Geoff Lyons (Bass, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Resources and Energy and Minister for Tourism. Will the minister update the House on the progress of energy market reform and how this is contributing to Australia’s productivity performance?

Martin Ferguson (Batman, Australian Labor Party, Minister for Resources and Energy) Share this | Link to this | Hansard source

I thank the member for Bass for his question, as he appreciates that energy reform has been regarded since the eighties as a key aspect of microeconomic reform in Australia. It has been about productivity and strengthening the overall performance of the Australian economy, because we all understand that an efficient and reliable energy sector is the cornerstone of productive activity in Australia. In that context I also remind the House that historically there has been a bipartisan approach to energy market reform. That is because our energy sector has been central to our capacity to attract investment. It also guarantees our ability to employ Australians. We are all very pleased with the level of unemployment in Australia at the moment, which is just over five per cent, and it is the envy of the OECD world.

That is the view not just of the Australian community; I am also pleased to say it is reflected in a recent commentary from the International Energy Association, which said in addressing the Australian energy market that Australia has ‘one of the most transparent and competitive electricity markets in the world and could well serve as a model for other countries’. The reason for that is that since we started this process of reform in the 1980s and 1990s that reform has not only delivered for Australia lower energy costs for industry and households but also added $6 billion to Australia’s GDP. The reform has been driven by the Ministerial Council on Energy, with the support of the private sector. From time to time we focus on key deliverables which are about strengthening microeconomic reform and the performance of our energy market. A recent achievement is the agreement by the Ministerial Council on Energy to establish a long sought after framework of the retail supply of energy going to both gas and electricity. Gas is going to grow in Australia and the need for a national gas market is central to moving to a low-emission economy in the future.

We then go to Energy Customer Framework considerations. Legislation is currently before the South Australian parliament to deliver this key deliverable. This will enhance productivity by allowing companies operating in multiple states to operate on one platform to ensure that different customer systems operating across different states have a key opportunity to move to a uniform approach. We have also been working on the movement of workers across state and territory boundaries. That is very important in emergency situations such as bushfires or floods. Historically this movement has been very difficult because of the different regulatory requirements. We are making good progress with those outcomes.

The Energy Efficiency Opportunities program as central to energy market reform. To the end of 2009 this program had identified savings equivalent to 2.9 per cent of Australia’s energy use. That reduces the need to invest in new generational capacity. Productivity is about ongoing reform and energy is a prime example. I only wish the coalition would front up to the debate on a price on carbon because that is just as important for energy security and market reform.