Chris Crewther (Dunkley, Liberal Party) Share this | Hansard source

I rise today to speak on the Competition And Consumer Amendment (Abolition Of Limited Merits Review) Bill 2017. Power prices are excessively high, whether in my electorate of Dunkley in Victoria or elsewhere in Australia. The average person is suffering, particularly those who cannot afford to pay their power bills. It's one of the subjects that are most frequently raised by my constituents in Dunkley, and I know it's raised elsewhere across Australia. It is something that people expect us, the Turnbull coalition government, to take action on. So the cost of living is a crucial focus of the coalition. It is a real issue that affects Australians every day. It is, indeed, crippling families, the elderly and businesses, particularly small businesses, who cannot afford to pay their bills, who are struggling to pay their bills or who are having reduced profit margins because of higher electricity prices. It is a focus of this government and has been an ongoing subject, particularly since late last year.

Electricity and gas are non-negotiable commodities and consumers have minimal bargaining power. They can be, for example, subject to monopoly rents. So we have a responsibility to do something to ensure that national regulators have real power and that Australians are not being ripped off. The extensive review and appeal system is racking up huge bills where costs are passed on to the consumer.

Let's look at this bill. This bill legislates to remove the ability of networks to appeal the merits of decisions of the Australian Energy Regulator. It also removes limited merits review. Currently, electricity and gas networks can appeal merits of decisions of the Australian Energy Regulator to the Australian Competition Tribunal. Indeed, 32 out of 51 Australian Energy Regulator decisions have been challenged since 2008. Never has an appeal by networks resulted in reduced costs for consumers and businesses. In fact, consumer bills have increased by $6.5 billion and network costs have increased to 40 to 50 per cent of the overall household bill.

This bill is actually equalling the treatment of electricity and gas networks with telecommunications, water and postage services. Other sectors do not have access to merits review. With these changes providers will still have access to judicial review if they want to challenge the Australian Energy Regulator's decisions, as with other sectors. Limited merits review was an appeal based on the merit of the decision whereas this is focusing more on the judicial grounds.

But this bill isn't just removing the limited merits review; it's also providing additional funding for the Australian Energy Regulator of $67.4 million. This ensures that they are fully equipped to address behaviour in the market that is resulting in higher than necessary electricity prices. It's also a recommendation of the Finkel review. It is critical to consumer confidence in our electricity and gas markets. Recently I went to a business in Carrum Downs, which is just outside of my electorate. Pacific Urethanes employs a large number of people from my electorate. They're an Australian owned company specialising in the development and production of polyurethane systems. (Quorum formed)

The opposition interrupted the speech because they want to continue playing games with our country. They don't want to hear about the fact that we want to reduce electricity prices for Australian consumers. They don't want to hear about companies in my electorate, like Pacific Urethanes, who are suffering in terms of their energy prices and who have reduced profits because of the electricity prices continuing to increase. This is why we are taking action and this is what I am talking about. It's unfortunate that the opposition continues these games in this House.

As I was saying, Pacific Urethanes is an Australian-owned company specialising in the development and production of polyurethane systems for Australian and export markets. In my electorate in particular, there are 16,000 small businesses. The business that I'm talking about is one which employs a significant number of people in my electorate and contributes to those who are already employing from those small businesses in Dunkley. Last week, I met with a couple of the directors of Pacific Urethanes, Jim Hall and technical director Gerard Murray. They talked about the fact that they've had an increase in running costs due to an increase in energy prices, and an increase in the cost of doing business has therefore had a cost on jobs. This then directly impacts upon people's livelihoods. These are people who have been hit twice from poorly constructed energy policies: firstly, by the limited merits review, first implemented in 2008 under the former Labor government; and then by the failed reforms in 2013—not to mention the carbon tax in 2012. The big causes of price rises and decreased income reported to me by businesses in Dunkley arise from some of these policies.

The Turnbull government is working to support small business and to remove hurtful legislation which is damaging the cost of doing business in Australia and hurting our markets. The impact on businesses is significant. Not only do businesses have to deal with regulation, red tape and the cost of doing business; they have to deal with the regular increase of electricity prices, which feeds into their bottom line and their opportunity to create jobs and more outcomes in our community. It also feeds into the security of their investments not only in their business but in our wider community. And there are flow-on consequences, whether it's for the local community organisations that they sponsor or for the sporting clubs and so forth.

