Jonathon Duniam (Tasmania, Liberal Party) Share this | Link to this | Hansard source

My question is to the Minister for Education and Training, representing the Minister for the Environment and Energy, Senator Birmingham. I ask: can the minister update the Senate on the importance of a secure and affordable gas supply for Australian families and businesses?

Simon Birmingham (SA, Liberal Party, Minister for Education and Training) Share this | Link to this | Hansard source

I thank Senator Duniam for his question and for his particular interest in relation to the importance of gas and gas supply in the Australian energy market, which is of course so critical to the operation of many manufacturing businesses as well as to households and businesses across Australia insofar as they impact on electricity prices.

Indeed, wholesale gas prices make up an estimated 15 to 30 per cent of total residential gas bills and household gas bills. These increase with increases in those prices flowing through the market—some five per cent per $2 per gigajoule increase in New South Wales, for example, according to the ACCC. That's why it's important, and that's why the Turnbull government has taken action to ensure that the supply-and-demand imbalance that appeared to be emerging in the Australian gas market is being rectified.

The Prime Minister has secured agreement with the heads of the three big east coast gas companies to ensure that there is sufficient gas supply to meet the projected shortfall in the Australian market and to ensure that there is sufficient gas supply to guarantee that in the future Australian consumers, be they businesses or households, have the gas to meet their needs. Indeed, the commitment from gas companies will see an estimated 54 to 108 additional petajoules of gas come into the Australian gas market. This is incredibly significant because, if you look at gas usage in a regional town, such as Warrnambool or Wollongong, or at a major industrial manufacturer, they would use just one petajoule per annum. The action we are taking is guaranteeing many times that—between some 54 and 108 additional petajoules entering the market.

Doug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | Link to this | Hansard source

At what cost?

Simon Birmingham (SA, Liberal Party, Minister for Education and Training) Share this | Link to this | Hansard source

'At what cost?' Senator Cameron says. Well, what we've seen is that the spot price for gas has come down thanks to the Turnbull government's actions. It's down around $12 a gigajoule now to some $8 a gigajoule. That is significant movement down, and as more supply comes into the market we're confident that it will further drive down prices for Australians. (Time expired)

Stephen Parry (President) Share this | Link to this | Hansard source

Senator Duniam—a supplementary question.

Jonathon Duniam (Tasmania, Liberal Party) Share this | Link to this | Hansard source

I thank the minister for his answer. Can the minister inform the Senate of the main drivers of electricity price increases?

Simon Birmingham (SA, Liberal Party, Minister for Education and Training) Share this | Link to this | Hansard source

I can. Indeed, the report released today by the Australian Competition and Consumer Commission—their preliminary report into retail electricity pricing—demonstrates very clearly that the largest impacts in terms of household and business energy bills, and the largest growth impact on those bills over the last decade, have been related to network costs. I am very pleased that shortly before question time this chamber passed the Turnbull government's legislation to abolish the limited merits review process that the network operators had been gaming. They had been gaming it to the tune of some $6½ billion of extra costs that had been fed into the Australian electricity system because of the abuse of the limited merits review process. It was the Turnbull government which took the action—despite opposition from some states and despite delaying tactics by the Labor Party—to abolish this, which can have some of the most significant impacts on keeping prices down into the future.

Stephen Parry (President) Share this | Link to this | Hansard source

Senator Duniam, a final supplementary question?

Jonathon Duniam (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Can the minister outline what the Turnbull government is doing to help reduce pressure on power bills for Australian households and businesses?

Simon Birmingham (SA, Liberal Party, Minister for Education and Training) Share this | Link to this | Hansard source

We're taking action across every step of the supply chain. In terms of generation, we're taking action to make sure that new dispatchable sources that can bring prices down when it matters, such as pumped hydro, come online in future years. In terms of the networks, which I just spoke about, we have taken action through the abolition of the limited merits review process, delivering, of course, a system that will ensure network operators can no longer game the system. In terms of the retail sphere, we have taken action to guarantee that retailers offer the best deal to consumers and that consumers—around two million households around the country—will be better able to access those best deals around retail opportunities. Also, as the ACCC report highlights, as a coalition government we took the action to abolish the carbon tax, putting real downward movement in electricity prices at the time, as well as making reforms in relation to the Renewable Energy Target to make sure that it was achievable and affordable for the future rather than the exaggerated target that was in place.

