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representatives vote 2018-12-05#5
Edited by
mackay staff
on
2019-10-11 13:16:03
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Title
Bills — Treasury Laws Amendment (Prohibiting Energy Market Misconduct) Bill 2018; Second Reading- Treasury Laws Amendment (Prohibiting Energy Market Misconduct) Bill 2018 - Second Reading - Put the question
Description
<p class="speaker">Josh Frydenberg</p><p>I'm just going to continue where I left off earlier today.</p><p>The government will also underwrite new firm, low-cost generation, which is particularly important for Australia's commercial and industrial users, who the ACCC found were struggling to get medium- to long-term contracts. This program will be technology neutral, as recommended by the ACCC.</p>- The majority voted in favour of a [motion](https://www.openaustralia.org.au/debate/?id=2018-12-05.136.1) to *put the question*. These types of motions are known as gagging motions because they end debate and force the House to vote on the question under discussion, which in this case was on [whether to delay debate](https://theyvoteforyou.org.au/divisions/representatives/2018-12-05/8) on this bill until later.
<p>The bill we introduce today is an essential part of this package and will address energy market misconduct, improve competition and bring down energy prices for Australian consumers.</p><p>The government has directed the ACCC to monitor retail prices, wholesale bids and contract market liquidity in the National Electricity Market between 2018 and 2025 and announced that this will be backed up by a series of remedies where the ACCC identifies misconduct by electricity market participants.</p><p>This bill will establish the misconduct to be prohibited and the targeted, proportionate remedies to apply in respect of misconduct in three key areas.</p><p>First, the retail market: in the event of a 'sustained and substantial' reduction in supply chain costs, retailers will be required to 'make reasonable adjustments' to their retail price offers, including to households and small businesses.</p><p>The explanatory memorandum makes clear that retailers will not be required to pass on small or short-term cost variations that might last a week or a month. Rather, if they enjoyed a sustained and substantial cost reduction, they need to pass it on.</p><p>Second, the wholesale market: generators will be prohibited from gaming the spot market. This can occur in a number of ways—for example, by scheduling discretionary maintenance at high summer demand periods with the specific purpose of causing a spike in prices for their other generators or by making low bids that were designed to discourage other companies from bidding into the market and only then, at the last minute, increasing the price of their bids.</p><p>The ACCC has specifically recommended that rules around false and misleading bids be strengthened, and our legislation does exactly this by prohibiting bids that are fraudulent, dishonest or in bad faith for the purposes of distorting or manipulating prices.</p><p>Third, the contract market: energy companies will be prevented from withholding hedge contracts for the purpose of substantially lessening competition, which draws on existing concepts of section 46 of the Competition and Consumer Act.</p><p>Unlike gentailers, smaller retailers are unable to manage the risk of volatile spot prices without a hedge contract.</p><p>The measures in this legislation are designed to ensure financial market liquidity and facilitate competition in the energy market. The ACCC has already recommended a liquidity measure for South Australia. This will complement it and apply nationally.</p><p>In each of these markets—retail, wholesale and contract—the ACCC will be actively monitoring behaviour. Where companies are in breach, they will act.</p><p>The legislation sets out a graduated set of penalties that can apply in the event of misconduct. The ACCC will be able to issue a warning notice, accept an enforceable undertaking or seek a financial penalty of up to the greatest of $10 million; three times the value of the total benefit attributable to the conduct; or 10 per cent of the annual turnover of the corporation in the 12 months before the conduct occurred.</p><p>For the most egregious conduct, the ACCC will be able to recommend that the Treasurer either issue a contracting order or pursue a divestiture order in the courts.</p><p>A contracting order will be able to be made only following a breach of either the contract liquidity or wholesale conduct prohibitions.</p><p>A divestiture order will be able to be made only following a breach of the wholesale conduct prohibition.</p><p>Both are sanctions of last resort.</p><p>In respect of these orders, companies will be given a chance to explain their conduct before such an order is made. A contracting order would require generators to make reasonable offers in the contract market, and the divestiture order could see companies required to sell an asset, allowing them at least 12 months to do so.</p><p>The Treasurer may apply to the Federal Court for a divestiture order only when the ACCC and the Treasurer are satisfied that the order has a net public benefit and that it is proportionate to the breach, namely that it is necessary to prevent such conduct occurring in the future and that no other remedy would achieve the same outcome.</p><p>These laws apply to government owned and privately owned corporations. In the case of a government owned corporation, a divestiture order would not prevent the relevant asset from being divested to another government owned corporation, provided that the two were in genuine competition with each other. This would allow the relevant asset to remain in government ownership while still addressing the misconduct in question and promoting competition.</p><p>Finally, this bill will also provide additional information-gathering powers to the Australian Energy Regulator, bringing the AER's powers in line with comparable regulators, including the ACCC.