Angus Taylor (Hume, Liberal Party, Shadow Treasurer) Share this | Hansard source

It is an absolutely important rule and it should be applied consistently; I agree.

The Treasurer, over there, will be given autocratic powers under this legislation. Right at the heart of that is an aggressive price cap. But the bad news for the Treasurer is history, application and the theory all tell us that aggressive price caps are bad for consumers and make customers worse off.

Let me take those opposite through the theory, the application and the history on exactly this issue. I go right back to macroeconomics from the 1980s, with this University of Sydney textbook. I will point out that the Minister for Climate Change and Energy was there, educated perhaps with this textbook by Jack Hirshleifer, back in the 1990s, as was, ostensibly at least, the Prime Minister. On page 231 there is a wonderful exposition of aggressive price caps. The textbook says: 'Supplies will be lost, leaving less available for consumers.' It goes on to say: 'The cumulative effect may be a breakdown of legitimate trade', and then it goes on to document that this will make consumers worse off, not better off.

When we look at history, we see exactly this. Of course, those who fail to learn from history are doomed to repeat it. In the 1970s, the US president, Nixon at the time, imposed a 90-day price cap. It was a complete disaster, triggering stagflation. It was ultimately a disaster within the US economy. Gough Whitlam sought to replicate that in 1973 and took it to a referendum, and the Australian people rejected it. They rejected it because queueing up to get your petrol, being rationed, was not what they wanted. Ultimately, the costs to consumers were higher than was worthwhile to the Australian public.

Those opposite are failing to listen to experts and the industry about what will happen as a result of this legislation. I look at one of the industry players, who said on 12 December in the AFR, 'This reckless free market intervention by the government will divert investment away,' and, as a result, reduce supply. Now, what happens when you reduce supply? Prices go up for consumers. What's remarkable about this legislation is that, with this autocratic legislation they—including the Treasurer there—are controlling the price from the producers, but they're ignoring the consumers. There's no impact on bringing down prices for consumers in this legislation. It's all about their disdain for the producers.

Let me talk a little bit more about what some of the other producers have said. Meg O'Neill, the CEO of Woodside, one of the major producers of gas, in the Bass Strait, has said it will 'make it difficult for industry to economically invest' to deliver supply. That's what she said. The supply is simply not going to be there. She goes on to say that 'the unprecedented market intervention announced risks driving investment out of the system'. We've heard Credit Suisse say in recent days:

The damage has already started: nearly all gas contracting has shrivelled up in the last few days.

This is my question to the minister. The media release stated that the average Australian family 'would be $230 worse off next year if we do not take action'. What modelling was undertaken by the Treasury to provide this figure? Will the government commit to tabling that modelling?

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