Gary Humphries (ACT, Liberal Party, Shadow Parliamentary Secretary for Defence Materiel) Share this | Hansard source

This bill amends legislation to apply the National Energy Retail Law, NERL, the National Energy Retail Rules and the National Energy Retail Regulations as Commonwealth law to facilitate its nationally consistent and effective application. It also provides for conferral of functions and powers on Commonwealth bodies acting within the framework, including the Australian Energy Regulator and the Australian Competition Tribunal, and provides for judicial review of decisions of the Energy Regulator under the National Energy Retail Law. This bill ensures that the Australian Energy Market Act 2004 operates as the Commonwealth's application act for the National Energy Retail Law set out in the schedule to the National Energy Retail Law (South Australia) Act 2011, which received royal assent on 17 March 2011. It also makes necessary consequential changes to other Commonwealth legislation.

The NERL is the final major component of the national energy market reform program agreed by the Council of Australian Governments in response to the 2002 COAG energy market review, Towards a truly national and efficient energy market, and set out in the Australian Energy Market Agreement. The bill gives administrative and legislative effect to part of a reform program agreed by COAG. Participating jurisdictions have committed to commencing legislation applying the NERL by 1 July, 2012. The amendments to Commonwealth legislation in this bill will ensure that relevant Commonwealth bodies which are conferred with functions, powers and duties under the NERL, including the AER, are able to perform those functions and duties and exercise those powers from the commencement date. The coalition is pleased to support this bill which continues the work of the previous coalition government and that of my colleague the Hon. Ian Macfarlane.

Unfortunately, there is every sign that the important work commenced by the coalition in 2002 is being countered by other aspects of this government's energy policy. Since the Labor government came to power, electricity prices across Australia have increased on average by about 50 per cent and gas prices have increased on average by about 30 per cent. It is forecast that electricity prices will double by 2020, even before this government's new policy proposals are taken into account. It is therefore quite amazing that this government is so doggedly pursuing a policy that has as its objective forcing up the price of energy and eroding the benefits Australians have enjoyed as a result of access to affordable, reliable and increasingly competitive supplies of electricity.

This is exactly what the Labor-Greens carbon tax will do: it will force up the price of electricity by another 20 per cent over the increases already in the pipeline. The carbon tax, which will impact on individual Australians at a rate 400 times greater than that of the most comparable scheme—that in Europe—will force a dramatic increase in electricity prices and place our industries at competitive disadvantage.

The carbon tax also launches an assault on the very industry that provides the majority of Australia's base load electricity, the coal industry. It will dramatically downgrade the value of Queensland and New South Wales electricity assets without providing any compensation. The vast majority of the government's $5.5 billion compensation package for electricity generators will go to the highly emitting brown coal generators in Victoria and South Australia. An ACIL Tasman report released by the Baillieu government puts the figure for the Victorian generators at 97 per cent of the compensation package. This leaves Queensland and New South Wales out in the cold when it comes to their black coal fired generators, despite the fact that they are facing multibillion dollar write-downs in the value of their assets because of the tax. The O'Farrell government in New South Wales has estimated that its black coal fired power stations will suffer a loss of value of at least $5 billion because of the Gillard government's carbon tax. Even in Queensland, Labor Premier Anna Bligh has complained about the lack of compensation for Queensland assets, which she claims will be written down by about $1.7 billion. In fact, it will almost certainly be much more than that.

The significant losses in value for generators have important ramifications for energy security and will also drive up electricity prices for consumers. In the context of this bill, which the coalition supports, it must be asked what the value is of ongoing energy market reform when the government is simultaneously engaged in energy market sabotage. And all this is at a time when the government's long promised energy white paper—due in 2009—has still not been delivered.

I would submit that the energy market needs two things. It needs the confidence of knowing where the reforms are headed and the confidence of knowing that its investments are safe. At this point in time, it has neither of those things. What it has is policy chaos and the promise of new taxes. Despite the reforms continued by this bill, we have a government that has shown no commitment to the ethos—a reliable and low-cost energy sector—that has underpinned our competitive advantage for a very long time. The coalition supports this bill because we are committed to keeping energy prices low for industry and for households. Whether any aspect of this is supported by the Gillard government will not become clear until it releases its white paper, for which we continue to wait. However, the evidence, from the debate underway in the other place, is that its commitment is very much against the grain of the subject matter of this bill.