</p><p>The government will implement the default market offer and reference bill, to be set by the AER each year, through separate legislation. The legislation will also provide for the AER to make the necessary instruments as a part of the price determination process. The AER will be able to share this information with Commonwealth agencies.</p><p>Full details of the measure are contained in the explanatory memorandum.</p> <p class="speaker">Sharon Claydon</p><p>Is leave granted to continue the debate?</p> <p class="speaker">Tony Burke</p><p>Leave hasn't been asked for. The second reading speech having concluded, I move:</p><p class="italic">That the debate be adjourned.</p><p class="italic"> <i>A division having been called and the bells being rung—</i></p> <p class="speaker">Tony Smith</p><p>The Leader of the House?</p> <p class="speaker">Christopher Pyne</p><p>Mr Speaker, the standing orders require that the debate is automatically adjourned.</p> <p class="speaker">Tony Smith</p><p>That's correct, yes.</p> <p class="speaker">Christopher Pyne</p><p>So there's absolutely no need to have a division.</p> <p class="speaker">Tony Burke</p><p>Why'd you call one?</p> <p class="speaker">Tony Smith</p><p>No, I was watching the tail end, and I just want to clarify that the Manager of Opposition Business moved that the debate be adjourned. The Leader of the House is quite right. The standing orders ensure that the debate is automatically adjourned after the second reading speech.</p> <p class="speaker">Tony Burke</p><p>To the point of order, Mr Speaker: after the second reading speech from the minister on every bill, the chair asks for someone to move the adjournment, someone stands there and moves that the debate be adjourned, and that question is then put to the House.</p> <p class="speaker">Tony Smith</p><p>Yes.</p> <p class="speaker">Tony Burke</p><p>What the Leader of the House is suggesting is that on every piece of legislation that has gone through this House we have followed the wrong procedure. I put it to you we have not, and what is unusual on this occasion is that the government is dividing against that standard motion.</p> <p class="speaker">Tony Smith</p><p>Certainly what I saw, and some preliminary advice I've had, is that this division should not be taking place, because the debate will be automatically adjourned. I don't want to waste the time of members. I really don't. I won't. Obviously I can't be in the chair at every instance, but this division, from what I can see, should not be taking place.</p> <p class="speaker">Christopher Pyne</p><p>Mr Speaker, to the point of order, if I may: the easiest way to solve this problem is to call the vote for the ayes, in which case, of course, we won't insist on a division, because we're happy for it to be adjourned, because I have a motion to move.</p> <p class="speaker">Tony Smith</p><p>Well, if the point is that those who called 'no' no longer want a division, there is no point in proceeding.</p><p>Honourable members interjecting—</p><p>No, I tell you what: you're here now, but you won't be here in 10 seconds. So, if those who called 'no' are no longer calling for a division, I'll call the division off, and the question is resolved with the ayes.</p><p>Debate adjourned.</p> <p class="speaker">Christopher Pyne</p><p>I move:</p><p class="italic">That so much of the standing orders be suspended as would prevent the resumption of debate on the motion that the Treasury Laws Amendment (Prohibiting Energy Market Misconduct) Bill 2018 be read a second time being made an order of the day for a later hour.</p><p>I'm introducing the suspension of standing orders through a contingent motion, which means of course it doesn't require an absolute majority, because this government is absolutely committed to passing this divestment legislation at the earliest possible opportunity in order to get it into the Senate so that the Senate can receive its committee report and pass legislation in the February sittings of the parliament. If we do not pass this divestment legislation in the next 48 hours or less, we won't be able to pass it until February next year and the Senate won't pass it until the budget session next year. So, the longer this takes to pass, the more the energy companies will be able to keep thumbing their noses at consumers around Australia. We would like to see the bill passed so it can go into the Senate, and then it can be debated in the Senate in February and be passed in February, and then the energy companies will be required to listen to the consumers and to the government, directing them to reduce their electricity prices. So everyone who votes against the suspension of standing orders is essentially saying that they want to delay this legislation until at least April next year, and everyone voting in favour of this suspension of standing orders is saying, 'Let's get on with it as soon as we can and pass legislation through the Senate and the House of Representatives by February next year and start taking the big stick to the energy companies.'</p> <p class="speaker">Chris Bowen</p><p>This stunt shows just how low this government has sunk when it comes to its credibility, just how pathetic and desperate this once proud government was. This is a government which doesn't have an energy policy and now has thrown out all conventions of this House as a stunt. I move:</p><p class="italic">That the words 'for a later hour' be deleted and replaced with 'on the first sitting day of 2019'.</p><p>I do so because that's the proper process of this parliament. That's how good policy is made. That is the proper process that the Australian people expect of the government.</p> <p class="speaker">Tony Smith</p><p>I might stop the member for McMahon. I know you are almost reaching full speed, but, if you are going to move an amendment, it will need to be seconded.</p> <p class="speaker">Tony Burke</p><p>Both have signed it and it's in writing.</p> <p class="speaker">Tony Smith</p><p>It hasn't been seconded yet—I haven't seen that—but I will take that as having been moved. The member for McMahon may proceed.</p> <p class='motion-notice motion-notice-truncated'>Long debate text truncated.</p>
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