Parliament and Speeches

Selected speeches from Parliament. For more speeches and other work in Parliament, visit Hansard.

Big Stick Legislation Speech

November 11, 2019

Tonight I also rise to make a contribution on the Treasury Laws Amendment (Prohibiting Energy Market Misconduct) Bill 2019, otherwise known as the government's 'big stick'. During the 45th Parliament the Labor Party were very strongly and rightly critical of this legislation. It seriously risked the privatisation of publicly owned electricity generators. The bill introduced into this parliament is different, and the government has gone some way to addressing the concerns raised by Labor, particularly in relation to privatisation. So we're supportive of the bill.

But let's be clear: even with the passage of this legislation, the government, after some 17 failed attempts, will still not have a coherent overarching energy or climate change policy that would drive investment, reduce emissions or go any way at all towards reducing household energy costs. Let's be clear: that is not what this bill can or will deliver. Nor does it address climate change, the effects of which have been so hotly and devastatingly realised by too many Australians in recent days. This is something that government after government has been forewarned about, and this government has failed to heed the call. We have here a tired government that has failed to get this right and has failed at every turn when it comes to these questions.

The ACCC undertook a lengthy examination of the retail electricity market and specifically did not recommend legislation of this kind—not at all. They deliberately recommended against this kind of divestiture power, just as Professor Ian Harper did previously in his review of competition policy. We've had six years of reviews and we've had solid advice, and the Liberals and Nationals continue to be stumped on energy—another classic example of the coalition policy machine at full steam!

Perhaps the only reason they did pick this up was the tantalising idea that they might be able to intervene to retain coal-fired power stations. But let's look at what's really going on with coal-fired power around the country. I'll use my home state of WA as an example. The Muja Power Station, which is our only coal-fired power station in Western Australia, has had two units close already. Keeping Muja C open is estimated to cost WA taxpayers at least an additional $350 million. That means it will be staged for retirement from October 2022. It is also why a foresighted government which is actively engaged in these issues is looking at transition plans for the local community, where they've got an Industry Attraction Team, a $60 million Industry Attraction and Development Fund and a $20 million Collie Futures Fund to drive economic opportunities and jobs in Collie. What did the people of Collie say to me when I visited there just the week before last? They expressed their extreme concern about the fact that this government does not have a coherent energy policy and they said that the way the government frames energy debates as coal versus renewables does nothing to serve the community of Collie—let alone the communities around places like Liddell or anywhere else in the country. So it's high time the government picked up their game and really thought about what kind of just transition our nation needs.

We know that the many and various iterations of this bill have been viewed by business groups as well as energy users and energy suppliers over time with some criticism. But we note that, since the May election, business groups have changed their views and have been seeking to work with the government. Labor wants to do the same, in the spirit of being a constructive opposition—in the spirit of being constructive, given we're not in government—and I guess if this is all that you can put forward, then it is what we have left to constructively deal with. With this iteration of the bill, the government seems to have minimised some of the ministerial power that would have been able to be exercised under this bill and has allayed some of our concerns about the impact of potential ministerial overreach. We see that the ACCC, as a legislated Commonwealth body, will play a significant role in protecting the interests of consumers, as, of course, does the Federal Court. We've long had concerns about overreach on the part of government ministers, so we welcome the changes to the bill in this respect.

As a West Australian, I'm also particularly keen to ensure that publicly owned electricity assets remain in public hands. The Muja power station, which I was just speaking of, is a publicly owned asset. Western Australia has many publicly owned electricity assets—generation, retail and transmission. But we have in the Liberal Party a party addicted to the privatisation of electricity. That went really well for Colin Barnett back in 2017—not! The last thing we want to see is the forcible divestiture of publicly owned electricity assets and the transfer of those assets to private companies. That's why I'm very glad that the member for Kennedy and Labor identified the significant loopholes in the original version of the bill that would have allowed for the divestiture of publicly owned assets.

Australians were assured by the government that there would be more choice and better prices and competition in the market. However, I think the majority of Australian consumers know that privatisation in the energy market has tended to work better for companies than it has for them as consumers. This is born out from experience of Western Australia compared to the eastern states. We've also experienced electricity price increases with the changes with required investment in the grid and for generation, but nothing like what we've seen in other places. Labor has successfully closed the loophole in this legislation to ensure that, if the operation of legislation results in the divestiture of a publicly owned asset, it can only be divested to another publicly owned asset with the same or greater level of public ownership. We are pleased that the government have agreed to our amendments and that we've been able to work constructively with them. Our community should rightly expect careful management of our nation's essential services.

As was noted in Labor's additional comments to the Senate Economic Committee's report on this bill, we hold serious concerns about the impact of this bill on workers, particularly for those on non-registered worker agreements. With the introduction of new energy technologies and the inevitable closure of legacy generation assets—and there are good examples in WA—as they reach their end of design life, the energy sector is experiencing significant change and a period of adjustment. It is not the simplest time to be progressing this bill. The Australian Energy Market Operator has said that, over the next 10 years, it's expected that 12 legacy coal-fired power stations are likely to close and to reach the end of their life. This is already happening, as you can see by the existing changes in WA.

