Malcolm Turnbull’s energy policy a disgrace

Malcolm Turnbull emerges to announce his policy backdown. Pic: Kym Smith

The Turnbull government has effectively ditched its National Energy Guarantee policy and with it any shred of credibility with the business community, not to mention the general public.

Today’s backdown was blamed on five renegade Coalition politicians who had threatened to vote down legislation to back the NEG over concerns with its climate policy.

The whole idea of the NEG was to finally bring the states and federal government together in a plan which, albeit imperfectly, would link energy reliability with emissions control.

Malcolm Turnbull has shelved plans to pass an emissions reduction target by regulation or legislation - a central element of the NEG - in a back down to conservatives such as Tony Abbott. He the future of the NEG was now in the hands of the states.

The Prime Minister also confirmed there would be an electricity price target set by the energy regulator and announced new powers for the Australian Competition and Consumer Commission to “step in” where there has been a misuse of market power.

The politicians can’t do their own job so, instead, they have created a target in business.

The whole methodoloy on show in Canberra is a nothing short of a disgrace and Malcolm Turnbull should be ashamed to be part of it.

The NEG was overwhelmingly backed by energy users and retailers with widespread support from business lobby groups.

The whole idea was a step forward from over a decade of government inaction, due to petty politics.

But Turnbull has declared today he can’t get the deal through parliament and instead he has used heavy-handed regulatory threats against industry on the pretext of achieving lower energy prices.

This is a sham of the worst order from a Prime Minister who has failed to get the policy enacted.

What was to be a step towards investment certainty is now a complete retreat backed by threats to force divestment of generation assets if retailers don’t play ball.

The energy retailers have long feared this was an endgame but even the ACCC had played down the likelihood of it every happening.

The tragedy of today is the utter stupidity of retail politics, which selectively uses bits of the ACCC’s report on the industry without hitting key items like forcing Queensland to split its generation assets and write down their value.

The policy on default prices is OK to create some transparency where the retail oligopoly has overstepped the mark by inflating prices.

But this just a small part of the remedies recommended by the ACCC and instead, in typical fashion, the big stick of forced divestment is being rolled out in attempt to show Canberra as the tough guy.

In reality this government is a sad joke.