Angus Taylor (Hume, Liberal Party, Minister for Energy) Share this | Hansard source

What an extraordinary display we have just seen. At the beginning of question time we heard the Leader of the Opposition railing about the growth of profits in the economy—back to his old Marxist roots—and then, minutes later, he was standing there defending energy companies who were delivering record profits at the expense of hardworking Australians—small businesses and families. He was standing there defending the Queensland government that last year took over $2 billion out of the pockets of Queenslanders—hardworking Queenslanders like the team I met a couple of weeks ago from FLIT Fitness, who saw their electricity bill per quarter go from $500 to $2,000. That's $1,500 being taken out each quarter and going straight into the coffers of the Queensland government, which means that profits are okay if they're in the hands of the Queensland government. They like them being in the hands of the Queensland government, because the Queensland government has broken its budget, and the people of Queensland are paying for it.

We stand for a sensible, balanced policy and for reliable, affordable electricity—electricity that works 24/7, not like your pink batteries, which go for an hour in a 12-hour night, but sensible, affordable, reliable power that works 24/7. We do stand for lower electricity prices, and we're seeing exactly that, with our price safety net, with the reductions we have seen, under pressure from the government, from energy companies across the board. Half a million Australian families and small businesses will see a better deal, even if they don't have time to get on the phone each year to negotiate a better price. Those households on standing offers will see a better deal in New South Wales of, on average, $200 a year; in Victoria, $313; in South Australia, $270; and in South-East Queensland, from the retailers—but the Queensland government's not contributing to this—$175.

As well as that we have introduced to the parliament today our big-stick legislation, and we've done it because there has been price gouging. We want to stop market manipulation. There have been dodgy practices, to use the words of one of the chief executives of the big energy companies. He described the practices that have occurred in the industry as 'dodgy'. We've seen these sorts of practices in the retail market, in the wholesale market and in the contract market, and this is an essential part of our package, our policies to reduce electricity prices. When did reducing electricity prices become not a policy? How can the Labor Party think that that is not central to any sensible policy? I'll tell you why. The Labor Environment Action Network told us why. They think that rising prices are an illustration of the market working well.

Those opposite are in favour of higher electricity prices. In fact, the last time they were in government they did exactly that: they drove higher electricity prices. We know that in addition to ensuring that vulnerable customers get a fair deal, ensuring that the big energy companies are held to account, we need to make sure that there is enough reliable, 24/7, supply in the system to keep prices down and to keep the lights on. We'll have a shortlist of projects in the new year—dispatchable, reliable, 24/7 power that can balance the record level of investment in solar and wind that's happening right now: $15 billion of investment. It needs to be balanced with capacity firming, with storage—with the sort of capacity that can deliver 24/7 power to make our aluminium smelters work properly, to make sure that our steel mills can work, to make sure that our abattoirs can work and to make sure that every Australian knows that when they flick the light switch the lights will go on.

In contrast, unfortunately, tragically, there was what we saw under a Labor government in South Australia. When South Australians flicked the switch, nothing happened. Yet they still, at the end of the quarter, were getting the highest electricity bills in the world. That was because of reckless policies from a Labor government that doesn't understand that you have to have 24/7, reliable power to keep prices down and keep the lights on. It is about balance; it's about balance across all fuel sources. On top of those initiatives I've already described, we're progressing reliability obligations through COAG. This means that, years ahead of time, the retailers will need to invest in that 24/7 power that is going to keep the lights on and is going to keep prices down. They will be held to account, and that's what this is all about. We need an industry that focuses on its customers and that focuses on a fair deal for all Australians, something that the Labor Party no longer understands at all.

The real question right now in this place is: which side will the Labor Party sit on? Will it sit on the side of those hardworking small businesses and families across Australia, or will it sit on the side of the big energy companies' executives? Whose side will it sit on? We sit on the side of those hardworking families and small businesses. Those opposite are very happy with the profits of the big three electricity companies rising from $1.4 billion in 2014-15 to $2.6 billion this year, and that doesn't even include the Queensland government ripping $2 billion out of the hands of its customers in the last year alone.

The bill that we have introduced to the parliament today will hold energy companies to account across each of the crucial markets for electricity. In the retail market, we know retailers deliberately confuse customers with their discounting strategy, often using what the ACCC has called excessively high benchmarks and complex offer structures. That needs to change. We need to see that, when wholesale prices go down, so too do retail prices. We need to make sure that, when retail prices are set, they are set in a fair way without a loyalty tax. The ACCC has described these practices and said:

Electricity retailers' discounting practices are a deliberate tactic to give the impression that an offer is significantly cheaper than other offers in the market when this is often not the case. This behaviour is confusing, at times misleading, and leads to poor consumer outcomes.

Retail prices need to follow wholesale prices. That's built into the legislation. In the wholesale market, a lack of competition has resulted in higher prices. The ACCC said:

… lack of competitive pressure is of concern to the ACCC, particularly given the critical need for a sufficient level of competition …

It said:

In each NEM region the current combined market shares of the three most significant generators is close to or in excess of 70 per cent on the capacity measure, and over 80 per cent on the dispatched energy measure.

That's with only three players, and those opposite are defending them.

Those opposite used to believe in competition policy. They have a competition lawyer on their front bench. Isn't she explaining to you that this is a problem? Hasn't she explained to you that asset divestiture is applied across the board, across the whole economy, in the US under the Sherman act and in the UK under their Enterprise Act? What we are doing is targeting. It's energy specific, it's time limited and it requires a court order. I'm sure your competition law adviser can explain to you that it is measured, it is proportionate and it is appropriate for a market where 80 per cent of the market is held by three players.

In the contract market, a lack of liquidity acts as a barrier to entry, where the dominant position of gentailers can make it harder or impossible to enter the market. In South Australia, if you are an independent retailer and if you're an independent generator, getting into the market is nigh on impossible. It is tied up. The ACCC puts it well when it says:

In certain regions of the NEM, particularly South Australia, the level of liquidity and the advantages enjoyed by vertically integrated retailers make it difficult for new entrants and smaller retailers to compete effectively in the retail market.

We are acting on this, because we stand on the side of those hardworking Australians who want a better deal with their electricity prices. We are dead against a 45 per cent emissions reduction target that those opposite support. They want higher electricity prices, because they want to make sure that Australians buy less electricity. They want to make sure that Australians don't get a fair deal. We are for a fair deal.

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