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Thursday, 1 November 2012
Page: 8786

Senator EDWARDS (South Australia) (13:31): I too would like to make some comment on the electricity prices inquiry report. From the outset, the question must be asked as to why we are having this inquiry. There is no question that energy prices in this country are causing a great deal of concern not only amongst households but amongst businesses across this country. What are the motives behind initiating an inquiry into the spiralling costs of electricity in this country? I would like to think it is because Labor recognise the pressure that they have heaped on Australian families and businesses from increasing electricity prices due to a raft of government regulation and increasing policy burdens, one of which is the carbon tax. Sadly, I think this is just a way to try and lay blame on everyone else but themselves for the soaring cost of electricity.

Since the government was elected—and I would point out to Senator Milne, who started sheeting blame to the coalition government, that that was over five years ago—electricity prices in the time of the Rudd-Gillard-Brown-Milne alliance have risen by 89 per cent. In fact, this inquiry was actioned by the Prime Minister in an effort to defray the attention of Australian consumers of energy from the issue which came forward with the release of the CPI figures. To give some context, in December 1980 the CPI was created to guide governments as to what the cost of living was doing, and it is measured quarterly. Electricity in the September quarter rose 15.3 per cent, the highest rise in electricity prices on record. It was the biggest quarterly rise in prices since December 1980, when they started recording the CPI.

On the subject of the inquiry, as Senator Milne said, it was quite rightly a very collegiate inquiry and there are some issues within the electricity market which need fixing. I do not shy away from that, and we have made some recommendations which will, hopefully, be taken up by the states and the federal government to ensure that the recommendations which have been made—which by and large are common sense—get addressed. But it was a shotgun inquiry. It lasted only 70 days. Due to the nature and complexity of the issues in the electricity market and the complex web of factors that contribute to electricity prices, this inquiry should have lasted well over one year. The issues state by state and region by region are complex and they need fixing. However, it was designed to be a quick political fix in a meagre attempt to legitimise this government's attempt to shift blame to the states, the network operators, generators and retailers. I am sure that over the next days this report will find its way into the hands of the state energy ministers and I am sure that this federal government will be in discussions with those state energy ministers about why it is that they are responsible. And I am sure that this topic will become a large issue at the December Council of Australian Governments meeting, as the Prime Minister looks to sheet blame for her carbon tax, inefficient policy and overregulation on everybody but her own administration.

The report replaces too great an emphasis on the increased network and distribution costs as causes for the recent increases and, hence, puts too much weight on the changes to the network regulation as a potential solution to high electricity prices. As highlighted in the additional comments the coalition made to the committee's report, it fails to stress that the objective of electricity regulation should be to deliver the most affordable electricity to consumers with a level of reliability commensurate with the consumers' willingness to pay. Not surprisingly, it downplays the impact of the carbon tax and other green schemes on increasing electricity prices.

Despite the glaring omissions from the report, we support the recommendations of the majority but with the following caveat: any changes to the electricity sector should be based on the creation of a more open, transparent and competitive market, not through the imposition of more red tape and regulation. We have made one recommendation in our additional comments, that the government act immediately to reduce the upward pressure on electricity prices on consumers and business by simply repealing the carbon tax. With regard to this carbon tax, Senator Cormann, who is a very literate economic mind and a future economic minister, suggested that the Treasurer had indicated that electricity prices would rise by 10 per cent over five years. We only need to point him to those CPI figures of 15.6 per cent to know how much economic literacy they on the government side have and how much in touch they are with the economic drivers of the energy market.

I would like to make a couple of observations about the inquiry. Firstly, I note the lack of understanding the average Australian has about the electricity network and what is involved in delivering electricity to everybody's home. People have a limited understanding about electricity, and that is a serious problem when it comes to changing the electricity market or their behaviour. A longer inquiry would have facilitated more public awareness and we would have taken in some of the public consumer groups, the people who mostly would have quite a bit to say about where they want this policy going. But, as I have said before, it was more a political fix and not a genuine attempt to engage the broader Australian community in this critical issue. To put that into context, I now remind the chamber that $70 million has been spent on a PR program by this government to educate Australians on the carbon tax. They even spent $70,000 on three fake kitchens to go in those advertisements to try to brainwash people that this is going to be a good thing.

Senator Conroy: Oh, my goodness.

Senator EDWARDS: Senator Conroy, I will remind you that also apparent was the 53 per cent of renewable energy in the form of wind farms that has aggregated itself in South Australia.

Senator Conroy: You generate more from hot air than one of those wind farms.

Senator EDWARDS: I will address Senator Conroy's interjection by saying that the government do not have a serious commitment to energy reform policy because they have not even thought about trying to motivate anybody, public or private, to put in a energy connector at Heywood in Victoria which would take the massive oversupply of renewable energy which is now coming out of South Australia. Fifty three per cent of Australia's wind farms are now positioned in that state. We have now in South Australia overreached our renewable target of 20 per cent by six per cent, eight years before. That has come about through lax planning policy of the state Labor government overseen by an inattentive Labor federal government not even recognising what we need to do to engage a more productive system. I look forward to the country adopting these recommendations.