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representatives vote 2022-12-15#6
Edited by
mackay staff
on
2022-12-16 11:22:17
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Title
Bills — Treasury Laws Amendment (Energy Price Relief Plan) Bill 2022; Consideration in Detail- Treasury Laws Amendment (Energy Price Relief Plan) Bill 2022 - Consideration in Detail - Agree with the bill
Description
<p class="speaker">Kylea Tink</p><p>I move the amendments circulated in my name together:</p>-
- The majority voted in favour of a [motion](https://www.openaustralia.org.au/debate/?id=2022-12-15.40.6) to agree with the bill. The House will [now decide](https://www.openaustralia.org.au/debates/?id=2022-12-15.42.1) on whether to pass the bill, which is known as reading the bill as a [third time](https://peo.gov.au/understand-our-parliament/how-parliament-works/bills-and-laws/making-a-law-in-the-australian-parliament/).
- ### What does the bill do?
- The [bill](https://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id:legislation/billhome/r6969) was put through parliament so quickly that the parliamentary library has not had time to summarise what it does. The [explanatory memorandum](https://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id:legislation/billhome/display.w3p;query=Id%3A%22legislation%2Fems%2Fr6969_ems_1290e102-106a-42df-acb3-93e7aeb05a37%22;rec=0) - which is prepared by the Government, who introduced the bill - describes it like this:
- > *Schedule 1 to the Bill inserts Part IVBB into the CCA [Competition and Consumer Act 2010] to create an overarching framework to enable the Government to regulate the gas market. Two kinds of legislative instruments will underpin the new framework; gas market codes and gas market emergency price orders. These instruments are collectively referred to as gas market instruments.*
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- > *First, the Governor-General may, through regulations, make gas market codes. Gas market codes may prescribe a broad range of matters relating to the supply and acquisition of gas commodities, including:*
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- > * *regulating dealings between persons who supply or acquire a gas commodity, including negotiations between them; and*
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- > * *dealing with and resolving disputes or complaints between persons who supply or acquire a gas commodity.*
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- > *Second, the Minister may make gas market emergency price orders regulating the terms on which gas commodities are supplied or acquired, specifically including price. A gas market emergency price order is designed to provide short-term relief from the current energy crisis. The Minister’s power to make gas market emergency price orders sunsets 12 months after the commencement of any order, or 12 months after commencement of the enabling provision in Schedule 1 to the Bill if no order is made. The Minister must consult the ACCC [Australian Competition and Consumer Commission] prior to making a gas market emergency price order, and an order is automatically repealed after 12 months. Gas market emergency price orders provide the basis for emergency price regulation of gas, primarily to reduce domestic prices and address the current energy crisis.*
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- > *Schedule 1 to the Bill includes a range of mechanisms that are aimed at detecting, deterring and addressing non-compliance with Part IVBB and gas market instruments. The ACCC has the power to require the production of certain information and documents, investigate suspected non-compliance and utilise a range of sanctions that are appropriate and proportionate to the non-compliance.*
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- > *The consequences of contravening relevant provisions of Part IVBB or a gas market instrument include civil penalties, infringement notices, warning notices and orders under Part VI.*
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- > *Schedule 1 to the Bill prohibits avoidance schemes that are designed to avoid the application of a civil penalty provision of a gas market instrument.*
<p class="italic">(1) Schedule 1, item 2, page 12 (line 24), omit "12 months", substitute "18 months".</p><p class="italic">(2) Schedule 1, item 2, page 12 (line 25), omit "12 months", substitute "18 months".</p><p class="italic">(3) Schedule 1, item 2, page 12 (line 28), omit "12 months", substitute "18 months".</p><p>These are quite extraordinary times that we find ourselves in, and it's unfortunate that this is being pursued so close to the end of the year. Let's make no mistake: we're here today due to a sustained and consistent failure of past federal governments to look beyond the immediate political term and identify and navigate significant reform to bring our country to a better place overall. The blame cannot merely be shifted offshore to a Russian war.</p><p>With that said, the legislation we have before us today, the Treasury Laws Amendment (Energy Price Relief Plan) Bill 2022, is the instrument that is being offered and, given its potential impact and operation, it's important that it's properly scrutinised. Concerningly, from looking at media reports, it appears that many Australians may be falsely led to believe the reason this legislation is so urgent is that it is seeking to deliver cost relief for Australians prior to Christmas. The truth of this legislation is that this is not the case. The legislation we are discussing today will affect the market price available for gas and coal from mid-Q1 next year, with any impact not felt until Q2 2023. This legislation enables the flow of dollar-matched funds from the federal government via state governments to the energy providers themselves, with the end effect being the creation of an ecosystem where, rather than seeing a reduction in their bills, consumers will feel no increase or no additional pain. Fundamentally, it's akin to paying off one group to try and soften the effects on another.