WatersLarissa Waters (Queensland, Australian Greens) Share this | | Hansard source

I rise to speak on the Treasury Laws Amendment (Energy Price Relief Plan) Bill 2022. The fact that we're back here today, a week before Christmas, shows that it's finally becoming clear to this government that the cost-of-living crisis needs urgent attention. We know that people across Australia are doing it tough and that, obviously, this is often the time of year when people feel it the most.

The cost of living just keeps rising, much faster than wages are rising. Rent, going to the doctor, putting food on the table, electricity bills, shoes for the kids, petrol, mortgage payments—everything is more expensive. The only ones not having a tough time are the big corporations and the fossil fuel sector. They are making record profits while ordinary people are struggling. Gas corporations such as Santos and Woodside are making billions in profits and paying next to no tax. According to a report released this morning, coal exporters made a windfall gain last financial year of $45 billion. Fossil fuel companies have been profiting from the war in Ukraine and making record profits. Coal and gas companies are destroying farmland in Queensland while farmers in the New Acland mine have to fundraise to protect their water supplies.

This problem has been created by the Liberal and Labor parties because they give too much special treatment to the coal and gas industry. It could be because of the promise of cushy postparliament lobbying roles within the fossil fuel industry, or maybe it's that the major parties have accepted $11 million in donations from the fossil fuel sector in the past decade. And, what do you know? every year over $10 billion in public money—subsidies for fossil fuels—is handed back to the coal and gas industry. It's a good return on investment for them, but it's a terrible deal for the rest of us and for the planet. In the most recent budget, the Labor government gifted $1.9 billion of new money, public money, for gas in the Northern Territory, and that's on top of continuing the nearly $40 billion of fossil fuel subsidies put in place by the former government.

There are 113 fossil fuel projects in the pipeline that this government has refused to rule out. Despite the damage this is causing to our household budgets, to our national budget and to our climate budget, there are efforts underway to expand more gas in my home state of Queensland. We've seen billionaire Gina Rinehart trying to get more gas out of Queensland. We see continuing threats to frack the sensitive Channel Country, an area that the Queensland and Commonwealth governments have previously committed to protect—and we see this despite clear opposition from First Nations owners and farmers. We do not need more gas. Gas is just as dirty as coal and its extraction risks our land and water. We need to stop the gas industry from ripping us off, disrespecting First Nations communities, and mining and burning a product which is destroying the planet.

This bill is a first step towards the coal and gas corporations taking a much needed haircut. It will give powers to the minister to implement a 12-month price cap on the price of gas, which the government has said they'll set at $12 a gigajoule. In conjunction with the coal price caps to be implemented by New South Wales and Queensland, this will deliver approximately $230 per household in savings over the coming year. But, sadly, this doesn't mean that people will pay less on their gas and power bills. Those bills are still going to increase. They will just increase by less than they would have without this piece of legislation.

This bill also allows the government to provide $1½ billion of funding, co-funded by another $1½ billion from the states and territories, to households and businesses to reduce power bills. Now, this is a start, but it's not enough. It's one-sixteenth of the amount that the government just gave in stage 3 tax cuts to the rich in the recent budget. Those folk get $24 billion a year, and ordinary people are getting only $1½ billion. That's why I'll be moving a second reading amendment to raise the rate of income support so that people can be helped out of abject poverty, and to freeze power prices for two-years at the level they were before the war in Ukraine, to be funded by the big coal and gas polluters. That's what the Greens will continue to push for even after this legislation passes, and it's what households deserve.

Unfortunately, we couldn't get the government to agree to make coal and gas pay a windfall tax from their record profits to help households. We were able to get the government to agree to a support package in the next budget to help low-income households, renters and businesses get off gas and switch to high-quality electric appliances. That will lower power bills, reduce emissions and reduce health impacts. The government has agreed to work with the Greens to develop a significant package of measures to help households and businesses electrify their operations, improve their energy performance and cut energy bills as part of that 2023-24 budget process. This will help roll out electrification to businesses and households. We'll be particularly looking to support those groups that have struggled to access the benefits of home electrification, like people on lower incomes, private renters, people in public and community housing, and folk in apartments.

If we're going to transform this country to run on 100 per cent clean, green renewable energy, which we need to do as soon as possible, we need a solution for everyone to access thousands of dollars of energy savings and climate benefits, not just those with disposable income who can afford to upgrade their rooftops, cars and appliances. The Climate Council has looked at the financial benefit of electrifying homes, and it's estimated that a household can save between $500 and $1,900 a year by switching from gas appliances to electricity. Unlike the $230 the government's modelling says will be saved by this 12-month-only price cap, those savings would be permanent. They will be delivered year after year.

One extra dirty little secret that the gas industry excludes from its sales pitch is that gas in your home is hurting you and your family. Gas cooking in the home has been estimated to be responsible for up to 12 per cent of the burden of childhood asthma in this country. There are so many good reasons to get out of gas. Keeping gas in the ground and replacing it with renewables is the best way to secure real cost-of-living support, real action on climate and fewer health impacts for our kids, so of course the gas industry is having a meltdown and threatening to deny gas to the east coast gas market. This is cartel-like behaviour, and it's further evidence of why a lot more government intervention in this market is urgently necessary.

As part of our arrangement to pass this bill today, the Greens also secured a number of important guarantees. We've confirmed that the compensation to households will be wider in scope. It will not be settled this year and we will keep pushing for more help for more households. We've confirmed that this package does not contain any of the coal subsidies that have been spoken about in the media. While my colleague Senator McKim will say more about this, let me be crystal clear: the Greens will never support any subsidies going to the coal and gas industries. If the government brings future legislation to give effect to any coal or gas subsidies, we will oppose it. The coal and gas companies should be compensating the people, not the other way around.

People in this country should not be held to ransom by the international gas corporations. This bill is a start on protecting people from their bottomless greed, but there is a lot more to do. The Greens' demands are simple: no more coal and no more gas; no more public money for the coal or gas industries; freeze power bills for two years at the rates they were before the illegal war in Ukraine, to be funded it by making those massive corporations pay their fair share of tax while we transition off those dirty industries to clean, affordable, renewable energy, which is job rich.

It's good that Labor has taken a first step to stand up to these powerful interests. On top of the 12-month price cap, the bill gives the minister powers to introduce a mandatory code of conduct for the gas industry. This will allow the government to begin taking back the reins on who controls our energy markets from the big gas corporations. It will take courage to tackle those special interests, and we will keep pushing the government to do so.

Banning political donations from the fossil fuel industries would also break the chains and allow parliament to stand up for the community, not the vested interests of big corporations and political donors. With the Greens, Labor has the numbers to stop new coal and gas, to make them pay their fair share of tax and to end the public subsidies, or Labor can choose to run scared of the power of the gas industry and their threatened advertising campaigns. With the powers in this bill the government will now face a choice, and we'll keep pushing them to make the right one. We'll be moving a series of amendments to give effect to some of the points that I've made, and I foreshadow the second reading amendment standing in my name.

I conclude by saying: we are in a cost-of-living crisis. We need to bring people's power bills down, and we need to speed up the transition to clean, green renewable energy, but we think that coal and gas companies should be paying for that transition and for those subsidies out of the record profits that they have made off the back of the misery of the people in Ukraine. We are deeply disappointed that the government would not join in taking on the coal and gas corporations and making them pay their fair share of tax, but we will be supporting this payment as slight relief for folk. We will keep pushing for broader cost-of-living relief not just in the climate context but in all things, whether it be access to mental healthcare support, dental health care, housing—you name it. Government should be delivering for the people, not just for the big companies and the fossil fuel industry that's tried to run this place for so long.

2:16 pm

Photo of Susan McDonaldSusan McDonald (Queensland, National Party, Shadow Minister for Resources) Share this | | Hansard source

or McDONALD () (): Today we are faced with an unpalatable fact: either Labor don't know the consequence of the Treasury Laws Amendment (Energy Price Relief Plan) Bill 2022 and are incompetent, or they do and this is the most malicious piece of legislation that will see gas shortages and increased electricity prices and will drive up unemployment. Be very clear: this is an attack on the resources sector, a sector that currently, through royalties, taxes and investment, is the backbone of our economic strength. It pays for our health system, for much of our education system and much of our roads and infrastructure. Much of what we're going to hear today from the other side completely misunderstands the structure of the Australian economy. If Australians knew what Labor and the Greens were passing today, if they knew what the future holds for them in the very near future, they would rightly be devastated because this legislation is selling out their future.

This is one of the largest and most significant government interventions that we have seen in the market for decades. The Albanese Labor government is too arrogant and too deceitful to allow proper consultation. It was still in the oven being baked last night, and it's come out completely uncooked. History has shown time and time again that price caps will only result in supply shortages, and that leads to price rises. This is economics 101. Australians need to brace for blackouts, higher prices and investment uncertainty in the months to come. This is panicked policy on the run. It's full of loopholes and unintended consequences. It raises more questions than it answers. It provides less certainty. I'll be asking questions on this today, as I will before debate and discussion is gagged. It certainly won't deliver the $275 electricity cut that was promised 97 times by the Prime Minister. It will actually still mean that electricity prices will increase by 23 per cent. It will lead to energy rationing and blackouts. Labor will continue to tell you how important manufacturing jobs are to them, but this will not be about saving manufacturing jobs. This legislation will undermine those jobs. This is a disgraceful betrayal of all Australians.

This legislation is a policy failure. Despite nine years in opposition and six months in government to develop this policy proposal that they keep saying should have been made, instead, a week before Christmas, the PM announces a policy and, six days later, here we are considering legislation that the ink is still wet on. The Treasurer, who has never run a business, now wants to run the entire Australian gas industry, and through his comments this morning we see again how little the Treasurer understands his own legislation in this place. It reaches far beyond a 12-month price cap. It creates a permanent cap on rates of return. This is a diabolical deal between the Greens and Labor. This massive overreach gives the government power to set the price and force companies to provide or not provide gas supply, and it allows the Treasurer the power to decide who gets gas in this new gas shortfall environment.

