Jim Chalmers (Rankin, Australian Labor Party, Shadow Treasurer) Share this | Hansard source

The Treasury Laws Amendment (Prohibiting Energy Market Misconduct) Bill 2019 is the bill that we have been discussing in this place for some time, known as the 'big stick bill'. What it does is it introduces new prohibitions and remedies that target misconduct in electricity markets. The bill targets prohibited conduct in three important areas. The first is retail pricing, which aims to ensure that retailers pass on sustained reductions in cost to electricity customers. The second is contract liquidity, which aims to ensure that generators, including gentailers, do not refuse to offer financial contracts for anti-competitive purposes, essentially to ensure suppliers do not withhold supply in the contract market to increase prices and profits. And the third area is wholesale pricing, which aims to ensure that generators don't manipulate the wholesale electricity market to increase prices and increase their profits as a consequence.

What happens under this bill is that businesses which are determined by the ACCC to have engaged in prohibitive conduct can be subject to an escalating schedule of punishments from the ACCC, including: a public warning notice, an infringement notice, a court enforceable undertaking, application to a court for an injunction, and an application to a court for a pecuniary penalty. I think what's received the most attention—for good reason—as we have discussed this bill and its predecessor are the more serious instances of misconduct, which, under the arrangements in this bill, could be met with divestment orders or contracting orders. These are, as I said, for the more serious instances, where the ACCC reasonably believes that a person or a business has done the wrong thing, where there can be more extreme steps taken to right the wrong that has been done to a customer.

I think the most important point that I can make today is that this is a very different bill to the bill which was proposed in the last parliament—a bill we opposed at the time. Since then, some months ago, there have been some steps taken by the government, but there need to be some further steps taken to make the bill acceptable to us on this side of the House. It was an incredibly controversial bill when it was first moved in this place during the course of the 45th Parliament. As the member for McMahon and others pointed out at the time, the original bill did have the capacity to do substantial harm rather than substantial good. There was a very real prospect and a very genuine concern that the original bill put forward in the 45th Parliament would have chilled investment in one of the most sensitive sectors—a sector which is crying out for more investment and more certainty—and had the potential and the capacity, and the likelihood, even, to make the problems in our energy market worse rather than better.

This bill, unlike the original version, removes the possibility that divestment orders will be used to privatise publicly owned generation assets. That was one of the key concerns that we raised during the course of the last parliament, and it is good to see that some steps have been taken to make sure that full privatisation can't occur. We'll also make clear, when I get to our amendments in a moment, that there are further steps that need to be taken in order for us to support the bill, in terms of closing down the capacity for partial privatisation as well. The government's changes since the last version of the bill ensure that a government owned asset that is divested remains in public hands. That is very important to us on this side of the House. The change was made after Labor and others, including state governments, raised their concerns. So we are pleased to see that the government took those concerns seriously and updated the bill accordingly when they re-presented it in this parliament.

One of the other issues that we had was that we thought the original version of this bill was too heavy-handed on the divestment side when it came to ministerial discretion. Again, we welcome the changes to the bill which mean there is a more central role for the ACCC and also for the Federal Court. In the case of a divestment order, the Treasurer, based on ACCC advice, must now seek a divestment order from the Federal Court. The increased role of the ACCC and the Federal Court has addressed some of the concerns from some investors in the energy sector and, indeed, some of the concerns that we raised during the course of the last parliament.

I think it is fair to say that the changes which have been made and the public debate that has occurred since the presentation of the first bill do vindicate the position that we took then and the position that we're taking now. The bill last time was not a good bill worthy of the support of this place. We believe that, with some additional amendments, the version of the bill that has been presented in this term of parliament is worthy of the House's support because some of the worst aspects of the bill, as I said, have been largely addressed.

There are a couple of exceptions to that, though. My colleague the member for Hindmarsh will move some detailed amendments when he gets his opportunity to speak after question time. He will move three additional amendments which go to our remaining concerns about partial privatisation and about a review of the operation of the bill, but also ensure that the transfer of business arrangements in the Fair Work Act can apply here so that workers are not unfairly impacted in the event of divestment. There will be three detailed amendments. The Treasurer and I have been in discussions about the amendments. As I understand it, unless something has changed since this morning, we will be welcoming the government's support for our amendments in return for our support for the bill overall. They are sensible amendments. I suspect they are largely issues that have taken some time to come to light. It is good to see that the government is prepared to support those amendments when we move them. If and when that happens, we are prepared to support the broader bill. If other issues around workforce and other relevant considerations pop up in the course of the Senate inquiry, after the bill travels through this place and goes to the other place, they can be interrogated in that process and then we should all—collectively, both sides of the House—use our best endeavours to address those as well.