I want to go now to some of the constituents in Dunkley. A gentleman called me up recently saying he couldn't afford to heat the house, so he only does so when his daughter comes to visit. A resident in Frankston signed up to an electricity and gas plan and contract that said they could expect a bill of $386.65 per quarter for a medium-sized family with 1,000 kilowatt hours per quarter. That excluded connection fees and pay-on-time discounts. Based on previous estimates, up to $193 of this constituent's quarterly bill could simply be network costs. Some providers don't let you choose the billing frequency, and this is a huge burden and cost to bear in one go if you have to pay a big bill up-front. Not only are consumers and residents in my electorate being hurt by electricity prices; they have had insult added to injury in that electricity and gas networks have two chances to appeal decisions made by the Australian Energy Regulator.

Dunkley also has one of the largest retirement populations in Australia. I've had a number of the retirees and senior citizens of Dunkley come to me recently—for example, Brian of Seaford, Vera of Frankston, Duncan of Mount Eliza and Bill of Frankston South. They've all raised the issue of electricity prices and our energy policies with me. They also raised the fact that nearly everyone in their age group are raising energy and electricity prices as one of their key issues. So we do need to do something about this. It's not only an ethereal concept; the fact is heating in winter and cooling in summer are essential to the health of our elderly citizens. For example, they are much more sensitive to temperature changes than younger people.

In the wider Victorian context, power prices are already high. We have seen Hazelwood shut down at a time when we need energy security. Absolutely, we need to invest and increase our renewable energy sector but consumers are hurting from every angle. We need energy security at the same time as there is investment in renewable energy, and more than ever we need to act now. It is a critical time and we need to take action around power prices. We have seen the state Labor government in Victoria failing with the respect to their energy policies, not to mention their safety record. For example, the 2016 Safety performance report on Victorian electricity networks: 30 September 2016 highlighted a number of safety failures. For example, United Energy was one with a significant number of failures in their network, and action to correct this has not been properly taken by the Victorian state Labor government.

Why do we need this bill? We need this bill as previous attempts have shown us that reforms are not working, that the limited merits review regime needs to be completely abolished. I'm looking forward to bipartisan support to lessen the cost of living for all Australians—and I hope there'll be no more quorums or other things during this speech that will disrupt the details of the actions we are taking to help everyday Australians. It is inevitable that we must move towards renewable energy. Prices are currently high due to the cost of transition and the lack of energy security. Consumers cannot afford to be hit twice by the cost of their electricity and gas bills.

If this bill is not passed, we'll have further appeals of decisions by the Australian Energy Regulator, which will result in higher electricity and gas network revenues and higher prices for consumers. As I said earlier, not once has an appeal to the Australian Competition Tribunal resulted in a reduction in costs for consumers. This bill removes the regulatory burden and provides greater regulatory certainty. It ensures the Australian Energy Regulator's decisions are respected whilst ensuring the right of access to judicial review. It removes the cost from consumers of $6.5 billion, including for residents in my electorate of Dunkley. Currently, consumers get to foot the bill for the electricity and gas networks' privilege of appealing the decisions of the Australian Energy Regulator. The Australian Energy Regulator is there for a reason and we need to make sure its decisions actually mean something and have outcomes that can be enforced and reinforced, and that benefit people in my electorate and across Australia.

To conclude, again I note that consumers in my electorate of Dunkley and elsewhere are being ripped off due to the right of electricity and gas suppliers to appeal decisions made by the Australian Energy Regulator. Thirty-two out of 51 decisions made by the Australian Energy Regulator have been appealed using the Australian Competition Tribunal, and not one has had a positive outcome for consumers. The Australian Competition Tribunal effectively has been a second regulator. Costs have been passed on to consumers, including in my electorate of Dunkley. The limited merits review process has resulted in increases to bills across the board of $6.5 billion. People everywhere are being hurt by the cost of energy, so we need to ensure that the Australian Energy Regulator can actually regulate the industry.

We have an obligation to the Australian people and I have an obligation to the constituents in Dunkley to make sure that their voices are heard. People are telling me they cannot afford this anymore, particularly the elderly residents of Dunkley. Prices are, in some cases, up to double the actual cost of electricity and gas due to network costs. It's the No. 1 issue that is coming across my desk in community surveys, through email campaigns, over the phone or in person. People in my electorate of Dunkley and across Australia expect me and the government to do something, and rightly so. People's health and household budgets are facing an impact because of the increases to electricity prices, and we must provide security for Australian families.

I know that those opposite recognise the need to act on this matter, but let's hope that they work to ensure positive results and lower electricity prices for consumers. I am proud to stand up for the Dunkley voices who have reached out to me and the Turnbull coalition government. The Turnbull coalition government are indeed listening and we will not let them down. We will act to ensure that Australian consumers have lower electricity prices into the future.

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