Energy experts have already been quoted as saying that this is the single worst piece of energy policy in the world in the last 20 years. That's after almost 20 years of looking at global energy markets, and despite staunch competition from many other dreadful policies around the world. That's not a competition that we want to win. The damage has already started. Nearly all gas contracting has shrivelled up in the last few days. The unprecedented market intervention that's been announced risks driving investment out of the system. This is the part that the Greens and Labor do not understand: the incredibly competitive environment that we live in for investment dollars.

The Prime Minister had a lot to say before the election on how under his government we would do things differently. As recently as March he was saying: 'I want proper process. I want to consult people.' Yet we are seeing legislation that the Greens and the crossbench agreed to support before they'd even seen the words on the page. The unintended consequences of passing this legislation in haste are deeply concerning, and I guarantee you, Mr Acting Deputy President, that we will be back to make amendments.

I mentioned that this bill will delegate power to the Treasurer to make broad-ranging regulations to control pricing, contracting, and purchasing activities in the gas market. It reaches far beyond a 12-month price cap. Such market intervention will result in a permanent cap on rates of return, something that even the worst tin-pot autocrats haven't imposed on their upstream resources sector for fear of strangling investment and supply. In Europe currently, guess which jobs are going? They're manufacturing jobs, because there is not a Treasurer in the world who will choose to supply gas to manufacturers, rather than to households to use for cooking, heating and living their lives. So I say to all the manufacturing companies who are greeting this legislation with joy: be very, very afraid, because you will not be at the top of the Treasurer's Christmas list when it comes to allocating gas.

We know that the answer to reducing the cost of energy, the cost of gas, is more supply. We are a nation blessed with resources, and the arrangement that this nation has with investors, both domestically and abroad, is that the investors take the risk. They provide the capital, the workforce and the planning approvals to access our resources, and in return they pay royalties, company tax and PAYG taxes and they invest in operational capital investments that flow to small Australian businesses—businesses in my part of the world, regional Australia.

This rushed legislation has loopholes and provides no clear solution to this crisis. The mandatory code of conduct does not include retailers. Normally, the Greens would want to know what these gaps were. They would be keen to make sure that they were part of passing reasonable and good legislation. Instead, they have allowed this bill to be rushed through, with unintended consequences that we will all regret.

This breach of faith, in bringing legislation to the House and then the Senate with absolutely no oversight, is not new. The gas companies earlier this year were asked to join a heads of agreement to cover what was expected to be a supply shortfall in the market. They did that; 157 petajoules of gas was agreed to be supplied to the market. But now, only a few months later, they have been demonised, and it's been another breach of faith for important investors in our economy.

We know that Ministers Bowen and Husic have no desire to support a gas industry. Minister Bowen called a gas-led recovery BS. Husic called producers greedy. The Greens and teals don't want cheaper gas; we've already heard they hate gas. But their support of this policy will increase prices and hurt the very people who they proclaim they want to assist. They have no understanding of reality, the competition for investment that we are under and the huge amounts of taxes that are paid in this nation.

There is no industry support for this legislation. Labor has ignored all expert advice. Regional towns like Roma and Miles have prospered due to the gas industry. The agricultural people in that region have prospered due to more jobs and support to stay on their farms. Those regional jobs are threatened. Family businesses are at risk. Labor does not care about these communities. They're looking for a headline, not good policy. This is cheap politics from some back-room boys, and it is not about the future.

We are an export nation. We rely on investment from super funds and from offshore to make the most of our extraordinary assets. This legislation has run an icy finger down the spine of every project in this country, every well-paying job and every GST or other tax dollar that currently goes to supporting health and education and infrastructure in this nation. We support household relief. We asked to split this bill to allow for that part to be passed singly, but Labor voted that down, because they are more interested in playing politics than in good policy.

Labor's modelling shows that electricity prices will go up next year by 23 per cent. There will be no reduction of $275, as promised 97 times, and the retailers, which will not be included in the mandatory code of conduct, can still game the spot market with high prices. Credit Suisse has warned gas price fixing will increase the risk of blackouts as early as 2023. EnergyQuest are warning of 19 years of supply now being stranded. Price caps have been proven to lead to shortfalls. The lack of investment and the lack of exploration and development mean a lack of supply. A shrinking supply will mean blackouts, will mean gas rationing and will mean higher demand and higher prices.

We've heard several times about this all being the fault of the war in Ukraine. This is an absolutely outrageous conclusion to draw. Our energy market and the European energy market are literally thousands of miles apart. The root cause of the energy crisis in Australia is the lack of reliable energy sources, the low renewable energy generation and the lack of baseload power. We saw last winter the spike in prices when coal-fired power stations, which had not been able to be maintained during COVID—and which, let's be frank, had received clear signals from Labor about their lack of support—had to go into maintenance. Next year, we expect the Liddell coal-fired power station to go offline. What do we think is going to happen then? The Greens might also be interested to know that the international spot price today is $50. The Wallumbilla price is $13.90. We are not linked markets. You have to stop repeating that lie.

We know that price caps, price fixing and market intervention continually fail. Argentina and the United States both attempted this. Both ended up with greater reliance on overseas supply and higher prices and finally had to incentivise energy providers—resource companies—to come back to the market.

Labor is at war with the resources sector. Investment confidence is plummeting due to the layering of legislation that's been brought before this House—the damaging industrial relations legislation, the EPBC projects that have been called in, the 44 gas projects being reviewed under NOPSEMA, the $10 million funding for the EDO and the new EPA. These are all things that lead to greater investment uncertainty.

So Labor is promising that the lights will stay on, that the electricity prices will go down and that your job will be secure and better paid. They promised 97 times that the power price would reduce for you by $275. So when the lights go out, when you can't turn the gas on, when the bills go up, when your job comes under threat and unemployment rises, you will know who to blame. These are the inevitable outcomes that Labor is not being honest with Australia about.

2:30 pm

Photo of Malcolm RobertsMalcolm Roberts (Queensland, Pauline Hanson's One Nation Party) Share this | | Hansard source

As a servant to the many varied and hardworking people in our Queensland community, I'm happy to travel back to Canberra for this session, while recognising that, due to yet another Labor-Greens-Teal-coalition rushed bill, many senators cannot. I have submitted a document discovery today to find out exactly how much taxpayers' money is being wasted on this disgusting spectacle. It would have been wise for the government to work out what we were returning for prior to recalling the Senate instead of this chaos to get a bill ready at 9.30 pm last night, and I read it on the plane down. With no committee oversight, no public scrutiny, no industry scrutiny, this is a shocking bill being rammed through, courtesy of the ALP, Greens, Teals and Senator Pocock, in a single day, in hours, in return for quid pro quos next year.

There is a point where the process this government uses to get Greens', Teals' and Senator Pocock's support that moves past what is proper into very questionable territory. Under this bill the gas industry is being murdered for the financial benefit of rival industries—wind and solar—which are financial supporters of the Greens' and Teals' Senator Pocock. It should be clear now, surely, that the Labor Albanese government are not the ones running this country. In the Senate, the Greens-Labor-Teal-Pocock alliance together run the government.

I am sure the Treasury Laws Amendment (Energy Price Relief Plan) Bill 2022 has been met with popping champagne corks from comrades on the Labor left; Soviet style powers in the government's graft right now. The government regulation will decree what gas can be sold, to whom it can be sold, for how much it can be sold, who can be refused permission to buy or sell, and who can be forced to buy or sell. The Greens and Teals can't wait to write those regulations, a frightening power grab from a desperate government without a clue how to solve the energy crisis it helped to create and now worsen. What industry will be next?

Don't be fooled by this talk of temporary price caps; this legislation includes a code of conduct with permanent price controls built in. How much will that ongoing cap be? This is done through legislative instrument, so, whatever the cap is, the commissar—sorry, the minister—can change it at the stroke of a pen with no appeal mechanism. Make no mistake, if this bill is passed , those regulations will escalate in lock step with the government's desperation to control runaway energy inflation caused by escalating power shortages.

Under the Liberal-National government, tens of billions of dollars in direct subsidies have been poured into unreliable wind and solar. These are incapable of supplying baseload power at any affordable price. Because the market has not closed hydro carbon power down as fast as climate bedwetters want, coal-fired power stations are now being threatened with closure using state government powers. This is what is known in finance circles as political risk. As the supply of electricity becomes less reliable, afternoon price spikes are becoming common, and everyone's power bill goes up. There is a lesson here: intervening in energy markets to push a political ideology has unintended consequences.

With this legislation, Australia is preparing to take our place alongside the Weimar Republic, Yugoslavia, Hungary and Venezuela on the list of governments who ignored and, as a result, destroyed their economies. Venezuela should be a lesson for Australia. Socialist President Maduro spent his first term in 2012 spending every cent the government earned from oil experts. Windfall revenue was spent on programs that sounded good on social media yet proved unsustainable. Australia is spending every cent we earn from coal, gas and mineral exports, just like Venezuela did. When the oil boom ended, Maduro started printing money to keep wasteful government spending going. Australia over the past three years printed $500 billion using electronic journal entries. Maduro's 'print and spend' caused prices to double each week, and Maduro responded with price controls. Australia's inflation rate is at a 30-year high—nothing like Venezuela's, and yet we have price controls being introduced with this bill. Price controls cover up the problem. They never solve it. They make it worse. To take such an authoritarian measure is an indication that something has this government and the premiers spooked—likely the real inflation rate that will result from net zero measures. Time will tell. The way in which a Western country like Venezuela lost control of their economy should be a warning to Australia. For three years, 'print and spend' measures have been waved through on Liberal, Nationals, Greens, Labor and, now, teals uni-party voices.

