Ian Macfarlane (Groom, Liberal Party, Shadow Minister for Trade) Share this | Hansard source

I am pleased to rise today to speak on the Australian Energy Market Amendment (Minor Amendments) Bill 2008, as it is a bill that was prepared by me in the previous government. Energy market reform is a key area in terms of not only future investment but also ensuring that the market provides confidence for those investments that will need to be made. This bill will make minor amendments to the existing Commonwealth legislation that underpins the national regime for the regulation of gas pipeline infrastructure. Specifically, the bill will amend the Australian Energy Market Act 2004, the Australian Energy Market Amendment (Gas Legislation) Act 2007, the Administrative Decisions (Judicial Review) Act 1977—the AD(JR) Act—and the Trade Practices Act 1974, or TPA, to correct the year of enactment of South Australian and Western Australian legislation from 2007 to 2008. Can I just say in regard to that that, whilst the delay in the enactment of that state legislation is disappointing, it should not be seen in any way as a lack of commitment by those states to this important reform and to energy market reform as a whole.

The new legislative regime will apply to the National Gas Law and the National Gas Rules in all participating jurisdictions to create a harmonised national gas access regime. The Commonwealth and all states and territories, with the exception of Western Australia, have agreed to introduce legislation known as the applications act to apply to the National Gas Law as law in their own jurisdictions. Western Australia will pass complementary legislation to give effect to the NGL. The Commonwealth applications act is the Australian Energy Market Act 2004, the AEM Act. It was amended in 2007 to apply, among other things, the National Gas Law in the Commonwealth’s offshore jurisdiction through reference to the anticipated South Australian and Western Australian legislation. The South Australian lead legislation implementing the NGL, and the WA complementary legislation, will be passed in 2008 rather than 2007.

The Ministerial Council on Energy has, in the main, worked cooperatively and effectively since it was established by the coalition government in 2001. There are always a number of issues to be thrashed out when bringing together ministers from different states and, on occasions, of different political persuasions. I am referring here not just to the Liberal-Labor divide or the parochialism of states and territories but, rather, to the personalities involved. Over the time that I chaired the MCE—some six years, with each meeting an interesting experience, to say the least—it is fair to say that there was an eclectic mix of personalities round the table. The first few meetings probably took the cake. One would wonder how, from those first meetings, we ever succeeded to take this issue so far so successfully. We saw a commitment from the ministers involved—perhaps with one exception; I do not think Kim Yeadon ever saw it as anything other than an opportunity to score points, firstly, off the Commonwealth and then off his Labor colleagues. I would probably suggest that without his confrontationist attitude energy market reform may have got off to a better start. Kim aside, I think every minister who came to that table came, yes, with state interests in mind but certainly with a view that energy market reform is something that needs to be pursued, and that, as we see from this legislation, is continuing to make progress.

I must take this opportunity to lament the highly politicised nature of energy market reform in New South Wales. I guess it comes from that state not making some hard decisions earlier on. But I do hope that the reform in that state continues, because if it does not the sort of investment we need to see in the energy industry—not only in New South Wales but in Queensland, Victoria and of course right around Australia—will simply not happen. There is no role for government in the ownership and operation of energy assets. That is a thing of the last century. That is a way of operation when there is market failure. Energy market reform is a critical factor in ensuring that Australia provides a sound economic environment for companies and corporations to make investments in energy that will not only enable them to make a return but also, of course, see the investments made in such a way that we will have the energy security that we need in the future.

There is probably no better time to talk about energy security than now, when we see the disaster that has beset Western Australia. In the main, it was due to an accident, but I am not going to delve into the wheres and whys of that. But it does highlight a couple of issues. It highlights, firstly, that Western Australia has allowed, through this current Carpenter government, a situation to arise where it has no alternative supplies of domestic gas. The way you encourage supplies of domestic gas is the same way you encourage alternative sources of electricity or power stations—that is, you allow the market to work. You allow the price to reflect demand and, in the case of gas, you allow the price to reflect the world price. Interference in that market by the Carpenter government has certainly caused a lack of investment in domestic gas supply in Western Australia in the last three years, and there are lessons to be learned from that by the federal government.

This current proposal of the Minister for the Environment to interfere in the normal commercial development of gas fields insisting that there be only one gas hub in the northern Western Australian Kimberley region again puts in danger the commercial and normal development of energy resources in Australia. I urge the government to take stock of that position and realise that, wherever government has interfered in the energy market, whether it was in the 20th century or now in the 21st century, disaster has inevitably followed. There are bad investment decisions and there is the requirement for taxpayers to pick up the tab. This is certainly an area which, if left to its own means, can make the right decisions to ensure that Australia has the right energy solutions. Energy market reform is very much a part of that.

The ministerial council, as I said, was focused, over the six years that I chaired it—and I understand under the current Minister for Resources and Energy it has continued along that path—on developing a framework for an efficient and effective national energy market in Australia. I say in conclusion that the opposition will be cooperating with the government to assist in strengthening the energy market program under the ministerial council and delivering the economic gains that are available from such reforms. Without those reforms, the energy market in Australia and the infrastructure and investment we need to sustain it will simply not happen.

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