</p><p>Sadly, the issues we are facing are not ones that were unexpected. Speaking on behalf of the people of North Sydney, I say we're disappointed that we find ourselves at this time of year trying to rapidly and critically review a significant piece of legislation, with very little time to fully consult with those who need to be recognised as being most impacted. When it comes to the views of the people of North Sydney, though, I can confirm that residents are worried about the rising cost of energy bills, they overwhelmingly support a windfall profits tax on fossil fuels, they do not support any compensation flowing from the government to gas or coal companies as part of this package, and they have huge enthusiasm for using this opportunity to fast-track the renewable rollout.</p><p>This legislation will create a situation where the federal government is working with the eastern states in a dollar-matching scenario to effectively subsidise the cost of energy in a number of areas. Exactly how this will be done is still largely unknown, as the processes around distribution will be left to the state governments. I am moving these amendments today to extend the gas market energy price order from 12 months to 18 months to enable small to medium-sized energy providers to have the certainty they need to secure favourable contract terms.</p><p>Ultimately, the most important way we can reduce emissions across our country is to have residents and businesses buy their electricity from retailers of renewable electricity. The reality is that these are the providers driving rapid transition to true green energy for households. At present, smaller electricity retailers who try to do the right thing by contracting their supply from renewable generators are being impacted by the wholesale price rises, and a number have stopped taking new customers. While the proposed legislation goes some way to addressing this, by lowering wholesale prices for renewably backed small to medium-sized electricity retailers, the 12-month cap on gas prices creates too much uncertainty for them to reliably negotiate commercially competitive binding contracts. Setting the cap to 18 months would provide sufficient time for small retailers to have long enough price certainty to lock their hedge contracts and deliver lower costs for consumers. This will help keep small retailers in the game for market diversity and consumer choice.</p><p>Ultimately, the number of unknown factors relating to this legislation is still significant, and when looking at it objectively we must recognise this is yet another example of short-term problem solving rather than significant, long-term positive reform. In the longer term, for us to keep global warming below 1.5 degrees, we must do everything we can to transition as quickly as possible away from fossil fuels. This is an opportunity for the government to look more holistically at the role fossil fuels play in our society and for us to move away from them.</p><p>As a final cautionary note, I would also like to sound the potential for this intervention to be used as a cover for faster approval for new coal and gas projects, as has been the case in New South Wales. In the case of the amendment I'm moving today, my support for this bill is given on the condition that it does indeed enable us to transition more quickly to a renewable and sustainable future, and it should not be mistaken for support for propping up industries of the past like coal and gas. We must remain squarely focused on an orderly and ambitious transition to a clean energy future.</p> <p class="speaker">Jim Chalmers</p><p>I want to acknowledge the engagement by the crossbench and also the amendment just moved then by the honourable member. I also want to say a couple of things about the amendment moved earlier on by the member for Kooyong. The government won't be supporting the member for North Sydney's amendment, but we do have the opportunity with the six-month review of the $12 temporary cap to make sure that it's working as intended and that we've got the time frames right. Obviously around that time, as we review that cap, we will engage with the member and with other interested parties to make sure that the cap is working as it's intended.</p><p>I want to thank the member for Kooyong for the conversations that we've had about her helpful suggestion that the ACCC make public some of the advice that we've received about the arrangements for the gas industry. We weren't able to support it in the second reading amendment stage a moment ago, but we will look to provide some information from the ACCC to the public and to the member so that people can consider that on its own merits as well. I'm in discussions with the ACCC right now about the best way to facilitate that. Thank you to the member for Kooyong and the member for North Sydney for the suggestions that they've made, and also to everyone involved in the debate so far. I'm aware that this isn't a summing up, but this is the best opportunity to provide our view on a couple of the amendments that were made.</p><p>Obviously it's become clearer in the last little while that what the opposition intends to do is abandon the workers, industries, pensioners and small businesses of this country. Shortly, when the bells ring, those opposite will be voting for higher energy prices and for no household assistance for Australian families, pensioners and small businesses. The position that we heard put by those opposite is riddled with ridiculous contradiction after ridiculous contradiction. At the same time, simultaneously, those opposite have said that we should have moved quicker on this but that we're moving too fast and it needs to go off to a committee. They've said that they oppose it because they didn't have time to read it, and at the same time they're saying that they oppose it because they've read it. They come up one after another after another and say prices are too high, but they refuse to do anything about it. It is one ridiculous contradiction after another. That is for just one reason: all these excuses, all these alibis, are all about covering up for a decade of policy failure that continues today and that has the member for Hume's fingerprints all over it. The decade of failure we've seen from those opposite has left us more vulnerable to these kinds of shocks we're seeing in the international energy markets. With their vote, and with their failures over a decade in government, they have left Australians and Australian industries more vulnerable. It is left to us, working with the crossbench, to ensure we are doing what we can to take some of the edge off these high and rising prices.