Labor did not inherit Scott Morrison's mess; Labor in the states were part of Scott Morrison's mess. Whether our inflation rate from this point forward moves up or down is squarely in the government's hands. A small number of people in the government think that they are smarter than the free market—the collective will and ideas and hearts of millions of people. The same free market has, for generations, successfully combined hundreds of thousands of workers with hundreds of billions of dollars of capital equipment in order to successfully manage trillions of dollars in minerals resources for the lowest cost to the customer. Now, though, our federal and state Labor governments, together with the fake Christian, fake conservative New South Wales government of Matt Kean and Dom Perrottet, think this piece of legislation will fix what they broke. Rubbish! So much hubris combined with so little knowledge of history and economics will be the downfall of our beautiful country. Venezuela, here we come.

In six months, the Albanese government has steered Australia from welfare liberalism to socialism. The next port of call will be statism, before Labor reach their ultimate destination: communism—and we will go back to feudalism. I notice some commentators have been calling for the government to penalty-tax the very high profits being experienced in the mineral industry in recent years. Instead of making money for taxpayers, the Prime Minister decided instead to just destroy those profits so that shareholders don't get them, the taxman doesn't get them, nobody gets them—and the taxpayers are paying $1.5 billion a year in borrowed subsidies from our debt-financed budget. One point five billion dollars over two years is only one per cent of the household and small-business electricity market. This measure is more public relations than realistic assistance.

One Nation will not be wedged on this payment. Borrowing money from Australians to give back to Australians is a pointless exercise. It literally transfers money from children to their parents, and responsible parents do not fall for this rubbish. It is a sugar hit that takes attention away from why electricity prices are so high. Rising electricity prices come from several different aspects of the government's net zero transition, which, for clarity, is a transition away from cheap and reliable coal baseload power to fairytale, nature-dependent solar and wind power. Treasury are projecting electricity prices will rise 36 per cent next year. If passed, this bill will reduce that rise by 6.5 per cent, and, if the states cap the coal price, this will save another 6.5 per cent. In any event, electricity is still going up next year. Households can expect a rise of $420, using the government's own sums, a rise of 23 per cent—almost a quarter higher. When these measures fail—and they will—the rise will be $650. Today I submitted a motion for a document discovery on the modelling claiming the increase will be 23 per cent, not 36 per cent, including the element of any electricity price rise caused as a result of the Ukraine war. I look forward to seeing this modelling.

The Treasury Laws Amendment (Energy Price Relief Plan) Bill 2022 deals with gas only. The Albanese government has dumped the coal price ceiling onto the states to avoid having to pay compensation. John Howard's government pulled that same bypass around the Constitution when he took property rights away from farmers to meet the UN Kyoto targets, without paying a cent of compensation to farmers. The Albanese government has joined John Howard's government in destroying trust in government, with the result that government must now apply more and more coercive measures to govern.

Australia's gas price has been a problem since the end of 2020. The Australian Energy Regulator, the government agency itself, confirms that rising gas prices started more than a full year before Russia invaded Ukraine. Treasury and the government's spin doctors blaming Russia for electricity price rises is dishonest. It is deceitful. Gas and coal price rises have resulted from the need to back up unreliable wind and solar with gas, combined with colder temperatures and a wind drought across Western Europe, at the same time the idiots in power in Western Europe closed their coal and nuclear plants. Gas became the only thing keeping the lights on. Dishonestly blaming Russia instead of the correct cause, net-zero energy deficits, will lead Australia down the same dishonest, inhuman path as Europe.

This bill quite simply fixes the wrong problem. The war on coal has meant Australia cannot meet the world demand for coal, and as a result prices are high and market demand has switched to gas, whose prices are now going up. Australia has a coal and gas supply problem, not a price problem. Australia must take the jackboot off the coal and gas industries and allow more production. Rather than imposing old Soviet style controls on the gas industry under this bill, the federal government could have gone with a much simpler and less onerous option.

Western Australia has had a domestic gas reservation since 2006. This requires gas extractors to reserve 15 per cent of production for Australian domestic use. This scheme has produced a gas price around $5 a gigajoule, which is production cost plus a fair profit. Prime Minister Albanese could have used this system on a national level. He chose not to. Instead the Prime Minister has gone with old Soviet style legislation that will cost Australians twice as much for gas as a reservation system would have cost. Why would they do that, unless the reason for the legislation is not the price cap and is instead this bill's industry control powers? In two or three years time the public will be marching on Parliament House to protest electricity bills that will be so out of control that power companies will be disconnecting people left, right and centre. Once the serious protests start, this government will reach for the permanent price controls in this bill to force coal and gas extractors to sell to electricity generators at next to nothing just to save themselves.

There is a showdown coming in this place. This morning Adam Bandt confirmed that the Greens and teals are committed to eliminating the gas industry. Hydrocarbons have lifted Australia and the world out of poverty. The Greens will cast our beautiful nation back to the Dark Ages. Gas is essential for firming solar and wind, which means gas and coal are the only things keeping our lights on, our fridges running, industry functioning and electric vehicles running. Without gas and coal, the economy will be entirely reliant on nature-dependent solar and wind power and battery backups that carry a price tag above $100 billion and require renewal every 10 years. Green energy is no energy. Eliminating gas and coal is insanity.

The Albanese government's proposal for a coal price cap will not reduce electricity bills and likely will increase them. Coal plants buy coal on long-term supply contracts. The cost they are paying is not the spot price; it is much, much less. The cap of $125 a tonne is above the current contract supply price currently being paid at coal-fired power stations in Australia, of $80 to $100 a tonne. It is likely that suppliers will increase their supply price of coal to $125, knowing that's the safe limit. A coal price rise is the most likely outcome from these measures. A 6½ per cent fall is technically impossible.

Let me tell you why. For the sake of the government argument, let's assume the price of coal in 2023 would have been $175 and is now $125 as a result of the cap. Let's have a quick look at the effect of that $50-a-tonne reduction. The energy density of coal is high, 6.7 kilowatt hours per kilo, which means one tonne of coal produces 6.7 megawatt hours of electricity. That's enough to run 1,600 homes in Queensland for a day. So, with a $50 saving divided by 1,600 homes, at the most simple level of analysis this measure will save householders 3c a day on their electricity bill, not 6½ per cent, which is $110 a year, because coal fuel costs are a tiny portion of the coal-fired electricity price. The government's measures are being sold with a deceitful public relations spin hiding onerous Soviet style controls that are the real reason for this legislation. There's another serious risk to our energy security this bill ignores: rising interest rates. But I won't go into that in detail.

There is an entirely better way, even to the global warming believers, One Nation's plan can deliver cheap, stable baseload power without upsetting your sky god of warming. All we have to do is stop closing coal-fired power stations, build Collinsville Power Station and replace Liddell with modern HELE power and transition Australia's coal generators to modern HELE power. Transitioning to clean coal and ending government handouts for renewable, fairytale solar and wind power will dramatically reduce electricity bills. It's time to walk away from this net zero dumpster fire.

I call on the Senate to reject this bill and say no to Soviet-level powers that will inevitably backfire and cause an economic and social catastrophe that will hurt the people. One Nation has been right to oppose net zero madness for 25 years. We will continue to be a voice of reason, bringing better solutions to this parliament—solutions that will provide everyday Australians and the businesses we all rely on with opportunity and prosperity for all. We have one flag above this parliament; we are one community; we are one nation.

2:45 pm

Photo of Michaelia CashMichaelia Cash (WA, Liberal Party, Shadow Minister for Employment and Workplace Relations) Share this | | Hansard source

I too rise to make a contribution, albeit a very brief one, on the Treasury Laws Amendment (Energy Price Relief Plan) Bill 2022. Given that the debate, in total, guillotines at 4.30, I will make my remarks incredibly short to ensure that we have some time in the Committee of the Whole this afternoon. I want to address three issues. In the first instance, though, I foreshadow that I will be moving a second reading amendment to refer schedule 1 of the bill to the Economics Legislation Committee for inquiry and report by 7 February 2023.

The first issue I want to address, as we saw this morning, when the motion in relation to the hours of meeting and routine of business for today was moved, is the absolute chaos in terms of the process—if, in fact, you can even call it a process—that this bill has been through to actually get to this place, but also the sham of the Senate sitting today for about 3½ hours. For anybody listening in, including those in the gallery who are interested to read more about this, I refer you to an article in the Australian today by Henry Ergas, an esteemed economist, titled 'Bill to set gas prices a power grab by stealth'. The first three paragraphs should worry all Australians.

Late last Friday, Treasury, setting what may well be a new record, gave interested parties all of two working days to comment on a 54-page draft bill that threatens to up-end gas industry investments worth billions of dollars.

Compounding the disregard for good policy process, there was no sign of a regulation impact statement—

insert 'shame!', quite frankly, there from me—

assessing the proposed legislation's consequences, or even of a ministerial exemption from the statutory requirement for a RIS to be issued.

But if any legislation merits serious scrutiny, rather than being rushed through parliament, it is this one, whose effects will weigh on Australia's economy for decades to come.

To anybody listening in, that's from an article by Henry Ergas in the Australian today. It is an absolute disgrace that we have just over 1½ hours left now to interrogate this bill.

The second issue I would like to address is in relation to the test. The test for the Albanese government is a very simple one in relation to this legislation: will Australians' bills in the coming months and years go up or down? Because they have promised one thing and one thing alone: energy bill relief. So that is the test. There is no other test. The next time, as Senator Duniam so eloquently said, you open your energy bill, has Labor passed the test?

