Chris Bowen (Prospect, Australian Labor Party, Shadow Assistant Treasurer) Share this | Hansard source

Labor will be supporting the Australian Energy Market Amendment (Gas Legislation) Bill 2006. I do not propose to detain the House for too long but will be briefly outlining the reasons for the opposition’s support. The legislation is the federal government’s part of the bargain in establishing the national framework to regulate access to gas pipelines. The national gas regime proposed in this bill was negotiated between the Commonwealth and the states and territories through the Ministerial Council on Energy. It is the latest stage in the implementation of the principles and the letter of competition policy to the gas industry. We believe it will have real benefits for consumers and provide certainty for the industry. It is certainly the case that we should have certainty wherever possible in these matters, and for this reason the Labor Party is happy to give this bill bipartisan support.

Cheryl Cartwright, the CEO of the Australian Pipeline Industry Association, said in the Australian Financial Review on 26 May last year:

Because investment in gas transmission is so long-term, investors need to have some certainty that regulators are not going to step in and change rules part way through.

As Cameron O’Reilly, the Executive Director of the Energy Retailers Association of Australia, said a few months after that on 29 September 2006:

Investment decisions for regulated business are long term, so achieving greater certainty is in the interests of all parties, especially owners.

Everyone is having to make guesses or judgements about where things are at and the hardest area to be in making those guesses is generation.

That is why the opposition indicates that it is happy to support this bill, so that the industry has an indication that it is the policy not only of the government of the day but also of the alternative government.

The proposed national regime will replace the current nine different regulatory regimes operating across the country. It is another step in implementing the Ministerial Council on Energy’s reform agenda, which will ultimately see a national gas law, NGL, and national gas rules. The regulatory framework will underpin the proposed national gas law due to be in place by 30 June 2007. Under this cooperative regime, state and territory laws will confer functions and powers to the Commonwealth minister and agencies, including the Australian Energy Regulator, the Australian Competition Tribunal and the National Competition Council. The bill ensures that the Australian Energy Regulator can perform the functions and powers conferred on it by the national gas Commonwealth law and regulations, as well as for the Australian Competition Tribunal, the National Competition Council and the Commonwealth minister. In addition, the Federal Court will be given jurisdiction to deal with matters arising under the new laws.

My attention was drawn to an article yesterday in the Australian Financial Review entitled ‘Gas regulation at flashpoint’, in which a number of commentators in the industry state their concern about the powers to be conferred on the Australian Energy Regulator, particularly the powers to investigate matters of competition. The article by Annabel Hepworth states:

But the industry fears the draconian nature of the draft laws will stymie gas network investment needed to meet the soaring demand for power and will increase compliance costs, which would be passed on to consumers in higher gas bills.

Industry—which hopes the proposals will be redrafted—and users have in recent weeks been having detailed discussions with government officials about the draft laws. Federal Industry Minister Ian Macfarlane yesterday told The Australian Financial Review that the talks had been “constructive” and that he had met separately with industry groups to discuss key concerns.

Obviously, that is an issue of concern to the industry; therefore, it is an issue of concern to the opposition. The opposition will be supporting this bill, but I encourage the minister or his representative to address these matters in summing up the debate because it is important that we encourage more investment in the gas pipeline industry and that we take no steps to discourage it. On balance, we will be supporting this bill because we are confident that it will be an encouragement to industry and not a discouragement, but the minister does need to address the matters raised by industry in that article.

The national gas law will include a form of regulation under which pipeline owners can negotiate commercial outcomes with access seekers, subject to competitive pressures. Only when these negotiations fail will the Australian Energy Regulator become involved and offer a binding arbitration to resolve the access dispute. The states and territories are to pass complementary laws to give effect to these changes, effectively transferring their power to regulate these matters to the Commonwealth. The regulatory framework proposed in the bill will operate alongside the new national gas law, which will be passed by each state and territory. South Australia will be taking the lead early this year through the National Gas (South Australia) Act 2007 and the other states will then follow.

I know that some in the industry have expressed concern that access under the national competition policy is a disincentive to investment and a disincentive to laying more pipes. I have not been convinced by these arguments. We would need to see evidence that this is the case in the gas industry. In matters of national access, a genuine balance needs to be reached. To ensure maximum competition, we need to get the balance between granting access to competitors and not providing a disincentive to investment.

While I am not convinced that this bill will be a disincentive to the laying of gas pipelines, we do need to get the balance right across the market generally. I am glad that the honourable member for Batman is here, because I know he also has strong views on this. We saw the recent—

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