Alex Gallacher (SA, Australian Labor Party) Share this | Hansard source

As deputy chair of the Senate Economics Legislation Committee, which reviewed the Treasury Laws Amendment (Prohibiting Energy Market Misconduct) Bill 2019, I want to talk about this bill, not about climate change or coal or anything else. It is my view, supported by the documentary evidence, that this appears to be another poorly drafted bill which is full of unintended consequences and creates uncertainty rather than certainty. It is the view of the Law Council that it may be subject to legal challenge, which, ultimately, would negate some of the attempts to prohibit energy market misconduct. I'm not going to make a large contribution. I'll just put a couple of things on the record.

On 31 August 2016 I was in this chamber talking about the only entity to have been taken to court by the regulator and fined. That was Snowy Hydro, which was fined $400,000 and asked to pay $100,000 towards the regulator's costs for not meeting the requirements of the regulator. At that time, that entity was owned by the federal government, the New South Wales government and the Victorian government. That is the only proven case of misconduct in this space and is so to this date. The ACCC and other witnesses were questioned recently at the inquiry hearing in Sydney. I asked whether any other entity in the marketplace had been found to have done the wrong thing, and the answer was no. It is only Snowy Hydro, which coincidentally was owned at the time by three governments. The only exception to that is that the ACCC found that a couple of government owned generators and operators in Queensland appeared to be heaving a bit of money into the state government's coffers at the expense of consumers.

Here we have what is called 'big stick' legislation, whose main customers appear to be either a state government or the federal government, because Snowy Hydro when it gets to the upgrade will be one of the largest players in the marketplace, and is, coincidentally, the only one that has ever been caught doing the wrong thing. Red Energy, which is the energy arm of Snowy Hydro, makes more from electricity generation than AGL, which incidentally does a whole lot more supply. If there is any prohibited conduct going on, the minister may be well advised to have a look in his own direction at areas which he can control quite simply and easily. The evidence to the committee was not that there was a significant amount of misconduct going on amongst the retailers generally. What was found was that smaller retailers, with higher cost structures, were being used to set a higher floor price than perhaps those who had a greater ability to set a lower floor price. That's what the ACCC found.

So it's a really interesting piece of legislation. On the balance of the submissions—and I'm not talking about a dissenting report; I'm talking about the Economics Legislation Committee's report—there isn't a lot of support coming from all of the disparate sectors that are involved in this space, and there is not a lot of unanimity about the effect that this bill will have. The minister in his own tabling speech said it was unlikely to be used. When you look at the way it would be used by the Treasurer and the other entities in the legislation and at the legal challenges that any or all of those actions may face, you see it's unlikely to be used on a great number of occasions, because the prohibited misconduct would have to be identified, proved and actioned in quite a discreet way. Once again, I put on the record that the only people that have actually fallen foul of the regulations in this space are Snowy Hydro, and there have been some adverse comments about the conduct of a Queensland government owned generator or two in that space. The industry doesn't appear to have fallen foul of the regulator.

Why this big stick legislation is required is a little unclear to the industry, and that's their submission back to the committee and faithfully captured in the committee report. We will support this legislation because, in opposition, there's not a lot you can do other than try to make things a little better. We have tried to make things better in that, if there is a divestiture of a coal-fired power plant, workers will be protected in that divestiture and communities will be protected in that divestiture. We well know—you and I, Mr Acting Deputy President Fawcett—that the town of Port Augusta went through a closing of a coal-fired plant, and we know the disruption that can cause for a community and the length of time it takes people to get over it. We'll be hoping that those sorts of protections are agreed and in the legislation, and with that I will cease my comments.