The bad news is this—and, again, because we don't have a lot of time to scrutinise the bill, we won't be able to explore this in detail: despite the cost savings in this bill, and we support the cost savings, the bill itself will leave consumers worse off. Buried in the announcement of the bill is that energy prices are now forecast by the government to increase by an extra six per cent in the 2023-24 years than they were at the time of the budget. They're going higher, in other words. In the budget the forecast was 30 per cent. Treasury officials have confirmed that this is a revised forecast informed by the Australian Energy Regulator. What does that actually mean in plain English? This is what it means: your bill is still going up. The government's own modelling—this is their modelling—means Australians' energy bill will still increase by over $400 in 2023-24 and, further, by a cumulative $702 over the next two financial years. You'd think, listening to those on the other side, that there was a windfall today for Australians in relation to their energy prices, but the government's own modelling shows that bills are still going up.

There is a third issue I'd like to briefly address. In her speech, Senator Gallagher said, 'We've consulted with industry.' The bad news is this, as Mr Dutton said:

It's little wonder energy experts are calling this package the single worst piece of energy policy seen anywhere in the last 20 years.

Others say:

… the government's proposed gas market legislation risks the very foundations of the east coast energy grid and all who use it.

Even worse, others say:

The damage has already started: nearly all gas contracting has shrivelled up in the last few days.

Further, others said, 'This policy breaks the gas market design that has kept the lights on for decades.' And the government tells you it's going to work. I'd listen to the experts if it were me, the experts who are in this industry and who know the effect of this type of government intervention.

I said I would keep my comments brief. I end with this: yet again, the test for the Albanese Labor government in relation to this legislation is a simple one. Will Australians' bills in the coming months and years, because this is not a one-off, go up or down? That is the test. There is no other test.

2:51 pm

Photo of Nick McKimNick McKim (Tasmania, Australian Greens) Share this | | Hansard source

There's a pattern emerging, as economic inequality explodes, as the cost of living climbs, as the climate breaks down around us and as our ecosystems crumble underneath us. We saw it when the pandemic hit and we are seeing it here today. Whenever the failures of laissez-faire capitalism become conspicuous, socialism starts to look pretty good, even to politicians who dare not speak its name.

And here we find ourselves today. Parliament has been recalled because coal and gas companies are profiteering off the back of a war, and, in a deregulated energy market with mostly privatised electricity suppliers, energy bills have gone through the roof. We need to do something collectively, and the government is moving to cap wholesale energy prices. Importantly, the government isn't planning to put a ceiling on power prices. That's not what this legislation does.

The Greens have been calling for a freeze on electricity bills, and we are providing the government with a mechanism to do this. There's no limit in this legislation to the amount of money the government can allocate to help people pay their power bills. If people have to pay even a single dollar more on their power bills than they currently do, it'll be on the government.

Let's be clear, also, about emissions. The government is not doing what is needed if Australia is to help prevent the breakdown of our planet's climate. Sure, we agree that under this government we are not going off the cliff as fast as we were under the previous government. But make no mistake: we are still going off the cliff. Instead of taxing the coal and gas companies' super profits—and that is actually what the government should be doing: taxing these wartime super profits and using that revenue to provide genuine cost-of-living relief, including by freezing people's power bills—the government is planning to give the coal companies even more public money.

This is the upside-down world of climate and energy policy in Australia. The coal companies make record profits and electricity prices go berserk, and then the government turns around and gives more money to coal companies to guarantee their mega profits. These subsidies, importantly, do not form part of this legislation. I want to be clear: the Greens do not, never have and never will support public money going to the big fossil fuel miners, producers and generators. We will fight, as we always have, to prevent that from happening.

What's also shameful, and a massive missed opportunity, is that the government has yet again passed up the opportunity to fix the utterly broken petroleum resource rent tax. Despite reaping megaprofits on the back of a global boom, many global gas giants are forecasting that they will not pay a single cent in the PRRT. This is what you get when fossil fuel companies take over the nation's parliament. Money talks, and their millions of dollars in donations to the major parties talk very loudly. Make no mistake: the resources industry calls the tune in this place.

Yes, we will be supporting this legislation, but we want to be very clear that even when it passes there will be a long way to go to provide the cost-of-living relief that people who need it the most genuinely need. We have a long way to go before Australia is playing the global leadership role we have to play in addressing the breakdown of our climate. We have a long way to go before we have a parliament that is free from the stranglehold of the resources industry.

I have some questions for the minister. I hope she's able to respond to these questions in either the second reading debate or the committee stage, but I'll place them on the record now. Will the reduction in the wholesale power price mean that some renewable energy producers' revenue will be lower than it otherwise would have been and has any modelling been done on the quantum of any such reduction? What is the estimated cost to the Commonwealth of the planned subsidy to coalmine operators and coal-fired electricity producers? Are there any limits on the rate per tonne of this subsidy or on the total amount of the subsidy? Will the Commonwealth fund this subsidy, or these subsidies, out of an existing appropriation or will it require a supplementary appropriation?

Finally, in the interests of moving along, I move the second reading amendment on sheet 1792 that has been circulated in my name which calls on this Senate to reject all new fossil fuel subsidies. I move:

At the end of the motion, add ", but the Senate:

(a) notes that:

(i) while this legislation does not include any subsidies to coal corporations, there have been media reports that more than $500 million of coal subsidies are currently under consideration from the Commonwealth and New South Wales Governments, and

(ii) due to the global energy crisis, major coal producers are making billions in windfall profits; and

(b) calls on the Government to reject all new fossil fuel subsidies".

2:57 pm

Photo of Anne RustonAnne Ruston (SA, Liberal Party, Shadow Minister for Health and Aged Care) Share this | | Hansard source

This is just another con by the Labor Party. Today the Labor Party, with their stablemates the Greens, are intending to legislate a lie. The Treasury Laws Amendment (Energy Price Relief Plan) Bill 2022 will not see power prices going down. We know that power prices are only going to go up. Those opposite know that power prices are going up, but they're still prepared to mislead Australians. The opposition have always said we would not stand in the way of constructive, sensible cost-of-living relief to Australians, but this bill does not deliver that.

Today we're going to see this bill shoved through this place because those opposite simply do not know the answers to the questions that they would have been asked had we been able to have an appropriate length of time to prosecute all of the very substantial issues that sit behind this bill. Instead, they haven't come in here and answered questions about who is going to be eligible for the payment, how much they will be eligible for, what small businesses will be able to get access to, who's going to miss out when demand exceeds supply and whose power is going to be cut off. Where's the modelling to show that energy prices are actually going to go down? Clearly, there isn't any, because we know they are going up.

Most importantly, we would like to know from the government opposite and their colleagues the Greens: What are you going to say to the Australian public when your disastrous interventions into the gas market mean that prices go up and Australians' power bills go up at the same time? Most concerningly, what are you going to say to Australians when the lights go out?

The contempt for this parliament shown by those opposite meant we didn't get the legislation in its final form until 8.45 last night. How on earth is anybody supposed to prosecute the details of legislation in that time frame? They've had six months to deliver an energy policy. What they've done at the eleventh hour is recall the parliament, at great expense to taxpayers. That includes flying people in from overseas. I'd like to know who's footing the bill for them flying in those of their colleagues who are overseas.

Photo of Ross CadellRoss Cadell (NSW, National Party) Share this | | Hansard source

And the carbon credits—the offsets.

Photo of Anne RustonAnne Ruston (SA, Liberal Party, Shadow Minister for Health and Aged Care) Share this | | Hansard source

And the carbon offsets as well! The complete contempt of those opposite for the institutions of government is eye-watering.

Today I also draw to the attention of the chamber that this is a pattern of behaviour that we have seen from those opposite in much of the stuff they've put through this place. They're all announcement and no substance. We've had piece after piece of legislation pushed through this place with: 'Don't worry about the details; we'll show them to you later. Don't worry about the detail; we've got it all covered.' Once again today we are having a bill pushed through here when there is absolutely no detail about something that potentially could have catastrophic effects on Australia and Australians. We know that around the rest of the world these sorts of interventions have never worked in the past. Why those opposite think they're going to work today is anybody's guess.

Photo of Ross CadellRoss Cadell (NSW, National Party) Share this | | Hansard source

They know they won't.

Photo of Anne RustonAnne Ruston (SA, Liberal Party, Shadow Minister for Health and Aged Care) Share this | | Hansard source

They know they definitely won't work, and that is why they're seeking to push this piece of legislation through without the appropriate scrutiny. So many on our side of the parliament would have loved the opportunity to speak on this legislation, but, in the interests of getting it into committee—so you actually have to answer some questions, albeit in a very truncated form—they are not able to.

In saying this is a really dangerous and concerning habit that we're seeing from those opposite, I foreshadow that I will be moving a second reading amendment, Madam Acting Deputy President, in relation to the decision earlier this week by the Minister for Health and Aged Care to slash Medicare subsidised mental health support for the most vulnerable Australians. The government has prioritised pushing this piece of legislation through this place over support for Australians battling with mental ill health. One would suggest, the way things are going, that they prioritise their budget and their own ideological beliefs over the mental health of Australians. Once again, in true Labor style, they are ignoring the advice of experts—stakeholders like Dr Michael Carr-Gregg, who is calling on the health minister to resign. The Institute of Clinical Psychologists, the Australian Psychological Society, Suicide Prevention Australia, the Australian Association of Psychologists and even their own backbench are saying this is a bad decision.

As we come into Christmas, when people, particularly lonely people, often find it toughest, with COVID still rampaging on our doorstep and the cost of living going through the roof, this piece of legislation is only going to make things worse. In my home town in the Riverland we are currently enduring a creeping flood that is likely to seriously impact many livelihoods over the summer period. Right at a time when Australians need the mental health supports provided by these additional, Medicare subsidised psychology sessions, those opposite are ripping them out, and they're ripping them out even when the advice of their own report is that they be kept in.

