What happened to the Coalition’s ‘big stick’ energy legislation?

Ross Greenwood speaks to the Chair of the Coalition’s backbench environment and energy committee Craig Kelly after Prime Minister Scott Morrison decides to take his ‘Big Stick’ legislation to the election, rather than trying to pass it through government.

Ross Greenwood: Let’s take the federal parliament now and as I said there were some rather unusual scenes that took place. I’ll start with the Senate President Scott Ryan announcing that he was going to revoke the pass of James Ashby, the staffer, a very senior staffer of One Nation and Pauline Hanson, over what would have been a push and shove between James Ashby and Brian Burston in the Great Hall last night.

Scott Ryan: The video footage that I have reviewed, it shows inappropriate behavior by pass holder towards the Senator. Accordingly, I have exercised my authority to revoke Mr. James Ashby of his pass to access the building and prohibit him from reentering the building for the time being.

 Ross Greenwood: In the meantime, there was another question, and that was how did blood come to be on Pauline Hanson’s door? Brian Burston himself admitted to that.

Brian Burston: Whilst, I do not recall the incident of blood on the door, I now have come to the conclusion that it was myself and I sincerely apologize for that action.

 Ross Greenwood: Okay, as I say, it was part of the scenes of a rather bizarre day, yet again, in parliament, where the government does not have the numbers on the floor of the House of Representatives, is desperately trying to hang on.

Particularly, today, trying to avoid a second loss. This is in regard to opposition parties seeking a vote on the floor regarding a Royal Commission. Question time was extended. The Royal Commission would be on the disabilities sector. Let’s go to Bill Shorten and Scott Morrison duking it out in question time today.

Bill Shorten: Can the Prime Minister confirms that he’s dumped his latest signature energy policy today because he’s lost control of the parliament. Can he also confirm that he fronts a minority government because the minister for Home Affairs deposed, Malcolm Turnbull? Why is Malcolm Turnbull no longer the Prime Minister of Australia?

 Scott Ryan:  What the leader of opposition just put to me at the onset of his question is complete rubbish. It doesn’t surprise me because the leader of the opposition is always talking rubbish Mr. Speaker. He talks rubbish all the time, he talks rubbish in here, he talks rubbish outside of here.

 Ross Greenwood: Part of what Bill Shorten was talking about there, was basically the government shelving a piece of its legislation on energy policy. This was the so-called “Big Stick” In other words if energy companies did not comply, and the energy companies are going to say, “We’re completely against it.” Saying it was bad policy.

What would happen is they would effectively have assets stripped off them. You just wonder whether that is good policy or not. The greens put an amendment up to ban taxpayer funded qualified power projects into the future and this is the reason that prompted the government then to shelve that legislation.

As I said it descended into a bit of a farce because question time was extended. Somebody who would have been watching those proceedings very closely the Chair of the backbench committee on energy is Craig Kelly. Many thanks for your time Craig.

Interview with: Craig Kelly, Chair, Backbench Environment and Energy Committee

 Craig Kelly:  Yes, good afternoon Ross.

Ross Greenwood: Okay, so I understand the government’s doing everything it can to hang on, but the fact of the matter is it doesn’t help clear and decisive policymaking when you don’t have the numbers in either of the houses, does it?

Craig Kelly: No, it doesn’t but Ross that’s going to be resolved very soon. The Prime Minister has indicated we’re having an election in May. We’ve got the budget coming down in about a month’s time. Hopefully, that budget looks like it’s going to be returning the budget to a surplus, and we can start paying back the debt that we’ve accumulated over a number of years.

Unfortunately, Ross, you’re right with the energy policy. Look, this is still a very good policy. We are pushing ahead with it, make no mistake about that whatsoever. But the reality is between now and the election, we are unlikely to get that legislation through both houses of parliament. Therefore, we are going to take it to the election.

We are going to give the Australian people a clear choice. When it comes to the price of electricity, we are going to be on the consumers’ side, and the labor party is going to be on the side of the big energy companies.

Ross Greenwood: Okay, I get that but is it good policy? It doesn’t sound like coalition policy to go to a company, any company free enterprise organization and say, “I’m sorry we’re not happy with the way you’re operating. We are going nationalize, we are going to take off you an asset that you rightly own.” That doesn’t sound like Australia.

Craig Kelly: Just let me clarify this because there’s a bit of confusion over the divisions of power. Now, this is legislation or powers that have been in the United States of America, the home of free-market capitalism, for over 100 years. Now, I don’t see any problem with the US economy, at the moment, and that has this divisions to power economies a wire today. It’s not the government taking, it’s not the government confiscating the assets. It’s where a company engages in any competitive activities to harm consumers. The remedy is that they have to split themselves into smaller units to compete against each other.

It’s not the government taking it over. Let’s just take, for example, AGL would they have owned half a dozen electricity generators? What a potential diverse issue would be about, but they would have to split themselves into smaller companies where one company would own say Liddell and another company would own Base Oil and they would have to compete hammer and tongs, against each other, to the benefit of consumers.

 Ross Greenwood:  You’ve studied in Geo, I’ve studied in Geo a lot Craig, that may be part of the problem, but there’s plenty of sources of electricity out there. You can see with the national grid that if say, for example, I know that the price in Victoria is high and they’ve got plenty of hydro potential out of Tassie. They basically open up the gates, let the electricity run, let the water run. Let the electricity run pump it across the interconnector to take advantage of those Victoria prices.

There’s lots of energy generation. Is it the fundamental problem of energy policy in Australia that too many large companies are able to be generators, wholesalers, networkers, and retailers. As a result, they get a clip of the ticket at every step and if they’re not making their money out of the generation they’ll make the money out of the retail.

Craig Kelly: Certainly right the idea that you have companies’ sow such vertically integration and such high market shares also is a problem. Also, remember the concentration of these markets at the generation sector is also a problem.

Now, the electricity market is very unusual. Small fluctuations in supply and demand can see the wholesale price of electricity increase a 100 times. I can’t think of any other market for any other commodity, where you see these price spikes with supplies withdrawing from the market and the wholesale price can jump 100 times. It’s like imagine you went to fill up with petrol and you found the price was $130 a liter.

That’s the equivalent of what we are seeing in the electricity sector. That is why it is so important that you have very strong competition laws that make sure these companies have the strongest incentive to engage in any competitive conduct. That’s what we want to do in contrast you got the labor party. They are backing the big energy companies on this, which I just can’t believe why they’re not getting behind consumers.

Ross Greenwood:  Final one. Given the fact that the government had to extend question time to avoid a potential second loss on that vote on the Royal Commission of the disability sector, and that’s going to happen every day until next week is out, is the government going to be able to hang on without the Prime Minister having to go to the Governor General and call an election?

Craig Kelly: I think this idea if you lose a vote on the floor, it’s really an inside Canberra bubble thing. I remember we had the Labor thought they won the vote on the asylum seekers to weaken up our laws on asylum seekers. They were running around in border protection, they were running around here thinking they had a big win.

People of Australia aren’t concerned about that, about who wins a single vote on the floor of parliament. Look, the Royal Commission into the disability service sector, the Prime Minister has said this is something he would look at. There’s no even terms of reference, at the moment. I think this is something that will come about. It’s just another stunt that we’ve seen by the Labor Party, today.

Ross Greenwood: There you go, Craig Kelly, is the liberal Minister for Hughes and also the chair of the backbench committee on energy and Craig, as always, we appreciate your time.

Craig Kelly: Thanks, Ross.

Image source: 2GB

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