Paul Fletcher (Bradfield, Liberal Party) Share this | Hansard source

I thank the minister for the question and the opportunity to answer it. The point that I would make in answering the question is that, in an environment where prices are expected to rise, it is extraordinary that you would then stick on a discretionary tax which is likely to increase prices by a further 20 per cent, and that is the consequence of this government's policy. That is why I say and we say on this side of the House that there has been a complete reversal in policy direction by this government.

The 2002 review which I cited earlier noted correctly that our low energy prices are a huge competitive advantage, and it is clearly therefore a matter of considerable concern that we have such a sharp and direct reversal in policy direction by this government. It is further concerning that a consequence of the carbon tax policies being pursued by this government is that there is a key negative effect on major sectors of energy generation. The New South Wales government, for example, estimates a $5 billion loss in the values of its black coal based generation assets. to So it is very hard to understand why it makes sense on the one hand to be pursuing a continuation of the energy market reform process while on the other hand introducing a completely separate policy which goes in the opposite direction.

The other thing that is very interesting in the 2002 review is that it highlights the importance of certainty in the regulatory regime applying to the energy sector for the purpose of encouraging investment. I cannot imagine that the authors of that review would have predicted a scenario in which a government would be elected in 2007 promising an emissions trading scheme, would in 2010 abandon that policy, would later in 2010 make a solemn promise to the Australian people that there would be no carbon tax and then in February 2011 announce, capriciously and with no notice, that there would now be a carbon tax. The degree of uncertainty facing the industry has been ramped up beyond what might reasonably have been expected or predicted when this review was written in 2002.

The third point I want to make in the very brief time that remains to me is to highlight the difference, the contrast, between the reform agenda in energy and the way in which the reform agenda has gone wildly off track in the telecommunications sector. These are two networked industries with very considerable similarities. The regulatory frameworks are in many ways quite similar. Both were the subject of competition policy reforms throughout the 1990s. In the energy sector, the Gillard government is at least nominally continuing to implement the Howard government's reform agenda, albeit undermined, as I have noted, by its contrasting policy direction to do with the carbon tax. But it is very noteworthy that when it comes to telecommunications there has been a complete reversal of a reliance on competition. This government has effectively abandoned competition. Compare it to the electricity sector, where there has been a continued reliance on the existing assets in the sector rather than the government building new assets, where companies have been permitted to continue to operate based upon their current ownership structure rather than an effective policy of nationalisation, where existing players have been structurally separated through breaking up vertically integrated companies into generation, transmission and distribution as opposed to the spurious argument we hear in the telecommunications sector that the only way to achieve structural separation is to build a brand-new company at vast government expense. And where in the energy sector there has continued to be a commendable reliance on competition, the comparison is not a favourable one. I make the point that it is one of the many ways in which policy in these areas is rife with internal contradictions.

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