Once again, those opposite have a track record in legislation and policy development where there's no detail; it's just: 'Let's not worry about having scrutiny of anything that we do. We do not care about the advice of the experts.' Instead, they just ram legislation through here and worry about the consequences of what they're doing later. Well, I can say that Australians will be worrying about the decisions being forced through this place today for many, many years to come. I look forward to those opposite having to look Australians in the face when their power bills go through the roof and their power gets cut off and having to accept the consequences of this disgusting legislation.

3:03 pm

Photo of Ralph BabetRalph Babet (Victoria, United Australia Party) Share this | | Hansard source

What are the most terrifying words in the English language? I'll tell you: 'I'm from the government and I'm here to help.' They're terrifying, as President Reagan once said. He could easily have been speaking about the Labor Party's plan to cap energy prices, as well as all the other increased regulation they want to implement in the sector. This is a government solution almost guaranteed to worsen the very problem it purports to solve, as was observed in the sixties and seventies with the fuel price caps. I don't know if anyone recalls that—you are all a bit too young in here—but, if you do, there you go.

The United Australia Party, of course, stands with consumers and business owners who are bearing the brunt of skyrocketing energy prices and, of course, we want to see prices come down. We wholeheartedly support the $1.5 billion of temporary bill relief measures for those in need but we do not support the price caps or any increased regulations in the sector.

High energy prices are not simply the result of a war on the other side of this planet, like the Labor Party would have us believe. They are a product of self-inflicted, systematic deterioration of our energy sector over many, many years. It is actually hard to see how the Labor Party's naive market intervention will make any real-world difference whatsoever. The government's proposal has already created enormous uncertainty in the market, as we all know. It will almost certainly cause energy investment to constrict, which will limit gas supply even further, making energy shortages more likely to occur. For what exactly? Prices are still predicted to rise in the next two years, by the government's own account, by many, many hundreds of dollars.

The long-term solution, and there is a long-term solution, to higher power prices is not more government intervention in the market. That's ridiculous. It is not billions of dollars in tax subsidies or anything else. The long-term solution to high energy prices is greater supply. It's basic high school economics. I learnt that in year 8. We must also get rid of red and green tape.

Photo of Paul ScarrPaul Scarr (Queensland, Liberal Party) Share this | | Hansard source

Hear, hear!

Photo of Ralph BabetRalph Babet (Victoria, United Australia Party) Share this | | Hansard source

Basic economics—thank you, Senator Scarr. We must allow the private sector to produce. We don't need more government intervention; we need less government intervention. The government, let's be honest, couldn't organise a beer in a brewery. That's what they couldn't do. It is very clear what is happening here. The government is determined not to use the coal and gas we have and the government is determined to stifle the opening of new coal and gas projects. In fact, there are 89 coal, oil and gas projects sitting in a construction pipeline—excuse the pun. These projects have either been publicly announced or they are in the feasibility stage and are worth around $274 billion to the national economy. They would also create nearly half a million jobs and provide decades of secure energy supplies.

But the government are determined not to use the coal we have or the gas. They are determined not to open up gas fields. And if that's their plan, if that's their vision, then the only way to lower energy prices in the long term is to add nuclear power to the mix. The United Australia Party does not accept the flippant responses of government ministers whenever the suggestion of nuclear power is raised that, 'Oh, it's too hard,' or 'It's too expensive,' or 'It's too difficult.' That is what we are told. Well, it is not too hard. There is a middle ground, a place where different ideas meet and the Australian people benefit. What is too hard, though, is watching the average Australian suffer under massive cost-of-living pressure and skyrocketing energy bills while a very real, tried, tested, safe and proven solution is staring at us right in the face.

Australian consumers, Australian businesses, Australian manufacturers deserve reliable, abundant and cheap energy. Without cheap energy, we will see a decrease in our standard of living. That is just a fact. It will happen. Irrespective of whether or not this bill passes today, and we all know it is likely to pass, the United Australia Party asks the government to initiate a genuine study on the costs and benefits of nuclear power. It should analyse emissions, the cost to users and the cost to government.

The Labor Party's 12-month price cap mechanism is a short-term cure that will be worse than the disease. We need a permanent solution to keep prices down. The UAP took a nuclear policy to the election because we're committed to the long-term future of our country. The time for an honest debate on nuclear power is now. We need to plan for stable power prices into our future without the need for repeated emergency relief measures.

3:10 pm

Photo of Bridget McKenzieBridget McKenzie (Victoria, National Party, Shadow Minister for Infrastructure, Transport and Regional Development) Share this | | Hansard source

I rise to speak against the Treasury Laws Amendment (Energy Price Relief Plan) Bill 2022. It's never the lie that's the problem; it's always the cover-up. And this legislation is the cover-up for the embarrassment of the 97 untruths that Prime Minister Anthony Albanese spoke during the election campaign when he promised to reduce Australians' power bills. This bill will not reduce Australians' power bills—not before Christmas, not next year, not the year after that. It's not an ideologue saying that; it is just a fact.

This bill has much greater significance for our nation than a political stitch-up to hide the litany of lies told to the Australian people. History and economics tell us that controlling prices doesn't work. It sounds good; it actually doesn't work. The most notable in recent times was the attempt to set a floor price for wool in the eighties. When the floor price failed and was abandoned, the Australian industry was left with a stockpile of between four billion and six billion bales of wool and a debt of $2.7 billion. This was back in the days when $2.7 billion was a lot of money.

History is littered with examples. According to 'The Edict of Diocletian: A Study of Price Fixing in the Roman Empire', in the latter part of the Roman Empire a price cap on gold contributed to massive currency devaluation and inflation and a collapse of the economy. In the 1970s President Nixon announced price controls on gasoline. This resulted in a sustained national shortage and rationing. Economic history tells us that price controls dampen investment and growth, create unintended distortions, worsen poverty outcomes and cause countries to incur heavy fiscal burdens. Wiser heads in this country—the experts who have already been mentioned—are waking up to this.

News Limited commentator Terry McCrann says the cap on coal and gas 'shows zero understanding of how the electricity market actually works and even less understanding of reality'. He goes on to say:

Nowhere in this multi-billion dollar package is there the slightest effort to increase supply.

Worse, so mindbogglingly ineptly worse, the package is actually 'designed' to encourage less supply, while at the same time aiming to boost demand.

Whether you're talking eggs, milk or electricity, decreasing supply whilst increasing demand will increase price. The Australian's Henry Ergas says the legislation gives the government 'unfettered discretion to set any gas price it chooses'. In the AFR today was my favourite headline of the week: 'Labor's true spots are now on show'. The article began:

While Anthony Albanese tried to present a probusiness face to the Australian people before the federal election, eight months after coming to office, Labor's true spots are now on show. First, there was the retro industry-wide pattern bargaining workplace shake-up …

The writer goes on to say that, now they're trying to ram through the electricity bill, this is 'Labor reverting to its worst anti-business, pro-regulation, big government instincts'.

This is hardly the mantle of Hawke that the Prime Minister tried to tell us he was after.

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Minister for Foreign Affairs) Share this | | Hansard source

More like Whitlam.

Photo of Bridget McKenzieBridget McKenzie (Victoria, National Party, Shadow Minister for Infrastructure, Transport and Regional Development) Share this | | Hansard source

A lot more like Whitlam's—thank you, Senator Canavan; you saw that one coming. First, this bill gives the Labor government unprecedented, unchecked and dangerous powers to interfere and intervene in energy markets long beyond the 12 months nominated by this bill. That means that, when it doesn't work—because it won't—Labor will double down and intervene even further. Wait for it. That is what is going to happen. This will further damage and smash our international reputation as a suitable and safe place to invest due to the stability and predictability of the laws of commerce that this country is supposed to run by. Instead, contracts will be torn up, agreements reneged on and confidence in government shattered.

Secondly, this bill is a repudiation of our entire economic system, and after hearing Senator McKim's contribution we know why. You know what? He reckons socialism is all right. He said it here. The left wing of the Labor Party is in charge of this government and is teaming up with the socialists from the Greens, and we have a bill before us that is going to wreak havoc and is a complete repudiation of our economic system, of free market policies, the laws of physics—how you generate electricity and how you distribute it—the rule of law and the laws of economics.

The fall of communism, a political system that actually does reject all of those things, has resulted in an expansion of wealth around the world. You don't like to hear it, but the very economic model you deride and seek to dismantle is the very economic model that has lifted millions of people around the world out of poverty. It has made sure that my kids had a much better economic life than I did and my parents before me did. For decades we have seen whole communities lifted out of poverty and our living standard increase. It's doubling concerning when you hear that their other mates the ACTU can't wait to dismantle the Productivity Commission. I read that today. Why? I see you laughing, Senator Cash. I know it's shocking. It's because the Productivity Commission adopts failed models of economics, the very models of economics that mean Australians are wealthier now than they have ever been. That is a fact.

Having negotiated a mandatory code on prices in the dairy industry as a minister, I can tell you the No. 1 thing you don't try and do is do it without consulting industry, because what's good for the Queensland dairy industry may not be great for the Victorian dairy industry, which is more export focused. If you're going to get a mandatory code of conduct right, consult industry. Guess what. It's pretty hard to do when you only finished drafting the legislation last night and only got it off to the opposition at 8.47 last night, and today you have absolutely shown your disrespect for any scrutiny of that legislation and its unintended consequences.

Instead of negotiating with industry, this Labor government has done a deal entirely with its mates the Greens and Senator David Pocock—socialists one and all—who, I'm advised, didn't even see the legislation, they were so desperate to do the deal. Bandt couldn't wait to sign up. So you're going to have Bowen and Bandt rocking up at your door, spanners in hand: 'Let me take out your cooktop—

and your gas barbecue.' There goes the barbecue. If you've got a gas bottle in the shed because you like to go camping on the weekends, they're going to take that away as well. They could not wait, so desperate were they to clinch a deal and be relevant.

