Mike Kelly (Eden-Monaro, Australian Labor Party, Shadow Assistant Minister for Defence Industry and Support) Share this | Hansard source

What we've seen is that the only consistent power policy on that side of the chamber is the power politics policy. The number of times they've engaged in coups now has completely preoccupied them. It has paralysed them, preventing them from producing the power policy this country needs. For five years they've sat back, fat, dumb and happy, spinning on their axis, while power prices have spun out of control around this nation. What is the reason for that? Obviously the major factor has been the lack of stability in policy.

The country is crying out for a bipartisan approach to energy. We know that so many experts have said that is the key to getting investment in power generation. We know that renewable energy can deliver that baseload power, which all the experts say will bring down power prices. But the government has crippled that investment flow. And no less a person than their own Chief Scientist has said that industry needs policy stability to give it the confidence to invest in new power plants. So firstly, the uncertainty of policy has helped drive up those prices. That is completely on the government.

Second, of course, is the gold-plating of the network. The network companies based their investment decisions on forecasts projecting demand for electricity—that it would continue to rise—and those forecasts were wrong. In New South Wales they spent billions, and that cost was passed on to consumers. That was a major factor in price rises at the time of the effect of our Clean Energy Future package. It had very little to do with that, and what was there was offset by our compensation scheme for all those people that needed it. Here today, when we're talking about the impact of higher electricity prices, this very government is the one that's trying to take away the energy supplement and the relief that people need for their situation. As my colleague says, we've seen a price rise of 30 per cent in two years. The gold-plating of the network was a big factor.

The closing of power stations has been another factor. That's been a product of the privatisation of the system. We've seen Northern and Hazelwood go. The decision to close Hazelwood power station was made in boardrooms in France and Japan because Victoria allowed privatisation of its network. That's the only reason that happened. There were another 10 minor power stations that closed in this five-year period, on this government's watch, with no action being taken to ensure that that base-load flow of investment was coming in behind that.

In addition to that, we've seen, with this underinvestment in the maintenance of those plants, that the uncertainty and the breakdowns that happen with individual generators also add to impact on cost. The government talks about trying to prop up Liddell. In the last big heatwave that we had, it was Liddell that was the problem. Two of its four units fell over. It was the Snowy Hydro scheme, the biggest of our renewable energy projects, that kept New South Wales going during that time. It's the uncertainty in the existing coal infrastructure that's also putting pressure on prices, particularly because of issues relating to propping up the system during peak hours—the spot market and the hedge market.

Gas, of course, is another big issue. As those coal-fired power stations fell over, people fell back on gas generation. The government wouldn't listen to us when we told it to enter into a national guarantee on gas. We said this would happen. We begged the government over years to do that, and it did nothing until it was too late. Additional to that are the effects of privatisation themselves. The government allowed that process to go with no strategic approach to regulating the market, so those private companies have been out there gaming the system and absolutely ripping consumers off. We've seen something like a 13 per cent profit margin from those retailers, which is more than double the norm for utilities. That's happened on the government's watch. There was no plan to regulate the market as it was unfolding in that respect. It was complete negligence in the management of our system.

We know that renewables will bring those prices down. That's what all the experts say. In fact the ACT is on target to reach 100 per cent renewable energy, and it has the lowest bills in the country. All the analysis has found that renewable energy targets will help soften price rises by increasing competition in the national energy market—I thought you guys were in favour of competition! I also point out that we've talked a lot about Snowy 2.0. The government are threatening it because of its plans to build coal-fired power stations. It says that that long-term commitment of 60 per cent renewable energy by 2040, that it highlights, will reduce energy spot prices in New South Wales by 10.2 per cent. It's the culmination of Snowy 2.0 and renewables that will deliver lower prices. The government needs to listen to the community out there and get its act together. (Time expired)

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