Rowan Ramsey (Grey, Liberal Party) Share this | Hansard source

When it comes to South Australian electricity supplies, I think I am more probably more expert than the member for Shortland, having lived through the procedure, having dealt with Alinta through that closure period and having met with the AEMO in 2012 to express my concerns about what the removal of Alinta's Northern Power Station would mean to South Australia. It doesn't give me any great thrill to say I told you so, but I did tell this House, on a number of occasions, exactly what I thought would happen. I have proven to be remarkably perceptive in that area, I must say.

This MPI this afternoon targets irresponsible divestiture policies. I might point out that it is a little puzzling that the two biggest economies by GDP in the world are the US and the EU, which both utilise divestiture policies. It does not seem to be holding them back all that tremendously badly. They are rarely used, and why is that? It's because, when companies and investors understand what the rules are, they fashion themselves in advance to set up their business arrangements so that they don't saturate any particular market.

It was Paul Keating who knew this. Paul Keating knew about it well. In 1990, he actually instigated the current policy of the four pillars of Australian banking, which is still standing. It was to stop one of the other banks taking over and reducing the four pillars to three pillars, if you like, and then the three pillars to two pillars. Keating knew that you had to have a level of competition to achieve the best result. Notwithstanding the current banking inquiry and things that may not be as they should be in that area, Keating certainly understood the issue of competition.

The thing is that if you want competition then the undeniable fact is that you need competitors. In the case where you have two or three power suppliers, it's almost impossible for a new player to get a start in the market. Government policies are very focused on enabling new players to get into the market across a range of issues, including being prepared to underwrite new investment in this area to smaller players. These small players should not be frozen out and intimidated by monopolies, duopolies or even triopolies. They need the chance to establish their business.

To go back to the South Australian issue: I was involved on a regular basis with Alinta. It must be understood that the proliferation of renewable energy in South Australia actually undermined the business case for a base-load generator. Basically, we had a power station that used to be able to sell electricity for a profit for 365 days a year and then 300, then 200, then 100 and then less than 100. It was to the point where it couldn't sell electricity on a profit for enough days for it to survive. They went begging to the South Australian government and to Jay Weatherill for a lifeline. They said, 'We could keep this power station open for another three or four years,' when in fact it had a projected 15-year life, for an $8 million a year consideration. Premier Weatherill rejected that.

That decision alone will cost South Australia billions of dollars over the period of the decade from that power station's closure. It's because of that that our electricity is the most expensive in the world. It's what happens when you get blanket policy—blunt policy, if you like—applying across the whole nation. The South Australian government chased investment in renewable energy down relentlessly and led to this situation where the unreliable energy, if you like, chased the reliable supplier out of the market. On that day when Alinta as a generator departed from South Australia, we were left with two—maybe two and a bit—major suppliers of electricity. That is just not a comfortable marketplace. It is not a way to generate competition.

The government was faced with this situation and it had to act. What would the opposition have us do? Sit and do nothing, allowing consumers in the market to be gouged and not be properly serviced? Not allow another competitor to come in on an even basis?

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