Labor never learns. It always returns to the big-government, interventionist, Whitlam model. How similar is this situation to the Whitlam government's attempt in 1973 to change our Constitution to give the Commonwealth powers over price and income? It went to a referendum. Guess what the Australian people said: 'You know what, boss? No thanks.' It was the lowest yes vote in history and failed in each and every state. When you bother to go to Australians and ask, 'Do you want government fixing the prices of everything,' Australians say, No, thanks.' But they haven't done that and they haven't given the people's representatives to scrutinise it. Henry Ergas warns today that the bill will get us to where Whitlam wanted us by stealth.

The late and great Doug Anthony said on 16 May 1973, in speaking to the Whitlam government's Prices Justification Bill, which forced large businesses to justify their prices and price rises:

It is economic madness for the Government to attempt to remove the legal obstacles to industrial anarchy while at the same time calling for price restraint. It is economic madness to expect an unco-ordinated and hastily erected maze of price restraint devices to alter the basic realities of the present inflation problem in Australia.

Doug Anthony could have been talking about the Albanese Labor government in 2022, with its industrial legislation opening the door to greater industrial disputation and now draconian controls on energy producers. He promised to be Hawke, but he's actually going to be Whitlam.

I just want to finally quote Ergas:

This much, however, is certain: the psalmist's warning, "put not your trust in princes", remains every bit as relevant today as it was when the electorate knocked back Whitlam's grab for power. If parliament understood that, Australia would be a better, safer and more prosperous place.

This is simply nothing more than institutional gaslighting by the Albanese government, manipulating the people to question rational, reasonable laws of economics and physics. If history is any teacher, this will be catastrophic for our country. Shame on the Australian Labor Party, the socialist Greens and David Pocock for doing this!

3:21 pm

Photo of Dorinda CoxDorinda Cox (WA, Australian Greens) Share this | | Hansard source

I rise to contribute to the debate on the Treasury Laws Amendment (Energy Price Relief Plan) Bill 2022 as the Greens spokesperson for resources. Whilst the Greens are supporting this bill, we do so knowing that it can be better. Having a secured and very important package will help households and businesses transition away from dirty gas, because we know gas is as dirty as coal and needs to stay in the ground. I'm glad that Senator McKenzie mentioned gaslighting, because that's what the Australian public have been listening to for the last decade: this gaslighting relationship around how great it is and how it should be drilled and taken out of the ground.

This bill will provide some relief, yes, but what it won't do is bring down the prices in a meaningful way, because it doesn't address the core issue, and that is not supply. That's the gaslighting that the opposition would like to have us believe. The core issue is actually a lack of a concrete and funded plan to transition away from dirty and expensive gas to clean, green renewable energy, which is actually the cheapest form of energy in Australia. Whilst a price cap and a mandatory code of conduct for the gas industry are welcomed in the short term, the long-term solution is in fact renewable energy. It's not the 114 new coal and gas projects currently in the pipeline, and it's not the $42 billion in subsidies that this government is handing out to the fossil fuel companies on a silver platter rather than actually investing in renewable energy. It's supporting households and businesses to upgrade their appliances and transition to renewables; it's political donation reform, like my colleague Senator Waters talked about both today and in the last sitting; and it's establishing a national transition authority, which is the bill that my colleague Senator Allman-Payne has introduced. The Greens know that there are long-term solutions, and we are fighting for them.

But, as always, it is the major parties that are lagging behind time and time again and dragging this country down with them. We've seen a decade of denial and now we're seeing more delay. Privatisation has failed to deliver cheaper energy in this country. What privatisation has done has been to allow companies to make billions of dollars in profit, which they're not paying any tax on and which they're giving their executives big bonuses with. Electricity is an essential service. It's something that is an inherent part of day-to-day living now and something that's so important that it should not be in the hands of capitalist interests in this country. These companies only have one thing in mind, and that's to make money. In many circumstances, but especially this one, the public good must come first, before corporate profits—the gluttony and greed of gas companies in this country, as we've heard from Minister Husic.

The Victorian government promised to build publicly owned renewables and revive the State Electricity Commission of Victoria. The South Australian government is flirting with the idea of reversing some of the privatisation of South Australia's power assets. Western Australia is the only state which has kept its electricity assets under government ownership. I make it no secret I have my issues with the WA government, but this is one area where they've made the right call, despite the fact that this is only one aspect of energy generation and a lot of the supply chain is still privately owned.

Public ownership can go one step further in ensuring that First Nations people own assets as well on their country. Don't forget when you stand in this chamber every morning that this is stolen land. Here in the parliament, wherever you go in this country, this land was stolen, and that's the truth. The land on which these energy companies have their assets on is stolen. The resources that they dig up and drill for are stolen. The wealth that these companies have made is stolen wealth. That you can't get away from. It belongs to us. It belongs to the First Nations people across this country.

We get an absolute pittance of what is made on the spot market and in other places selling this and it being exported overseas. That's why we still have disparity of wealth in this country, because we're not being given a fair go. As we transition away from dirty fossil fuels, mining communities, which the Nationals love to talk about, need to be supported through a national transition authority. First Nations communities also need to benefit in that because there's a disparity of wealth—open your eyes and have a look around your regional towns—in those country towns as well. Federal, state and territory governments have to commit to having First Nations owned renewable assets. This is a key to respecting our sovereignty in this country.

Giant fossil fuel companies have been getting off light with their behaviour across the supply chain. At one end we saw heartbreaking destruction by Rio Tinto of the Juukan Gorge, the sacred place that held thousands of years of cultural heritage. Frankly, it's an embarrassing lack of consultation by Santos in the recently upheld Tiwi Islands case of the Barossa gas field. Recently the government handed down its response to the Juukan inquiry, and we look forward to working with the government in implementing these recommendations. On the other end, we see companies making record-breaking profits. They have significant power imbalances when they enter our communities, and they have price hikes that are not controlled.

Whilst this code of conduct mainly applies to the wholesale market at the end of the supply chain, it will also have implications for domestic production at the start of the supply chain. The determination of Barossa is integral as part of this yarn, part of this story. It's something that I promise you I will keep talking about in this chamber: free, prior and informed consent from gas companies. It is something that I will keep talking about in relation to the approval of environmental plans and the destruction of cultural heritage.

It's all part of balancing the ledger, Senator Scarr. We understand and indeed hope that this code of conduct will be wide reaching in reining in some of these giant, tax-dodging, greedy corporations, but ultimately we over here at the Australian Greens know that the true solution is to stop propping up this industry and to transition away from dirty coal and gas. The time to do this is today and now. Thank you.

3:28 pm

Photo of Tammy TyrrellTammy Tyrrell (Tasmania, Jacqui Lambie Network) Share this | | Hansard source

If you were listening to the Liberals, the Treasury Laws Amendment (Energy Price Relief Plan) Bill 2022 is about shutting down the gas industry; it's about turning down jobs and turning down investment; this bill is economic vandalism. If you were to listen to the Labor Party, this bill is about ushering in a new clean energy revolution; it's the start of a bright, new day where everybody's bills are cheap, everyone's energy is clean and everyone's conscience is clear. In reality, it's neither of those.

I'll support it all the same because it's going to make it possible for people to feel less pain when they come to paying their bills. I say it makes it possible, because it can't be guaranteed, because this piece of legislation does not guarantee anything. It's half done. How will people get their bills subsidised? That's still to be determined. Which small businesses will get help with their bills? That's still to be determined. What's the definition of small business? That's still to be determined as well. How much money is every eligible household going to receive? To be determined.

Actually most of this bill isn't even a bill; it's just a shell designed to be filled in later, when we've got more information. What is in this bill is pretty slim. There's a $1.5 billion compensation fund from the Commonwealth which will go to subsidies for people's bills if they're on a payment like family tax benefit, JobSeeker or the DSP. But people are on payments, not households, and people in households don't have individual bills. You don't get billed separately if you've got the one connection, so what happens if one person in the house is on a pension and the rest of the household aren't? If the bill isn't in the name of the pensioner but they help pay the bills, do they get help? To be determined.

Everything here is to be determined. What's strange about it is that the one bit that the government are fixed on is the amount of compensation they're prepared to put on the table to help households—that is, $1.5 billion, matched by each of the states and territories. It's not $1.6 billion or $1.4 billion. It's $1.5 billion. That's the right amount apparently. A dollar more would be irresponsible. A dollar less would be cruel. We're never told why this amount is right, how the Commonwealth landed on this figure. Is it sufficient? Is there anything that suggests it meets the scale of the problem we're facing? If there is, we aren't being shown it. And while that amount is capped, it's not the only compensation that the Commonwealth will be on the hook to pay because of this bill.

Coal-fired power stations don't look like they're going to be compensated too. The cap on prices means that they're not allowed to pass on costs more than $125 per tonne of coal they burn. Some of them are paying more than that for the coal. Anyone paying more for their ingredients than what they're selling their product for won't be in business very long, so it's reasonable that there is compensation. I don't mind that. It's the only way to guarantee that these generators are going to keep generating, which is what we're really needing them to do. But what I don't understand is why nobody can tell us how much compensation they're going to be paid. I'm not against them being paid, but I don't like being asked to vote for something where the price tag comes once you agree to buy it. It's a subsidy no matter what the Greens or Labor Party say. It's a subsidy going to fossil-fuel generators. This bill won't write the cheque. What is does is make the promise that the cheque is in the mail. So why can't we know how much we're going to be on the hook for?

