Govt ‘trying to look tough’ with big stick energy policy, industry says

Power industry slams the federal government’s “big stick” legislation as “desperate and dangerous” election posturing.

EnergyAustralia managing director Catherine Tanna. Picture: Christopher Chan.

Prime Minister Scott Morrison’s government has been savaged by one of Australia’s leading business executives for trying to “look tough” ahead of a federal election by imposing unjust rules on the nation’s largest electricity companies.

EnergyAustralia boss Catherine Tanna — a Reserve Bank of Australia board member — launched an extraordinary attack on the government’s proposed “big stick” legislation which aims to lower prices and dilute the clout of the big players with the threat of forced divestments.

The policy is “a desperate and dangerous measure to look tough ahead of an election,” Ms Tanna told a Senate inquiry in Melbourne on Wednesday.

“If enacted the legislation will embed a layer of uncertainty on top of the public policy vacuum that clouds Australia’s electricity sector. It’s like adding a house of cards on a foundation of quicksand.”

While the government softened aspects of the proposed legislation in December — agreeing to judicial oversight of forced divestment orders for alleged market manipulation following threats of a constitutional challenge — the industry is worried over the impact of reworked powers and the precedent it may set for the power sector.

The Australian Energy Council — which represents power industry operators — criticised the rush by the government to push the legislation through.

“The Bill before us has had totally inadequate consultation, especially considering the serious nature of the penalties it seeks to impose on the market. No-one had seen the Bill prior to its tabling in the House on 5 December,” Australian Energy Council chief executive Sarah McNamara said. “Now many things in parliament require swift action. In our submission, market changing bills with far-reaching economic impacts require the opposite. They require evidence that they are needed in the first place.”

The government’s advisory body — the Energy Security Board — said on Tuesday the threatened powers could fail to bring prices down at a time when the grid’s transmission network needs a fresh investment injection to handle a surge of new renewable energy supply.