Although this bill now, with the amendments I've just discussed, is worthy of the House's support, I think it is also worth noting that, given power prices have risen substantially—wholesale power prices are up 158 per cent since 2015—there is a substantial and understandable level of scepticism in the community about the government's record, ability and willingness to address one of the key cost-of-living pressures on Australian families. This bill won't do anything substantial to end what has become an energy crisis under those opposite. Whenever we ask them about energy in question time or at other opportunities, they always want to talk about us. They are in their seventh year of office and their third term. They have to take responsibility for the fact that wholesale power prices have gone up substantially, and this bill will not substantially address that issue.

Australia is suffering through the worst energy crisis in decades. It is not good enough that, in their third term and seventh year, there is no settled and sensible overarching energy policy. There's nothing which will create the policy and investment certainty which business need to invest in clean, reliable and affordable power. That is the main unattended and unaddressed issue, even after this bill passes through this place. The bill won't do anything to build the transmission we need to support a modern industry system. It will do nothing to modernise market rules so consumers and businesses can take advantage of the technological revolution currently underway across our energy system and across the world. That's why I move the second reading amendment circulated in my name:

That all words after "That" be omitted with a view to substituting the following words:

"whilst not declining to give the bill a second reading, the House notes that the Government has proven unable to deliver sensible national energy policy to support well-functioning electricity markets that will:

(1) support new clean energy investment;

(2) safeguard energy reliability and security; and

(3) deliver a modern and affordable energy system for a modern Australian economy".

As I said, on this government's watch power prices have skyrocketed, smashing household budgets and jeopardising thousands of manufacturing jobs. After 16 attempts the government has been unable to agree on a national energy policy to resolve this energy crisis. The lack of policy from the Liberal government has been cited by the Finkel review, AEMO, the Energy Security Board, industry and Infrastructure Australia as driving up costs in our system. If that side of the House were serious about ending the energy crisis, the government would come back to the table on the National Energy Guarantee, which the Prime Minister and the Treasurer both said would bring down power prices by an average of $550 a year, according to the government's own modelling. Instead we have a jumble of policies, no vision, no guiding principle and no policy coherence, because the most extreme members of the government backbench call the shots on energy policy. As I have said before, when it comes to the Liberal Party, the tail wags the Treasurer when it comes to energy policy. It has been a defining failure of the last six-and-a-bit years, the last two-and-a-bit terms, that the government hasn't been able to come up with a settled energy policy. That's why we have got not just rising prices, with a 158 per cent wholesale price increase since 2015, but all of the associated issues around uncertainty when it comes to investment in the system.

As one would expect, in my role I spend a lot of time in the boardrooms of this country. Sometimes business want to talk to me about the skills shortage. Sometimes they want to talk to me about a lack of demand in the economy or a lack of productivity. Often they want to talk about infrastructure or technology. There is only one issue that gets raised with me at every single discussion that I have with the business community—probably 100 or so this year alone. The only thing that gets raised every single time is energy policy, and the lack of a settled energy policy.

I think it's fair to say that in the last parliament, when the government proposed the National Energy Guarantee, it wasn't everything that we wanted and wasn't exactly how we would design it, but we had decided on our side of the House that, in the interests of certainty and getting something settled, we were prepared to support the government. The only problem there was three or four outliers on the government backbench determined that the government wouldn't put that National Energy Guarantee to the parliament for us to support it. If they had done so, we would have a settled energy policy right now. The business community rightly and understandably just can't get why this place can't settle on energy policy, whether it be the National Energy Guarantee or something else. That lies at the core and the heart of so much of the uncertainty which is flowing through the rest of the economy.

We've had the lowest, slowest economic growth in this country for 10 years. We have almost two million Australians looking for work or more work. Productivity and living standards are falling. We have wage stagnation. People feel like no matter how hard they work they can't keep up with the cost of electricity and child care and all the rest of it. Business investment is at its lowest level since the early 1990s recession. For all of these reasons, we need a settled energy policy in this country.

We support the big stick legislation with the amendments that the member for Hindmarsh will propose, subject to the government agreeing to those. We can agree on the legislation as a whole and send to it the other place. But we need to do more in this House and in this country to get a settled energy policy so that business can invest with confidence and families can get the downward pressure on energy prices that they need and deserve.

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