These coal generators are on long-term contracts. The government know what they're on. They know how much they're generating. Why isn't the coal compensation going to be capped like the compensation to households and small businesses? Why is there a cap on one and not the other? Nobody can tell us. Why are we being kept in the dark?

This isn't the only thing we're in the dark about either. In fact, we didn't see the bill until today. We were asked to come to Canberra with no notice to vote on a bill with no text. These are all reasons why this bill is pretty ordinary, and why this process is pretty sloppy, and yet Senator Lambie and I support it because we know the price that will be paid if we do nothing—and we know who will pay it.

Earlier this week I went to Murray Bridge in South Australia with some of my fellow senators. We were there for the Community Affairs References Committee inquiry into poverty in Australia. We heard firsthand from people living in poverty right now. We heard from those organisations that are helping them. Foodbank SA told us that in Murray Bridge there was a 21 per cent increase in people walking through the door in the last year. We also heard that rents went up by a couple of hundred dollars in the last year. People's wages aren't going up by the same amount, so people are having to cut back. People are showering once a week because they can't afford to pay their bills. The soaring cost of living means people are making difficult decisions about how to feed their children. People are making decisions about which meals they will be skipping, and they're living in their cars. They're not filling scripts for lifesaving medication. Some can't even afford Panadol.

We've heard stories like this for months now. People are struggling now. They have bills they can't afford now. I think about them and I think about what a 30 per cent increase in their bills next year means for them. I think about what they're supposed to cut to pay for that. I honestly do not know what we expect them to go without. What can they spare to lose? What do they have that we think is 'too much'? Murray Bridge is not unique. Poverty doesn't exist in a little bubble an hour's drive from Adelaide. People across Australia are finding it harder and harder to make ends meet.

We know the bill has flaws. It's incomplete. It's been rushed. It's not an ideal situation we are in right now. But, at the end of the day, Senator Lambie and I won't stand in the way of making life just that little bit easier for people who are doing it really tough right now. What I know is that, if you are struggling, every little bit counts. This bill isn't going to give enough relief from the rising energy costs, but it's something. We can't let the perfect be the enemy of the good, and that's why I am supporting this bill.

3:35 pm

Photo of Mehreen FaruqiMehreen Faruqi (NSW, Australian Greens) Share this | | Hansard source

I rise to speak on the Treasury Laws Amendment (Energy Price Relief Plan) Bill 2022. The Greens recognise that cost-of-living relief is so desperately needed, and that's why we are supporting this bill. Unfortunately, though, despite the fuss and despite the dramatic resummoning of parliament, under Labor's plan, energy bills will still keep rising, albeit a little bit less than they would have otherwise. The government's own numbers illustrate that their plan is an inadequate solution. Without the plan, Treasury had forecast electricity bills would rise in the next financial year by 36 per cent. As a result of the legislation we are debating today, the increase next year will still be 23 per cent and there will be a combined increase of 47 per cent over the next two years. So of course this scheme, this plan, this legislation is not enough, and there is much, much more to do.

This legislation did, though, present the government with a really good opportunity to freeze power bills which at the moment they have missed. The government should really listen to the Greens and freeze power bills for two years. We will keep pushing for this freeze so people can have much more meaningful cost-of-living relief.

To provide further and more long-term cost-of-living relief and to move away from dirty and expensive gas, the Greens have secured a substantial package with the government that will help households and businesses to switch from gas to cleaner and cheaper energy. As part of this package, the government will focus on low- and middle-income earners, renters and those in public housing. This is definitely a win for households and also a win for the climate, and it is a big blow for greedy gas corporations.

I want to be crystal clear that we will not support a single cent of so-called compensation for coal corporations. Coal and gas corporations should in fact be compensating us for the massive climate damage that they have done which is cooking the planet, not the other way around. Governments should not be propping up coal and gas with public money. We should be ending it. Projects like the Pilliga Narrabri gas project in New South Wales and the Beetaloo basin project in the Northern Territory are climate crimes just waiting to happen. They must be scrapped. They destroy sovereign lands and forests while polluting water and air.

The Labor government really needs to show the leadership and courage that is needed to deliver the big, bold solutions that this energy price crisis demands. The reality is this: this isn't a short-term dilemma sparked by the war in Ukraine. This is a crisis caused by neoliberal policy perpetuated by both the major parties at a state and federal level over the past 30 years and fuelled by the greed of profit bloated, morally bankrupt fossil fuel corporations. Major parties take dirty donations and then give these corporations criminally cheap access to publicly owned resources. Some of these corporations pay no royalties or tax and then they get billions in subsidies handed to them on a platter. Meanwhile, these corporations, whose business model has been to fuel climate change denialism, purchase favourable government policy and profit off climate catastrophe, have been raking in record profits. Research shows that the gas sector has accrued a staggering $26 billion in profit due to price rises fuelled by the Ukraine war. That is absolutely disgraceful.

What we need urgently is a windfall profit tax to rein these corporations in. This should not be controversial. Even the Conservative UK government has introduced a windfall tax to fund cost-of-living relief, so what's stopping our allegedly progressive Labor government from—

Photo of Matthew CanavanMatthew Canavan (Queensland, Liberal National Party) Share this | | Hansard source

You just want to profit from a war!

Photo of Catryna BilykCatryna Bilyk (Tasmania, Australian Labor Party) Share this | | Hansard source

Senator Faruqi, can you resume your seat for a minute. Senator Canavan, interruptions are disorderly. Please listen quietly.

Photo of Mehreen FaruqiMehreen Faruqi (NSW, Australian Greens) Share this | | Hansard source

A windfall profit tax should not be controversial. Even the Conservative UK government has introduced a windfall tax to fund cost-of-living relief, so what's stopping our allegedly progressive Labor government from doing what Nobel Prize winning economist Joseph Stiglitz has called a no-brainer? It is a no-brainer.

This government, like the last one, is beholden to fossil fuel and energy companies. It should be the other way around. Privatisation of our electricity and energy grid has been disastrous not just for affordability but for the pace of the clean-energy transition. We must bring our resources and energy assets back into public hands. Essential services, whether they be education, health or energy, should never be run for profit, and private companies should never have the power to hold us to ransom like they have.

Coal and gas corporations exist for one thing: making profit from environmental exploitation and destruction. Their greed and appetite for resources is insatiable. They are killing the planet. The solution isn't treating these corporations as good-faith players who deserve compensation; the solution is recognising that they have long ago forfeited their social licence to exist at all. So, yes, the Greens will leave no stone unturned to end coal and gas so that our planet and all who live on it actually can have a future.

3:42 pm

Photo of Matthew CanavanMatthew Canavan (Queensland, Liberal National Party) Share this | | Hansard source

I want to make a brief contribution on, really, the state of the chamber today. It's my observation that the Labor Party have been very subdued today. The Prime Minister has said that he is stunned that we are here and fighting for the Australian people. He thought he'd come here with his tired and simplistic politics and just have the whole chamber roll over. Well, I've got a message for the Labor Party today: we're going to fight. We're going to fight for the Australian people. We're going to fight for Australian jobs that rely on our great resources industry. We're going to fight to make sure we maintain our reputation as a country that can be relied on, as a country you can come here and do business with without having this kind of abuse of parliamentary process, which shatters all certainty for businesses.

I understand the Labor Party is shocked today that we would do this—that we would actually have the steel to stand behind our convictions. Perhaps, over the past couple of decades, or ever since the Howard government, that hasn't happened here in Canberra enough. But this is a new opposition in this chamber today, and we will keep fighting for it.

As much as the Labor Party have escaped scrutiny today through this shocking gag—3½ hours of consideration of some of the most major changes to our economic policies in decades—I've got a message. It's not going to succeed in the months ahead. We're going to have estimates, even though you tried to get rid of those. We're going to have inquiries. We're going to follow you every step of the way. From right now, every price rise is on your head. Every blackout is on your head. Every family that will struggle to pay their bills will be because of the mess you are creating here today. We will not cease and rest until we get justice for the Australian people and make sure we restore our reputation as a country that can be relied upon for sensible economic policymaking.

3:44 pm

Photo of Katy GallagherKaty Gallagher (ACT, Australian Labor Party, Minister for the Public Service) Share this | | Hansard source

I thank the Senate for contributions. I will respond to Senator Canavan. We have assisted the chamber by not having speakers from the government side to allow—

Photo of Paul ScarrPaul Scarr (Queensland, Liberal Party) Share this | | Hansard source

Oh, thank you!

Photo of Matthew CanavanMatthew Canavan (Queensland, Liberal National Party) Share this | | Hansard source

How gracious!

Photo of Katy GallagherKaty Gallagher (ACT, Australian Labor Party, Minister for the Public Service) Share this | | Hansard source

I listened to everyone else in silence—to allow other senators, including those opposite, to make a contribution on this bill, and it's those opposite who chose to chew up the first half an hour without actually dealing with the bill.

If I can, I will say that this bill is designed specifically to alleviate pressure on households, to stand up for jobs, to stand up for industry and to stand up for manufacturing. There's been a very select use of industry comments in the contributions from those opposite, and I could take the full 15 minutes to read out the quotes and examples from businesses, small and large, in this country who are going to the wall because of the gas prices and energy prices—the lost or threatened jobs and the businesses that have lasted for 50 years and are now being hammered. Those opposite want to ignore all that—'No, no problem with that at all—absolutely no problem with the price of gas at the moment and what we've seen over the last six months.'

Photo of Sue LinesSue Lines (President) Share this | | Hansard source

Sorry, Minister. Can you just resume your seat. Senator Scarr, I have already asked you to at least lower your voice, although all interjections are disorderly. So if you could—thank you. And, Senator Canavan, you as well. Interjections are disorderly. If the minister could just continue her contribution in silence, I would appreciate it.

