Slade Brockman (WA, Liberal Party) Share this | Hansard source

I too rise to take note, particularly of the answer from Senator Farrell about Labor's policy on gas. We've just heard there from Senator Ayres why this government has not got a clue about handling the gas market. They can't just look at the last 3,000 years of economic history and recognise the fact that what they were doing was not going to have a positive impact on the gas market. In fact, it was highly likely, you could have predicted, that it would have a negative impact on the gas market. And guess what. I predicted it.

Three weeks before we were recalled to parliament—and those opposite who are laughing can go back and look in the West AustralianI wrote an op-ed because this idea of a gas price cap was being floated around by a few low-level Labor ministers, I thought: 'No, they're not crazy enough to do that. They're not crazy enough to ignore 3,000 years of economic history and impose a price to try to get gas flowing. They're not that silly.' So I wrote what I thought was a tongue-in-cheek op-ed, and it turned out that three weeks later we were recalled to parliament to pass gas price caps. I said in that op-ed—and everybody with an ounce of economic sense said at the time and have said subsequently—that a gas price is not going to do what the government says it supposedly wants to do, which is put downward pressure on gas prices and, therefore, energy prices. In fact, it's done precisely the opposite, which is what I said in my op-ed and what a lot of very-well-trained economists said, because this stuff isn't actually rocket science. There are 3,000 years of economic history, going back to ancient Greece, that shows that price caps of any sort are entirely counterproductive.

And what do we have just a months later? Anyone with any sense knew that, by putting a price cap in place, you would slow down investment, put a lot of uncertainty in the market and increase volatility in the market, and in the end you would actually put prices up. Guess what we got from the Australian Energy Regulator's draft default market offer the last week. This is frightening. It's not a matter of joking, because this impacts household power bills. It impacts small businesses—mostly on the east coast, and I will say a little bit more about that later—throughout the national energy market.

What has the Australian regulator said about the default market offer? There will be electricity price rises in South Australia, New South Wales and South-East Queensland of around 24 per cent. In Victoria, it will be 31 per cent. That's a doubling every three years—a 31 per cent increase in one year. This is at the same time that those same families and small businesses aren't just being hit with massive spikes in their energy prices; they're also being hit by massive spikes in the cost of their borrowings. A lot of small businesses need to run an overdraft. They need to run debt in order to operate, and we've seen the fastest rise in interest rates pretty much in the history of Australia. Families have seen their mortgage repayments go up by in many cases a thousand dollars a month. This has a real, direct impact on Australian families and Australian businesses, and those opposite think it's a joke to recall parliament and pass legislation to impose price caps for a political sugar hit to be seen to be doing something when actual fact they knew it would be entirely counterproductive, if they were being at all honest with themselves.

In Western Australia we're a little lucky. We have large domestic gas availability and obviously we export the vast majority of Australia's gas, and that's thanks to the Court government's decision in the 1970s.