Susan McDonald (Queensland, National Party, Shadow Minister for Resources) Share this | Hansard source

or McDONALD () (): Today we are faced with an unpalatable fact: either Labor don't know the consequence of the Treasury Laws Amendment (Energy Price Relief Plan) Bill 2022 and are incompetent, or they do and this is the most malicious piece of legislation that will see gas shortages and increased electricity prices and will drive up unemployment. Be very clear: this is an attack on the resources sector, a sector that currently, through royalties, taxes and investment, is the backbone of our economic strength. It pays for our health system, for much of our education system and much of our roads and infrastructure. Much of what we're going to hear today from the other side completely misunderstands the structure of the Australian economy. If Australians knew what Labor and the Greens were passing today, if they knew what the future holds for them in the very near future, they would rightly be devastated because this legislation is selling out their future.

This is one of the largest and most significant government interventions that we have seen in the market for decades. The Albanese Labor government is too arrogant and too deceitful to allow proper consultation. It was still in the oven being baked last night, and it's come out completely uncooked. History has shown time and time again that price caps will only result in supply shortages, and that leads to price rises. This is economics 101. Australians need to brace for blackouts, higher prices and investment uncertainty in the months to come. This is panicked policy on the run. It's full of loopholes and unintended consequences. It raises more questions than it answers. It provides less certainty. I'll be asking questions on this today, as I will before debate and discussion is gagged. It certainly won't deliver the $275 electricity cut that was promised 97 times by the Prime Minister. It will actually still mean that electricity prices will increase by 23 per cent. It will lead to energy rationing and blackouts. Labor will continue to tell you how important manufacturing jobs are to them, but this will not be about saving manufacturing jobs. This legislation will undermine those jobs. This is a disgraceful betrayal of all Australians.

This legislation is a policy failure. Despite nine years in opposition and six months in government to develop this policy proposal that they keep saying should have been made, instead, a week before Christmas, the PM announces a policy and, six days later, here we are considering legislation that the ink is still wet on. The Treasurer, who has never run a business, now wants to run the entire Australian gas industry, and through his comments this morning we see again how little the Treasurer understands his own legislation in this place. It reaches far beyond a 12-month price cap. It creates a permanent cap on rates of return. This is a diabolical deal between the Greens and Labor. This massive overreach gives the government power to set the price and force companies to provide or not provide gas supply, and it allows the Treasurer the power to decide who gets gas in this new gas shortfall environment.

Energy experts have already been quoted as saying that this is the single worst piece of energy policy in the world in the last 20 years. That's after almost 20 years of looking at global energy markets, and despite staunch competition from many other dreadful policies around the world. That's not a competition that we want to win. The damage has already started. Nearly all gas contracting has shrivelled up in the last few days. The unprecedented market intervention that's been announced risks driving investment out of the system. This is the part that the Greens and Labor do not understand: the incredibly competitive environment that we live in for investment dollars.

The Prime Minister had a lot to say before the election on how under his government we would do things differently. As recently as March he was saying: 'I want proper process. I want to consult people.' Yet we are seeing legislation that the Greens and the crossbench agreed to support before they'd even seen the words on the page. The unintended consequences of passing this legislation in haste are deeply concerning, and I guarantee you, Mr Acting Deputy President, that we will be back to make amendments.

I mentioned that this bill will delegate power to the Treasurer to make broad-ranging regulations to control pricing, contracting, and purchasing activities in the gas market. It reaches far beyond a 12-month price cap. Such market intervention will result in a permanent cap on rates of return, something that even the worst tin-pot autocrats haven't imposed on their upstream resources sector for fear of strangling investment and supply. In Europe currently, guess which jobs are going? They're manufacturing jobs, because there is not a Treasurer in the world who will choose to supply gas to manufacturers, rather than to households to use for cooking, heating and living their lives. So I say to all the manufacturing companies who are greeting this legislation with joy: be very, very afraid, because you will not be at the top of the Treasurer's Christmas list when it comes to allocating gas.