Photo of Katy GallagherKaty Gallagher (ACT, Australian Labor Party, Minister for the Public Service) Share this | | Hansard source

Senator Canavan also mentioned price increases. Well, 20 per cent, the increases that we have factored in already that are hitting households and businesses now, are the increases that happened on your watch, and that is absolutely the truth and the fact. Everyone understands it. Ten years of failed energy policies, delay, dysfunction and inability to land an energy policy saw us inherit an energy system in crisis. Yes, it was impacted by the illegal invasion of Ukraine by Russia, but there was also the fact that our energy system wasn't resilient or robust enough to deal with the transition that is occurring worldwide in the economy.

We are standing up for our national economic interests, absolutely. We understand that some of the companies are unhappy with the measures that are outlined in this bill, but they have different responsibilities to ours. We have a responsibility as a government to deal with the situation that has been unfolding over the last six months; to look at the impact on jobs, on small business, on large business, on our big manufacturers and on households; and to look at what's happening in the states and territories and the pressures that they are under. That is our job, and part of what we're doing works alongside the Powering Australia plan which we took to the last election and which those opposite think is such a joke. Well, it's not a joke. It is an orderly transition to the biggest economic transformation that is occurring, and you want to put your head in the sand and pretend that it's not happening and that a shift to renewables, the cheapest form of energy available, shouldn't happen. That is your approach. It's not the approach of the government.

I am not going to take up all of my time, although I am tempted, because I do want to deal with some of the issues that have been raised. I would like to thank senators—on the eve of Christmas, almost—for coming back and dealing with this bill. I tried to acknowledge that at the beginning. I would also like to thank senators who have contributed to the debate.

The bill contains measures which will contribute to stabilising gas prices in times of significant volatility in global energy markets. Without any intervention, retail gas prices are expected to increase by 20 per cent in 2023-24 and retail electricity prices are expected to increase by 36 per cent in 2023-24. High wholesale gas prices impact industrial and commercial customers' viability and result in households ultimately paying higher prices for electricity, gas and goods. The government is committed to ensuring Australian consumers and businesses have access to an adequate supply of gas at reasonable prices.

Schedule 1 of the bill will amend the Competition and Consumer Act 2010, providing an enabling framework to facilitate a gas market code to address systemic issues in the market, including a reasonable-price provision and an emergency cap on wholesale gas prices for 12 months.

Schedule 2 to the bill will amend the Federal Financial Relations Act 2009 to introduce a new type of payment to the states and territories to support temporary and targeted relief on energy bills for eligible households and small businesses. It will provide an appropriation of $1.5 billion to be paid as financial assistance to the states and territories, who will jointly fund the relief and administer the payments under a new funding agreement.

The inclusion of a reasonable pricing provision in the gas market code is to provide a basis for producers and buyers to negotiate domestic wholesale gas contracts at reasonable prices. The temporary emergency price cap is intended to ensure domestic industry remains viable and to limit energy price rises for households and businesses. The government intends the cap to be set at a level that reflects the cost of production and which preserves a reasonable rate of return on investment. The impact of these measures is to lower wholesale electricity prices by 30 per cent in 2023-24. This will bring down power costs for businesses and families across Australia compared to what they would have been otherwise, without our package of measures.

The government has conducted modelling to determine the impact of our policy. However—and this relates to some questions Senator McKim asked—modelling that delivers impacts on the revenue of projects by technology has not been conducted, not least because project revenues are also impacted by the contracts projects have signed, including power-purchasing agreements, which are common for the renewable energy projects in particular.

The fact is that our policies will not undermine or change the fundamental economics of investment decisions. These policies will not change the fact that firmed renewable energy is the cheapest form of energy and presents the most attractive investment for investors. The Energy Price Relief Plan, of which this bill is a part, is designed to mitigate the impact of Russia's illegal war on Ukraine on Australian energy prices. After this intervention, we will continue to see the transformation of our energy system to more renewable energies, just as we saw before the Russian invasion.

Of course, the main difference between the situation for renewable energy after our package is implemented, and before Russia's horrific war, is the fact that now, unlike pre-February 2022, we have a Commonwealth government committed to working with states and supporting renewable investment, including by modernising our electricity transmission network through Rewiring the Nation, as well as the recently agreed Capacity Investment Scheme, which will deliver $10 billion worth of investment in dispatchable, renewable and storage capacity.

The agreement struck with states at National Cabinet will see the states leading on the implementation of coal price ceilings in their jurisdiction. In particular, this affects New South Wales and Queensland. In order to implement a price ceiling for coal used in power generation to bring wholesale prices down, contracted coal will need to be addressed. We are working with the state governments on this issue, and it is still the subject of negotiations and further analysis. Negotiations on those funding arrangements are currently underway for each state and territory.

The answer to the questions from Senator McKim is that it is still too early to provide any further details of those negotiations. They are all ongoing. But, if further appropriations or financial assistance are required, then the appropriations would have to be dealt with using standard processes, either in the budget or in a special appropriation. None of those decisions have been taken at this point.

The fact remains that the faster we can deliver on our renewable energy potential, the lower power prices will be and the less we will be exposed to the volatility of coal and gas prices. That is the longer-term solution and the longer-term game plan, and there is no serious disagreement about that.

I would like to thank and acknowledge my colleagues on the government benches for agreeing not to participate in this debate. They stand strongly behind the bills that are presented to the Senate, but I appreciate their assistance in helping to facilitate this afternoon. I commend the bill.

Photo of Catryna BilykCatryna Bilyk (Tasmania, Australian Labor Party) Share this | | Hansard source

The question now is that the second reading amendment on sheet 1793, moved by Senator Duniam, be agreed to.

Question negatived.

3:54 pm

Photo of Jonathon DuniamJonathon Duniam (Tasmania, Liberal Party, Shadow Minister for Environment, Fisheries and Forestry) Share this | | Hansard source

by leave—Acting Deputy President, in lieu of calling in division, I would like to have the opposition's position supporting that recorded.

Photo of Larissa WatersLarissa Waters (Queensland, Australian Greens) Share this | | Hansard source

I move Australian Greens second reading amendment on sheet 1791:

At the end of the motion, add ", but the Senate:

(a) notes that:

(i) Australia's energy market is a mess, with big coal and gas companies making money hand over fist and consumers paying the price through skyrocketing energy bills, and

(ii) this mess is the inevitable consequence of decades of Labor and Liberal policies to privatise Australia's energy system and their failure to properly tax the earnings of the big coal and gas producers; and

(b) calls on the Government to:

(i) introduce a windfall tax on coal and gas companies,

(ii) use the funds to freeze household electricity bills for two years at the same rates as prior to the invasion of Ukraine in February 2022, and

(iii) raise the rate of income support payments above the poverty line".

Photo of Catryna BilykCatryna Bilyk (Tasmania, Australian Labor Party) Share this | | Hansard source

We're voting on the amendment on sheet 1791, moved by Senator Waters.

4:02 pm

Photo of Malcolm RobertsMalcolm Roberts (Queensland, Pauline Hanson's One Nation Party) Share this | | Hansard source

by leave—Acting Deputy President, I ask that my name be recorded as supporting Senator Duniam's second reading amendment.

Photo of Catryna BilykCatryna Bilyk (Tasmania, Australian Labor Party) Share this | | Hansard source

That is so done.

4:03 pm

Photo of Michaelia CashMichaelia Cash (WA, Liberal Party, Shadow Minister for Employment and Workplace Relations) Share this | | Hansard source

I move the second reading amendment on sheet 1789, as circulated in the chamber:

At the end of the motion, add ", and Schedule 1 of the bill be referred to the Economics Legislation Committee for inquiry and report by 7 February 2023".

Photo of Sue LinesSue Lines (President) Share this | | Hansard source

The question is that the second reading amendment on sheet 1789 moved by Senator Cash be agreed to.

4:07 pm

Photo of Sue LinesSue Lines (President) Share this | | Hansard source

Senators, I understand there are two further second reading amendments.

Photo of Anne RustonAnne Ruston (SA, Liberal Party, Shadow Minister for Health and Aged Care) Share this | | Hansard source

I move the second reading amendment on sheet 1788 standing in my name:

At the end of the motion, add ", but the Senate:

(a) notes that, the Government has prioritised this bill, at the same time it has halved the number of Medicare subsidised psychology sessions at a time when Australians are facing natural disasters, cost of living pressures and household energy bills are skyrocketing; and

(b) calls on the Government to reverse the cuts to these sessions until such time as Australians have adequate access to Medicare subsidised psychology sessions".

Photo of Sue LinesSue Lines (President) Share this | | Hansard source

The question is that the second reading amendment on sheet 1788 moved by Senator Ruston be agreed to.

Question agreed to.

4:08 pm

Photo of Katy GallagherKaty Gallagher (ACT, Australian Labor Party, Minister for the Public Service) Share this | | Hansard source

May the government record its opposition to that amendment?

Photo of Sue LinesSue Lines (President) Share this | | Hansard source

Yes, we will record the government's opposition.

Photo of Nick McKimNick McKim (Tasmania, Australian Greens) Share this | | Hansard source

I move the second reading amendment on sheet 1792 standing in my name:

At the end of the motion, add ", but the Senate:

(a) notes that:

(i) while this legislation does not include any subsidies to coal corporations, there have been media reports that more than $500 million of coal subsidies are currently under consideration from the Commonwealth and New South Wales Governments, and

(ii) due to the global energy crisis, major coal producers are making billions in windfall profits; and

(b) calls on the Government to reject all new fossil fuel subsidies".

4:10 pm

Photo of Sue LinesSue Lines (President) Share this | | Hansard source

The question is that the second reading amendment on sheet 1792 moved by Senator McKim be agreed to.

4:15 pm

Photo of Sue LinesSue Lines (President) Share this | | Hansard source

The question is that the second reading motion, as amended, be agreed to.