Unions like the CFMMEU and the ETU have rightly rung the bell on this issue, which, under the functioning of this bill, coupled with the process of plant closures, could adversely affect members and workers in the sector. In evidence to the committee the ETU told the Senate that a divestiture order applied to an ageing generator scheduled to close:

… puts at risk all of the good work that may have been done in planning to minimise the impacts of the closure and the disruption to the community.

In a written submission to the committee the CFMMEU raised similar concerns, citing the example of Liddell:

… the commitment made by AGL Energy Ltd to "no forced retrenchments" with respect to the retirement of the Liddell power station. This means the company will, inter alia, rely on employee retirements, voluntary redundancies, redeployment to the nearby Bayswater power station and redeployment to other activities at the Liddell site.

This is a reasonable outcome, given the closure of a workplace, but the agreement between AGL and the union, as the employer representatives of the Liddell workers, is not a registered agreement under the Fair Work Act. The agreement, which for all intents and purposes is a good outcome for workers, would not be captured by the transfer-of-business provisions that apply to registered agreements in the case of divestiture. Here you could have an asset divested to another company. It could easily mean that all existing employees lose their jobs. Their pathway to a just transition is potentially completely disrupted by these divestiture powers in this bill.

Labor is here for workers. It is our view that non-registered agreements between workers, their representatives and asset owners should be protected in the event of a divestment order. Efforts between workers and asset owners that are positive should be encouraged. On that basis it is reasonable that this bill also seek to protect workers in the instances of such divestment. Workers have no responsibility for the conduct that is apparently the catalyst of this legislation being put in place, the market misconduct that the government has spoken of. Workers are not the ones that bear responsibility for allegations of cartel conduct or reductions of competition in the market. However, in true Liberal Party fashion, the drafting of this bill has given no consideration for the impact on workers. That is something that I don't think will surprise anyone. The government has paid no attention to the possibility that workers' entitlements will be reduced by the operation of this legislation.

In the other place it was Labor that moved an amendment to ensure workers under registered enterprise agreements would have their entitlements protected. We have ensured that the transfer-of-business provisions of the Fair Work Act are deemed to apply to this type of transmission—that is, forcible divestiture as a remedy for prohibited conduct in the energy sector that workers themselves have had no part in. Workers should not be punished for the anticompetitive actions of a company. This is the position of Labor senators and, I think, should be the position of all senators in this place. Following the good work of the Senate committee, Labor will be moving an amendment in this place to ensure also that non-registered agreements between workers and employees, which provide workers with additional protections agreed by employers, are safeguarded in the event of divestment. This is a very Labor thing to do, but we call on the government to support our amendment and to protect workers and their interests in the progression of this legislation. I place on record tonight my appreciation for the good work of unions like the ETU and the CFMMEU for acting in the best interests of their members and for working to protect the entitlements and livelihoods of workers in the energy generation sector.

It is a great shame that the government will not, even with the passage of this bill and after six years, have come up with a coherent national energy policy. We find ourselves as a nation not only in climate crisis but in the throes of the deepest energy crisis since the mid-1970s. And unlike the energy crisis of the mid-1970s, which was caused by an external shock, this crisis is the product of a profound failing in public policy. Households and energy-using businesses are paying the price for this crisis. We've already seen vast changes in our electricity markets. We've already seen a growing capacity for renewable energy to make a contribution to bringing down energy prices. However, in the face of a lack of a coherent energy policy from this government, the chaos and division have driven a crisis in investment and have had a terrible impact on both households and businesses around the nation. It isn't just household consumers paying the price; manufacturing businesses across many parts of the country are struggling under these high energy prices. They can't get energy contracts that ensure the future of their operations in an energy market that provides no certainty. And the government is doing nothing at all to remedy that. The only thing that manufacturing and other energy-using firms can be sure of is the failure of the tired old government that sees the energy sector with no clarity and that has a shaky ability to forward plan—very little capacity to forward plan at all, I would say.

Wholesale prices are up across the National Electricity Market, on average by 158 per cent, since the Liberal energy crisis really took grip back in 2015. The AustralianFinancial Review reported only recently that forward prices in the market are up 29 per cent in just the 12 months since the former Prime Minister Malcolm Turnbull and the National Energy Guarantee were both dispatched in a coalition party room ambush. The Grattan Institute has reflected on what's happened to wholesale prices under this energy crisis and has confirmed that it has resulted in an additional $1 billion worth of windfall profits to just three big private energy companies since this crisis took hold, paid for by Australian households and energy-using businesses. So that makes it clear what the motivation has been and why Labor supports this legislation. Big profits like that need to be passed on in the form of savings to electricity consumers. However, it does not address the government's lack of policy in the overall energy market and energy framework. So Labor will support this bill but, here in this place and across the country, we will continue to hold the government to account for its useless management of energy policy. The way it has approached things is simply not good enough. Households, consumers, families and businesses deserve much better.

WE'LL PUT PEOPLE FIRST