Turnbull announces major changes to energy policy

demand response

The Federal Government has abandoned a key part of its proposed National Energy Guarantee (NEG), as Prime Minister Malcolm Turnbull admits a lack of parliamentary support for the policy.

At a press conference this morning with Energy Minister Josh Frydenberg and Treasurer Scott Morrison by his side, the PM said in the absence of bipartisan support, the legislation to move forward with the emissions component of the NEG will not be able to pass the House of Representatives.

“The outstanding reservations of a number of our colleagues, combined with the absence of bipartisan support, means as long as that remains the case we won’t be in a position to take that legislation forward,” he said.

“In the House of Representatives, with a one seat majority, even with strong support of the party room, if a small number of people are not prepared to vote with the government, then it won’t get passed.

“It’s a fact of life. We don’t have the support to do that.”

The Federal Government will still retain the policy, however, the legislation will not be introduced.

“Our energy policy remains the same. But we obviously need the support of sufficient of our colleagues to get it passed. That means, substantially, all of them,” he said.

Mr Turnbull said the announcement, which came as talks of a leadership challenge from Peter Dutton arose at the weekend, in “no way distracts from the government’s focus to bring down power prices”.

He said the government is announced a range of actions, recommended by the ACCC, including introducing a default market offer and giving more power to the ACCC.

“We’re going to stop the rampant price gouging by the big energy companies,” he said.

“We’ll shine a light on the hidden practices in the industry that drive up power prices and hold to account anyone who stands in the way of a better deal for Australian energy users.

“For too long the energy companies have baffled consumers with confusing and complex offers, promising deep discounts to standing offer prices that bear little relation to the actual cost of providing electricity.

“By setting a default market offer from which all discounts must be calculated, consumers will be able easily to compare offers from different companies and recognise when they’re being ripped off or when they’re getting a fair deal.”

The Federal Government will provide the ACCC and the Australian Energy Regulator (AER) with $31. 9 million in additional funding to better monitor the electricity market and pricing to ensure all participants are acting in the best interests of their customers.

“Today, I will be extending the ACCC’s powers again to ensure they can continue to put in place the monitoring of the electricity companies that they have had up until June 30 of this year,” the Treasurer said.

“The ACCC will be given the resources to undertake that role. Some $18.9 million is estimated is what they will require to be able to perform that continuing cop on the beat function of monitoring those prices.”

The new plan also includes measures to keep the big energy companies in line, according to Mr Morrison.

“The big stick, as we’ve referred to it, involves a number of powers ranging everywhere from the initial warning up to divestment and everything in between,” he said.

“Enforceable undertakings, instructions, directions in terms of making supply available in the wholesale market.”

Australian Energy Council chief executive Sarah McNamara said the announcement has left the NEG in limbo,with retail price caps and other interventions treating the symptoms and not the cause.

“This is policy with no consultation,” she said.

“We agree with the Australian Energy Market Commission’s assessment that re-regulation is not warranted.

“Re-regulation has the very real potential to damage competition and confidence. It is extremely difficult for any regulator to set a default price accurately.

“If it is set too low it will push energy companies out of the market. If it is set too high it will mean consumers are paying more than they should.”