Craig Kelly (Hughes, Liberal Party) Share this | Hansard source

It is very pleasing to hear the member for Hindmarsh actually expressing his concern for the high cost of electricity prices. I would think that is the first time in the eight-odd years that I have been here that I've actually heard him express concern about the cost of electricity. Normally he was there backing his mates in South Australia, his state Labor colleagues in South Australia, who were kicked out of office a few short years ago. He should have been talking to them about the price of electricity. Or perhaps he should have been concerned about when he was part of the Labor Party government that brought in a carbon tax, which affected the wholesale price of electricity. Let's just go through what has happened to the wholesale spot price of electricity in this nation.

Back in those heady days before the carbon tax, the wholesale price of electricity was $30 a megawatt in New South Wales, $30 a megawatt in South Australia, $29 a megawatt in Queensland and $27 a megawatt hour in Victoria. We then had the Labor Party introduce the carbon tax, which put 50 per cent-plus on the wholesale price of electricity. Where was Labor's concern then that we hear at the dispatch box now about the cost of electricity? There was absolute silence from them. We were told how wonderful it was. They were more concerned with implementing that tax than they were about the cost and effect it would have on Australian business and on Australian households. Thankfully, the coalition removed that dreaded carbon tax, and the wholesale price of electricity fell. In fact, in Victoria, it fell back to $35 and in South Australia it fell back to $40.

We then saw, with the Labor Party cheering, the northern coal-fired power stations in South Australia taken offline and blown up because of Labor's reckless Renewable Energy Target in South Australia. It was exactly the same Renewable Energy Target that the Labor Party took to the election last year. And what has happened to the wholesale price of electricity in South Australia since 2015? Well, according to the data from the Australian Energy Market Operator, it has gone from $40 to the current year on average of $110. In five short years, it has gone from $44 to $110 a megawatt hour after they blew up the coal-fired power station.

What happened in Victoria after they decided—another brilliant Labor plan—to chase Hazelwood out of town, to triple the coal royalties and to drive them out? What happened to the wholesale price of electricity in Victoria? In 2015, it was $30 a megawatt hour. This year it is running at $110 a megawatt hour, not double but more than triple. Almost four times has the wholesale price of electricity increased in Victoria. So we have learnt our lessons as a nation: this is what happens when you blow up your coal-fired power stations.

We have in New South Wales a coal-fired power station, Liddell, that AGL say they want to close down and the amazing thing is they have been offered half a billion dollars for it. They have been offered $500 million for that coal-fired power station. Investors say, 'It is old. It is run down. We want to come in and refurbish it and keep it running to supply electricity into the Australian grid.' AGL have said, 'No, we don't want that half a billion dollars,' because it is worth more to them closed down than it is in the hands of a competitor. That is withdrawal of supply. That is anti-competitive conduct and it should be prohibited under our nation's competition law.

I have argued long and hard with the chairman of the ACCC, Rod Sims. I said to him, 'I believe that you have an arguable case under our existing competition law to at least do some jawboning to AGL and say that is anti-competitive conduct and you will use the provision of our competition laws against it.' But he is of the opinion that our existing competition laws are not strong enough. Therefore, that is why this legislation is so important. We cannot stand back and watch a company with a very substantial degree of market power in an industry that supplies an essential service like electricity engage in anti-competitive conduct by closing down a coal-fired power station when there is an offer for half a billion dollars on the table. And that is why divesture laws for the first time in this nation's history are highly appropriate. Just quickly, I know there have been some rumblings on our side of the parliament on this; however, a divestiture provision has been in America's anti-trust laws for over 120 years. The home of free-market capitalism has had divesture powers, not just in the energy sector but across the entire economy, for 120 years.

There are a couple of important points that need to be made. Divestiture is not government control or government takeover; it is simply a demerger—forcing a company with excessive market power acting in an anti-competitive way to break themselves up into several competing entities so they compete head-on with each other. If one company owned the Liddell coal-fired power station they would not close it down and knock back an offer for $500 million. It only makes sense because they can recoup that loss with higher wholesale prices in the market, like what we have seen happen in South Australia and Victoria. That is what this legislation is about.

I will provide a lesson from history. Over 100 years ago, the Standard Oil Company was broken up and ordered to divest by the US Federal Court. They were forced to divest into 34 separate companies. As a shareholder, for every share that you had in Standard Oil, you were given one share each in 34 new companies—and very quickly the sum of the parts was greater than the whole. So history tells us that shareholders do not lose when there is a divestiture order in place.

I will leave my comments there. I know that many of my colleagues want to speak on this important legislation, and we want to get it passed through this House post haste. I thank the House.

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