Zali Steggall (Warringah, Independent) Share this | Hansard source

I welcome the relief provided to energy consumers through the Treasury Laws Amendment (Energy Price Relief Plan) Bill 2022. The war in Ukraine has generated an energy crisis that the government does need to address, and I do find the self-righteous indignation of the coalition speakers before me about government intervention in the private market slightly ironic. It is something to behold. The war in Ukraine commenced before the election, and no step was taken by the previous government to ensure some kind of insurance against volatile energy prices. But also, during the last parliament, there was no hesitation to intervene in the market with policies such as the big stick legislation to threaten energy producers if they switched to clean energy.

I think what's also really important to remember is that we have an energy crisis that is the result of 10 years of failure to accelerate a transition to renewable energy. Previous coalition governments did everything they could to put a handbrake on Australia's transition, and we are paying the price. It failed to put any protections in place to protect domestic prices and Australians from variable international energy price rises. Australians should not be paying international prices in domestic markets for their own resources. As a result, Australian households and businesses have already been left exposed to this year's 20 per cent energy price rise, and there are predictions of a further 36 per cent energy increase next year. So I support the government intervening.

The bill will cap gas prices to $12 a gigajoule in the domestic market for new gas contracts for the next 12 months. It gives the government the ability to implement a mandatory gas industry code of conduct, which I would say is well overdue. It provides for $1.5 billion of assistance to those on income support and other tax benefits as well as to small business to assist with power costs. I urge the government to come forward with the detail in relation to that as soon as possible.

The bill does not touch coal prices. The $125-a-tonne cap on coal prices will be implemented by state governments. Whilst the bill does not provide for compensation to fossil fuel companies directly for any loss or damage as a result of the intervention directly, I question whether state governments will later be compensated by the federal government. We must ensure a sensible transition away from fossil fuels. I don't support any further subsidies or compensation to coal. We must use this crisis to accelerate the transition to being energy independent, using energy sources that are price stable—that is, solar and wind.

The goal of this bill, to keep electricity prices down or to avoid the further increase that is anticipated, is important. The 20 per cent rise already this year has put so many households and businesses to the edge. We also need to be mindful not to create a policy that creates further inflationary pressure. It is a very complex and difficult balance that needs to be reached. Providing direct assistance to those who need it most by providing relief for power bill shock without adding to inflation has to be the goal.

Is it the best way to achieve that objective? I'm sure, with hindsight, we'd be able to see that other things could have been done or done better. I would question whether a direct price cap is the most effective solution. A windfall profit tax, raised already in this chamber, would be a neater solution more aligned with free market economics and would increase government revenue. Our exports of coal have declined during this period due to high prices, while the value of our exports has almost tripled. The tax revenue has not been commensurate to that rise. Many other countries, including the UK, have imposed windfall profit taxes on fossil fuel exports at this time. Australia should follow suit and get the compensation we deserve from our resources to assist with the transition away from fossil fuels. We must improve the state of the budget and provide greater levels of relief for cost of living.

I question some of the assumptions underpinning the 12-month sunset. This assumes that the global energy market will return to a more stable position as a result of the war in Ukraine ending in the next 12 months. I would be curious to know who has that crystal ball. Does that mean trade with Russia will automatically return to normal at the end of hostilities? There are a lot of questions.

But, overwhelmingly, on balance, it is important that we intervene. I commend the government for intervening to ensure that the price rises anticipated for next year do not occur. That is why I will support this bill. But I urge the government to undertake ongoing consultation and to commit greater resources to accelerating the transition to cleaner forms of energy.

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