Mr Deputy Speaker and I welcome the relief provided to energy consumers through this Bill.
The war in Ukraine has generated an energy crisis that the government does need to address and I do find it slightly ironic, the self righteous indignation about the Government intervention in the private market by coalition speakers before me.
It is something to behold because the war inUkraine commenced before the election and no step was taken by the previous government to ensure some kind of insurance against volatile energy prices. But also during the last Parliament there was no hesitation to intervene in the market with policies such as the Big Stick legislation to threaten energy producers if they switch clear energy.
So I think what's really important to remember also is we have an energy crisis that is also the result of ten years of failure to accelerate a transition to renewable energy. Previous coalition governments did everything they could to put a handbrake on Australia's transition and we are paying the price. It's failed to put any protections in place to protect domestic prices and Australians from variable international energy price rises. Australians should not be paying international prices in domestic markets for their own resources.
So as a result Australian households and businesses have already been left exposed to this year's 20% energy price rises and there are predictions of a further 36% energy increases next year. So I do support for the government to intervene. What the bill does, it will cap gas prices to $12 a gigajoule in the domestic market for new gas contracts for the next twelve months. It gives the government the ability to implement a mandatory gas industry code of conduct, which I would say is well overdue. It provides for $1.5 billion of assistance to those on income support and other tax benefits as well to small business to assist with power costs. And I look forward and urge the government to come forward with the detail in relatio nto that as soon as possible.
The Bill does not touch coal prices. The $125 a ton cap on coal prices will be implemented by state governments. And whilst the Bill does not provide for compensation to fossil fuel companies directly for any loss or damage as a result of the intervention directly, I do question whether state governments will later be compensated by the federal government. We must ensure a sensible transition away from fossil fuels, so I don't support any further subsidies or compensation to coal. We must use this crisis to accelerate transition to being energy independent, using energy sources that are price table and that is solar and wind.
The goal of this bill to keep electricity prices down or to avoid the further increase it is anticipated, is important. The 20% rise already this year has putso many households and businesses to the edge. We also need to be mindful not to create a policy that creates further inflationary pressure. And so it is a very complex and difficult balance that needs to be reached. Providing direct assistance to those who need it most by providing relief with power bill shock without adding to inflation has to be the goal. Is it the best way to achieve that objective? Probably... I'm sure with hindsight we'll be able to see that other things could have been done or could have been done better.
I would question whether a direct price cap is the most effective solution. A windfall profit tax raised already in this chamber would be a neater solution more aligned with free market economics and would increase government revenue. Our exports of coal have declined during this period due to high prices with the value of our exports has almost tripled. The tax revenue has not been commensurate to that rise. Many other countries, including the UK, have imposed wind for profit taxes on fossil fuel exports. At this time, Australia should follow suit and get the compensation we deserve from our resources.
To assist with the transition away from fossil fuels we must improve the state of the budget and provide greater levels of relief for costs of living. I question some of the assumptions underpinning the twelve month sunset. This assumes that the global energy market will return to a more stable position as a result of the war in Ukraine ending in the next twelve months. I would be curious to know who has that crystal ball. So does that mean that trade with Russia will automatically return to normal at the end of host hostilities?
There are a lot of questions but overwhelmingly on balance it is important that we intervene. I commend the government for intervening to ensure that the price rise anticipated for next year do not occur and that is why I will support this bill. But I urge the government for ongoing consultation and to commit greater resources to accelerating the transition to cleaner forms of energy.
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