</p><p>Let's be clear: the Australian people expect us to act in their interests here, and they are watching. They will know who stood up for them in this place today, and they will know who sold them out.</p> <p class="speaker">Opposition Members</p><p>Opposition members interjecting—</p> <p class="speaker">Jim Chalmers</p><p>A reminder to members who are interjecting that <i>Hansard</i> records the names. The people will know who stood up for Australians and their industries and who didn't in this place today.</p><p>We know that this is a complex issue. Some of the issues in the energy markets have been building for some time, and they've been exacerbated by a war in Europe; everyone knows that. The solutions are complex as well, if we're frank about it. But the proposition for this parliament is very simple today, and the clock is ticking on those opposite. We can support energy bill relief, or you can oppose it. We can protect our manufacturing industry, or you can destroy it. We can save Australian jobs, or you can surrender Australian jobs with your vote today. We stand for families and pensioners, for Australian industries and for Australian jobs. Let's get this to the Senate and let's get this done. <i>(Time expired)</i></p> <p class="speaker">Milton Dick</p><p>The time for this debate has concluded. The question is that the amendments be disagreed to.</p><p>Question agreed to.</p> <p class="speaker">Angus Taylor</p><p>As I said earlier, this has been a shambolic process from those opposite. It is shambolic legislation, with shambolic ministers, and it will deliver shambolic outcomes. I am going to spend a moment talking about some of those outcomes. Hugo Chalmers, over there, is going to have complete control—</p> <p class="speaker">Milton Dick</p><p>Order! The member for Hume will refer to members by their correct title. Of all people, he knows that is the rule in this place.</p> <p class="speaker">Angus Taylor</p><p>It is an absolutely important rule and it should be applied consistently; I agree.</p><p>The Treasurer, over there, will be given autocratic powers under this legislation. Right at the heart of that is an aggressive price cap. But the bad news for the Treasurer is history, application and the theory all tell us that aggressive price caps are bad for consumers and make customers worse off.</p><p>Let me take those opposite through the theory, the application and the history on exactly this issue. I go right back to macroeconomics from the 1980s, with this University of Sydney textbook. I will point out that the Minister for Climate Change and Energy was there, educated perhaps with this textbook by Jack Hirshleifer, back in the 1990s, as was, ostensibly at least, the Prime Minister. On page 231 there is a wonderful exposition of aggressive price caps. The textbook says: 'Supplies will be lost, leaving less available for consumers.' It goes on to say: 'The cumulative effect may be a breakdown of legitimate trade', and then it goes on to document that this will make consumers worse off, not better off.</p><p>When we look at history, we see exactly this. Of course, those who fail to learn from history are doomed to repeat it. In the 1970s, the US president, Nixon at the time, imposed a 90-day price cap. It was a complete disaster, triggering stagflation. It was ultimately a disaster within the US economy. Gough Whitlam sought to replicate that in 1973 and took it to a referendum, and the Australian people rejected it. They rejected it because queueing up to get your petrol, being rationed, was not what they wanted. Ultimately, the costs to consumers were higher than was worthwhile to the Australian public.</p><p>Those opposite are failing to listen to experts and the industry about what will happen as a result of this legislation. I look at one of the industry players, who said on 12 December in the<i> AFR</i>, 'This reckless free market intervention by the government will divert investment away,' and, as a result, reduce supply. Now, what happens when you reduce supply? Prices go up for consumers. What's remarkable about this legislation is that, with this autocratic legislation they—including the Treasurer there—are controlling the price from the producers, but they're ignoring the consumers. There's no impact on bringing down prices for consumers in this legislation. It's all about their disdain for the producers.</p><p>Let me talk a little bit more about what some of the other producers have said. Meg O'Neill, the CEO of Woodside, one of the major producers of gas, in the Bass Strait, has said it will 'make it difficult for industry to economically invest' to deliver supply. That's what she said. The supply is simply not going to be there. She goes on to say that 'the unprecedented market intervention announced risks driving investment out of the system'. We've heard Credit Suisse say in recent days:</p><p class="italic">The damage has already started: nearly all gas contracting has shrivelled up in the last few days.</p><p>This is my question to the minister. The media release stated that the average Australian family 'would be $230 worse off next year if we do not take action'. What modelling was undertaken by the Treasury to provide this figure? Will the government commit to tabling that modelling?</p> <p class='motion-notice motion-notice-truncated'>Long debate text truncated.</p>-
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