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Monday, 16 October 2017
Page: 7473

Senator MOORE (Queensland) (11:15): Thank you, Senator Smith, for actually making a timely tabling of the committee report on this bill, the Competition and Consumer Amendment (Abolition of Limited Merits Review) Bill 2017. The limited merits review is a review mechanism which allows companies to dispute determinations by the Australian Energy Regulator about investment plans and electricity prices Australian households and businesses face. There is great interest in the community around these issues at the moment, and it's important that there is understanding across the community about how these processes operate.

The limited merits review was initially implemented to ensure companies could have their case heard if the regulator made a mistake. It has become a mechanism companies use as part of their regular business model to have inflated investment plans signed off so that they can access regulated prices hikes. This means higher prices for consumers and gold-plated infrastructure. To their credit, and with the support of some states, like South Australia and Victoria, the government has attempted to reform the LMR process, but has been blocked at every turn by states opposed to reforming the status quo. Since 2013, 12 of the Australian Energy Regulator's 20 decisions on electricity network revenue and gas access arrangements have been subject to challenge by network businesses using the LMR process. Taken together, these 12 network businesses asked the tribunal to increase their revenue by around $7.3 billion over a five-year period. That is revenue that ultimately comes from electricity consumers across the country, from families facing ever higher prices. Thus far, $6.5 billion has been awarded to companies, contributing to the recent retail electricity price increases of up to 20 per cent we've seen around the country.

The government is right in saying enough is enough. If the states can't agree to reform the LMR process so it is focused on good outcomes for consumers, not just on good profits for network businesses, then, we believe, it's time to remove the LMR. The LMR is not the only avenue for appeal that network businesses have. It's important that people understand that this is not closing off all forms of appeal. This bill won't abolish access to courts if decisions are seen to be unfair or against the rules—and then the process of the courts can continue to operate—but it will mean that companies will no longer be able to use the LMR process to justify excessive investment that generates higher regulated prices and higher revenues. Labor supports its passage.