Energy giants take cash from ‘wallets of hardworking Australians’, says Angus Taylor

Energy Minister Angus Taylor has accused energy giants of recording soaring profits by taking cash from the “wallets of hardworking Australians”

Energy Minister Angus Taylor has accused energy giants of recording soaring profits by taking cash from the “wallets of hardworking Australians”.

Government research reveals the big three power companies — AGL, Origin and EnergyAustralia — are expected to bank a $2.87 billion profit in 2020 which is almost double what the firms’ combined profits five years ago.

It comes as Mr Taylor prepares to introduce the government’s “big stick” legislation which will hand the Treasurer massive powers to stop price gouging including forced asset sales.

Under the proposal it would be possible for the government to force AGL to sell Liddell if it could be proved that to company did not have sufficient plans to make sure the closure would not distort the market.

Energy giants are taking cash from the wallets of hardworking Australians, says Mr Taylor.

“We hope we won’t have to use them (the big stick) but believe they’re necessary to stop the bad behaviour,” Mr Taylor said.

“It squarely focuses on pricing and supply, making sure there isn’t price gouging and withdrawing of supply to drive up prices.”

Treasurer Josh Frydenberg said the plan ensured that the power was valid and would only be used in a way that benefits the consumer.

“These remedies will include divestiture of assets, where recommended by the ACCC, as a last resort,” he said.

In financial forecasts the outlook the big three shows that they made a combined profit of $1.46 billion in 2014-15 and were projected to make $2.87 billion in 2019-20.

Minister for Energy Angus Taylor and Prime Minister Scott Morrison.

AGL has had a 28 per cent increase in profit since last financial year while Origin has nearly doubled its profit.

“It is no wonder the big energy companies are pushing back against the big stick legislation we are introducing to parliament,” Mr Taylor said.

“They have been taking record profits from the wallets of hardworking Australians for years — and they don’t want it to end.”

Mr Taylor said Labor’s policies would simply pump billions of dollars more into the big energy companies’ bottom lines.

AGL has had a 28 per cent increase in profit since last financial year.

The government wants to enshrine in law the demand that energy companies pass on cost reductions to customers.

If they don’t then they will face penalties such as temporary price regulation and divestiture.

Refusing to offer electricity supply contracts to rival companies and attempting to manipulate the spot market which includes withholding supply to inflate the price would also see companies fall foul of the laws. As a safeguard the tough regime expires in 2025.

Labor treasury spokesman Chris Bowen said the proposal to force asset sales was worthy of Venezuela and raised concerns of sovereign risk.