Malcolm Turnbull’s energy policy change means power retailers would be required to make default market offer in push to lower costs

PRICE gouging by energy retailers will be under attack from a new Turnbull Government plan to slash power prices, following the shelving of the National Energy Guarantee.

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PRICE gouging by energy retailers will be under attack from a new Turnbull Government plan to slash power prices, following the shelving of the National Energy Guarantee.

Besieged Prime Minister Malcolm Turnbull on Monday announced several new measures set to benefit up to 1.2 million households and businesses.

Flanked by Treasurer Scott Morrison and Energy Minister Josh Frydenberg, Mr Turnbull said the Federal Government would implement recommendations from an ACCC report into the energy market, which was handed down by the watchdog last month.

A default market offer that will require all retailers to make a “new, cheaper offer” for consumers annually, based on the Australian Energy Regulator’s estimate of its operational costs, will be introduced.

The ACCC recommendation estimates that families on inflated standing offers would save between $183 and $416 if they moved to a new default market offer.

Small and medium-sized businesses could save from $561 to $1457. Mr Turnbull said consumers would be able to take up a default offer safe in the knowledge they were not being gouged.

Treasurer Scott Morrison, Prime Minister Malcolm Turnbull and Energy Minister Josh Frydenberg speak to the media about the proposed energy policy changes. Picture Kym Smith

“The big energy companies were gaming the system to make huge profits … at the expense of consumers,” he said.

The government will also give the ACCC and the Australian Energy Regulator a $31.9 million funding boost to improve monitoring of the electricity market and pricing. The consumer watchdog will also be given new powers to step in when there has been “an abuse or misuse of market power”.

Mr Turnbull said the government was not afraid to be “heavy-handed” and would give the ACCC the authority to issue directions, including to force energy providers to sell assets if they have too much market power as a “last resort”.

The new measures failed to hold off industry concerns about the certainty of long-term investment for the energy sector — after Mr Turnbull confirmed a legislated carbon emission target remained government policy, but would be put on hold until there was sufficient Lower House support.

Labor leader Bill Shorten said the opposition was willing to work with the government, but the Prime Minister had instead yielded to his enemies rather than fighting for lower pollution and power prices.

Business Council chief executive Jennifer Westacott said large users, generators and retailers had strongly supported the NEG as a “workable solution”. But she said the new proposals would discourage investment in urgently needed dispatchable power, which would have consequences for prices and reliability.

Australian Industry Group chief executive Innes Willox said energy policy had again fallen victim to short-term political gamesmanship.