David Fawcett (SA, Liberal Party) Share this | Link to this | Hansard source

My question is to the Minister representing the Minister for the Environment and Energy, Senator Birmingham. Will the minister advise the Senate what the government is doing to ensure an affordable and reliable supply of energy to Australian households and businesses?

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

I thank Senator Fawcett for that question—a question of real importance to Australian households and businesses and an issue that directly affects them. That's why the Turnbull government is taking decisive action to support Australian families and Australian businesses with their electricity bills. It's why our action has included reforms that are guaranteeing and seeing power companies provide better deals to their consumers, securing domestic gas supply for Australia, and putting downward pressure on network costs to stop the gaming of the energy markets by network operators.

And, of course, we are now proposing, and have been proposing, much more than that through the adoption of the National Energy Guarantee, as recommended by the Energy Security Board. That will help ensure an end to energy subsidies that are passed on to consumers by way of higher consumer prices. It will create a more level playing field that ensures all types of energy are part of Australia's energy mix and are treated fairly according to their reliability, their affordability and their contribution to emissions; it will provide more certainty for investors, which in turn will lead to more supply and in turn lower prices; and it will reduce volatility, ensuring that reliable energy sources provide power when it's needed.

Together, all of these reforms—reforms that tackle energy supply, energy distribution and energy retailing—are a comprehensive package of measures that the Turnbull government has driven to make sure that Australian households and Australian businesses can have reliable and affordable energy whilst also ensuring that, as a country, we continue to meet our international obligations. What that will mean is that, over the long term, Australian businesses and Australian households can have confidence that when they switch the lights on the lights will go on, that when the bill comes in it will be more affordable, and that they can invest with confidence to create more jobs for more Australians.

Scott Ryan (President) Share this | Link to this | Hansard source

Senator Fawcett, a supplementary question.

David Fawcett (SA, Liberal Party) Share this | Link to this | Hansard source

Can the minister update the Senate as to why energy is so important to our cost of living and to businesses remaining competitive?

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

We appreciate that many Australian households are doing it tough. That's why we want to make sure there is relief for their power bills. We know that many Australian businesses find high power costs a constraint which impacts on their ability to invest, to hire and to provide the wage growth that we all want to see.

That's why we've delivered the measures I outlined before and, importantly, it's why our National Energy Guarantee will see real benefits flow through—real benefits that are modelled to deliver a 23 per cent reduction in wholesale prices. That would make a meaningful difference to small businesses, such as the local supermarket in our home state of South Australia, Senator Fawcett, which would save almost half a million dollars per annum as a result of the National Energy Guarantee. The average household would see a saving of an estimated $400 off their power bill. That's why this policy has been so widely endorsed by consumer organisations, by those representing social welfare groups, by business and even by trade unions, because they all recognise the National Energy Guarantee will make a positive difference for Australia's future.

Scott Ryan (President) Share this | Link to this | Hansard source

Senator Fawcett, a final supplementary question.

David Fawcett (SA, Liberal Party) Share this | Link to this | Hansard source

Can the minister inform the Senate of any challenges facing South Australia's energy system?

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

Sadly, the home state of Senator Fawcett, of me and of Senator Farrell opposite is, of course, the canary in the coalmine when it comes to what has happened with energy, and it's been a sad and sorry story.

Senator Farrell interjecting—

It's no wonder Senator Farrell wants to run interference, because South Australian power prices are 20 per cent more than in the rest of the country. Last year South Australia received around 50 per cent of its power from intermittent renewables, which caused not only reliability issues but extreme price volatility as well. We've seen a state government there which pretends the solution is to have a battery—a battery that will provide less than one per cent of the state's needs on any given day and that will have diesel generators which use some 80,000 litres an hour of diesel, the dirtiest fuel available. It's remarkable that these are the solutions the South Australian Labor government has on offer, whereas we are outlining clear plans to provide reliability and certainty and put downward pressure on prices for households and businesses.