We know that the answer to reducing the cost of energy, the cost of gas, is more supply. We are a nation blessed with resources, and the arrangement that this nation has with investors, both domestically and abroad, is that the investors take the risk. They provide the capital, the workforce and the planning approvals to access our resources, and in return they pay royalties, company tax and PAYG taxes and they invest in operational capital investments that flow to small Australian businesses—businesses in my part of the world, regional Australia.

This rushed legislation has loopholes and provides no clear solution to this crisis. The mandatory code of conduct does not include retailers. Normally, the Greens would want to know what these gaps were. They would be keen to make sure that they were part of passing reasonable and good legislation. Instead, they have allowed this bill to be rushed through, with unintended consequences that we will all regret.

This breach of faith, in bringing legislation to the House and then the Senate with absolutely no oversight, is not new. The gas companies earlier this year were asked to join a heads of agreement to cover what was expected to be a supply shortfall in the market. They did that; 157 petajoules of gas was agreed to be supplied to the market. But now, only a few months later, they have been demonised, and it's been another breach of faith for important investors in our economy.

We know that Ministers Bowen and Husic have no desire to support a gas industry. Minister Bowen called a gas-led recovery BS. Husic called producers greedy. The Greens and teals don't want cheaper gas; we've already heard they hate gas. But their support of this policy will increase prices and hurt the very people who they proclaim they want to assist. They have no understanding of reality, the competition for investment that we are under and the huge amounts of taxes that are paid in this nation.

There is no industry support for this legislation. Labor has ignored all expert advice. Regional towns like Roma and Miles have prospered due to the gas industry. The agricultural people in that region have prospered due to more jobs and support to stay on their farms. Those regional jobs are threatened. Family businesses are at risk. Labor does not care about these communities. They're looking for a headline, not good policy. This is cheap politics from some back-room boys, and it is not about the future.

We are an export nation. We rely on investment from super funds and from offshore to make the most of our extraordinary assets. This legislation has run an icy finger down the spine of every project in this country, every well-paying job and every GST or other tax dollar that currently goes to supporting health and education and infrastructure in this nation. We support household relief. We asked to split this bill to allow for that part to be passed singly, but Labor voted that down, because they are more interested in playing politics than in good policy.

Labor's modelling shows that electricity prices will go up next year by 23 per cent. There will be no reduction of $275, as promised 97 times, and the retailers, which will not be included in the mandatory code of conduct, can still game the spot market with high prices. Credit Suisse has warned gas price fixing will increase the risk of blackouts as early as 2023. EnergyQuest are warning of 19 years of supply now being stranded. Price caps have been proven to lead to shortfalls. The lack of investment and the lack of exploration and development mean a lack of supply. A shrinking supply will mean blackouts, will mean gas rationing and will mean higher demand and higher prices.

We've heard several times about this all being the fault of the war in Ukraine. This is an absolutely outrageous conclusion to draw. Our energy market and the European energy market are literally thousands of miles apart. The root cause of the energy crisis in Australia is the lack of reliable energy sources, the low renewable energy generation and the lack of baseload power. We saw last winter the spike in prices when coal-fired power stations, which had not been able to be maintained during COVID—and which, let's be frank, had received clear signals from Labor about their lack of support—had to go into maintenance. Next year, we expect the Liddell coal-fired power station to go offline. What do we think is going to happen then? The Greens might also be interested to know that the international spot price today is $50. The Wallumbilla price is $13.90. We are not linked markets. You have to stop repeating that lie.

We know that price caps, price fixing and market intervention continually fail. Argentina and the United States both attempted this. Both ended up with greater reliance on overseas supply and higher prices and finally had to incentivise energy providers—resource companies—to come back to the market.

Labor is at war with the resources sector. Investment confidence is plummeting due to the layering of legislation that's been brought before this House—the damaging industrial relations legislation, the EPBC projects that have been called in, the 44 gas projects being reviewed under NOPSEMA, the $10 million funding for the EDO and the new EPA. These are all things that lead to greater investment uncertainty.

So Labor is promising that the lights will stay on, that the electricity prices will go down and that your job will be secure and better paid. They promised 97 times that the power price would reduce for you by $275. So when the lights go out, when you can't turn the gas on, when the bills go up, when your job comes under threat and unemployment rises, you will know who to blame. These are the inevitable outcomes that Labor is not being honest with Australia about.