Kim Carr (Victoria, Australian Labor Party, Shadow Minister Assisting the Leader for Science) Share this | Link to this | Hansard source

My question is to the minister representing the Prime Minister, Senator Brandis. The outgoing BlueScope CEO, Mr Paul O'Malley, last week told his company's AGM that BlueScope's electricity costs would rise by 93 per cent between 2016 and 2018. Can the minister confirm that, after four years of Liberal-National government, power prices have never been higher?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

They'd be higher with a carbon tax!

George Brandis (Queensland, Liberal Party, Attorney-General) Share this | Link to this | Hansard source

No, Senator Carr, I can't confirm that, nor am I familiar with the observations of the CEO of BlueScope Steel. What I can tell you, Senator Carr, is this: if the Labor Party were in power, electricity prices—both domestic prices and wholesale prices to industry—would be much higher than they are at the moment because, as Senator Cormann reminds me, among many other things, we would have a carbon tax. We would have the carbon tax that the former Labor Prime Minister, Ms Gillard, promised never to introduce and then, in flagrant breach of an election promise, did introduce. It caused the biggest single spike in electricity prices in modern history. That was your legacy, Senator Carr. As I said in response to your colleague Senator Moore, we won't be taking advice or instruction from, of all people, the Labor Party about how to keep electricity prices low, particularly since on your watch we had the fastest rate of growth of electricity prices in modern history, not just because of the carbon tax but significantly because of the carbon tax.

That is why, Senator Carr, the government—the Prime Minister and Mr Frydenberg in particular—are focused, as I said before, on the twin objectives of keeping electricity prices lower than they otherwise would be and ensuring reliability of supply. We will be adopting a suite of policies that are entirely configured to securing those two objectives. Senator Carr, unlike you, we're not driven by ideology. Unlike you, we're not driven by a political imperative to outcompete the Greens. Unlike you, nor are we economically incompetent. We understand that you need policies that will encourage the market to deliver electricity prices at their most affordable level while ensuring reliability and supply, and that is what we're going to do.

Stephen Parry (President) Share this | Link to this | Hansard source

Senator Carr, a supplementary question?

Kim Carr (Victoria, Australian Labor Party, Shadow Minister Assisting the Leader for Science) Share this | Link to this | Hansard source

I repeat, Minister: BlueScope's electricity costs will rise by 93 per cent. The government's commissioned Finkel review found that the clean energy target would save Australians $160 on their power bills. Why has the government failed to implement a price-reducing clean energy target?

George Brandis (Queensland, Liberal Party, Attorney-General) Share this | Link to this | Hansard source

Senator Carr, I think what you ought to be focused on are the policies that will have the most impact on electricity prices, because that is what we are focused on. This debate in Australia—we have seen it in the Senate for years now—has been bedevilled because people have become obsessed with a single policy and have seen in that single policy the only possible way of achieving an outcome.

Well, we're not obsessed with a single policy. We're obsessed with an outcome, and the outcome we're obsessed with is ensuring that electricity prices are lower than they otherwise would be and that supply is reliable. That's what we care about. Senator Carr, you were the minister for industry for a period of years, during which electricity prices had their sharpest upward movement in Australian history. We are not going to repeat your mistakes or the mistakes of the South Australian Labor government. We are going to deliver affordable and reliable electricity.

Stephen Parry (President) Share this | Link to this | Hansard source

Senator Carr, a final supplementary question?

Kim Carr (Victoria, Australian Labor Party, Shadow Minister Assisting the Leader for Science) Share this | Link to this | Hansard source

Why is the Prime Minister giving in to the demands of former Prime Minister Abbott instead of listening to the overwhelming majority of those who support the clean energy target, including the Prime Minister himself, his energy minister, the Chief Scientist, the Business Council of Australia, AiG, Australia's leading energy companies and AEMO's Expert Advisory Panel?

George Brandis (Queensland, Liberal Party, Attorney-General) Share this | Link to this | Hansard source

Senator Carr, in fact the Prime Minister is listening to all of those stakeholder groups and others as well, because we are going to announce an evidence based—

Senator Kim Carr interjecting—

Stephen Parry (President) Share this | Link to this | Hansard source

Order! You've asked your question, Senator Carr.

George Brandis (Queensland, Liberal Party, Attorney-General) Share this | Link to this | Hansard source

economically sensible suite of policies that, as I said to you before, are focused on two objectives: to make electricity as affordable as it can be and to make supply as reliable as it can be. As I said a moment ago, we certainly won't be taking lectures from you, Senator Carr, or your colleagues, who presided over the fastest increase in electricity prices in modern history—who, in the state of South Australia, with their ideological obsession with a 50 per cent renewables target, couldn't even keep the lights on. What an indictment. In a modern, 21st century economy, you couldn't even keep the lights on, because of your obsession with ideology.