States told not to play politics on National Energy Guarantee

ENERGY Minister Josh Frydenberg is warning Labor states against ‘posturing’ on the National Energy Guarantee, ahead of this Friday’s showdown meeting.

ENERGY Minister Josh Frydenberg is warning the Labor states against ‘politicking and posturing’ on the National Energy Guarantee, saying anyone who opposes the policy will cost Australians a $550 cut to their power bills.

“Anybody who opposes the national energy guarantee will be condemning the families and businesses of Australia to higher power prices than they otherwise would have had,” the Minister told ABC radio today.

“It’s time that the Labor Party stop fluffing around, put the national interest first, no longer prolong these partisan wars and actually agree to a sustainable, durable policy that will deliver lower power prices.”

But, in a sign of how much he needs the states’ support, Mr Frydenberg has ruled out slashing Australia’s emissions reduction target below 26 per cent.

Minister for Energy Josh Frydenberg. Picture: AAP

Outspoken critics of the current NEG plan within the Coalition have been urging the government to drop the target, along with withdrawing Australia from the Paris climate change agreement.

Labor states want the current 26 per cent emissions target increased — and for it to be set by regulation, rather than legislation, to make it easier to lift the target later.

They are also warning the federal government that they will scupper the NEG at a crucial energy ministers’ meeting on Friday unless Mr Frydenberg can guarantee he can get the policy through his own party room, past Tony Abbott and other backbench critics.

Mr Frydenberg this morning accused the Labor states of “politicking and posturing” ahead of Friday’s meeting.

But he said there was “absolutely” room to lift the emissions reductions target after a review in 2024 and ruled out slashing the target below 26 per cent.

“Nothing in this policy prevents the states from having their own renewable energy targets,” the minister added.

Victorian Premier Daniel Andrews has indicated he is unlikely to sign onto the policy on Friday. Picture: AAP

Mr Frydenberg said that, given Australia was already on track to reach a 24 per cent emissions reduction, the targets were “not going to be negotiated down”.

But, as he tries to win support to pass the NEG this year, the Minister is not ignoring the concerns of his conservative Coalition colleagues.

He has endorsed a “NEG-plus” plan that would see the government adopt the recommendations of the consumer watchdog to provide Commonwealth support to new generators trying to enter the energy market.

He also said his colleagues had been briefed by large mining companies, manufacturers, the Australian Industry Group and farmers about the costs of blocking the NEG.

“They’ve been told very unequivocally that in order to lower power prices and increase the stability of the system, we need the NEG,” Mr Frydenberg told the ABC.

He said there were “some usual voices” speaking out about their concerns but “by and large there is strong, overwhelming support in the Coalition for this policy”.

The Minister added that the plan — which would cut household power bills by $550 a year — had been backed by Liberal heavyweight John Howard at the weekend.

Mr Frydenberg brushed off Victorian Premier Daniel Andrews’ “politicking and posturing” ahead of the meeting after he indicated he wouldn’t sign onto the NEG on Friday.

Business Council of Australia, Chief Executive Jennifer Westacott with Mr Frydenberg and Chair of the Minerals Council of Australia Vanessa Guthrie and other Business leaders meeting with coalition backbenchers about the National Energy Guarantee at Parliament House in Canberra. Picture Kym Smith

“I think we’re right to say we want the Prime Minister to demonstrate he’s got the numbers in his own show before we start signing anything,” Mr Andrews said on Sunday.

Mr Frydenberg said: “This is politicking and posturing ahead of Friday’s meeting because the states know well and good that what will hopefully occur on Friday is that we agree to the design of the NEG subject to a phone hook-up after the policy has been through the federal Coalition party room.”

“Then the draft legislation is released for comment. That goes for a period of four weeks. Any changes as necessary will be made. And then a final tick off will be required from states.”

His comments come after a powerful alliance of employer, industry and farming groups wrote an open letter to the states urging them to back the NEG.

Business Council of Australia, Australian Industry Group, Australian Chamber of Commerce and Industry, and the Council of Small Business Organisations co-signed the statement that says: “There can be no further delays.”

“A decade of policy uncertainty has only resulted in higher electricity prices and a less stable and reliable energy system,” the groups said in a joint statement.

Supporting the energy guarantee will provide the investor confidence needed to make important, long-term decisions for a reliable, affordable and clean energy system, they said.

The National Farmers’ Federation, the Australian Petroleum Production and Exploration Association and the Australian Energy Council are also on board.

Business Council chief Jennifer Westacott said disagreements about emissions reduction ambitions were not an excuse to block the plan.

“Make no mistake, it will be the Australian community and businesses that pay the price if the COAG Energy Council plays politics with NEG,” Ms Westacott said.

She said it was the first time in a decade a policy had been presented which put affordability and reliability at the centre of the debate.

— with AAP