Big business has taken a shot at the Morrison government’s “big stick” energy laws, warning the new measures won’t cut power bills.
The Senate on Tuesday passed the Morrison government’s legislation aimed at driving power prices down.
It provides the Australian Competition and Consumer Commission with a series of remedies, ranging from public warning notices which name and shame companies to fines, civil penalties and contracting orders.
In the most serious cases of wrongdoing the ACCC will be able to force companies to sell assets.
Business Council of Australia chief executive Jennifer Westacott says the legislation is an unprecedented intervention in the market.
“Australians are crying out for action to reduce energy prices and meet our emission reduction targets but market intervention won’t achieve these goals,” she said on Wednesday.
Ms Westacott said a national energy policy to encourage business investment in new technology was the only way to drive down prices for families and businesses.
“Business investment is already in the doldrums. The government must now ensure this dangerous precedent does not spread to other sectors of the economy.”
The government argues the laws will work alongside the default market offer price safety net, reform of gas pipeline regulation and giving consumers more data to cut bills.
The coalition is also weighing up underwriting new power generation projects, while also establishing a new reliability fund.
Treasurer Josh Frydenberg and Energy Minister Angus Taylor said the laws would ensure electricity retailers pass on reductions in wholesale electricity prices to consumers, and boost competition.
But Labor and the Greens also question if prices will fall.
Labor frontbencher Murray Watt said wholesale power prices had skyrocketed by 158 per cent since 2015 on the coalition’s watch.
He said the government had failed in 16 attempts to agree on a national energy policy.
“That is why we continue to find ourselves in this utter mess where we don’t have an energy policy from the government, and, meanwhile, prices rise and reliability goes down,” Senator Watt said.
Greens senator Mehreen Faruqi also doubts if the laws will help hip pockets.
“The ACCC has said that this bill won’t lower power prices, and, even if it does, the effect will be so small as to be negligible,” she said.
Under the laws, energy companies withholding electricity contracts to lessen competition can be penalised.
Generators will also be banned from manipulating the spot market, for example by holding back supply to inflate prices.
The legislation will return to the House of Representatives later in the month for final approval.