Liberals in a bind over call to expand ‘big stick’ break-up powers

Scott Morrison could be forced to negotiate with the Greens to pass controversial energy company divestiture laws.

Scott Morrison at the Business Council of Australia annual dinner in Sydney last night. Picture: AAP

Scott Morrison could be forced to negotiate with the Greens to pass energy company divestiture laws, amid demands from maverick Liberal National Party senator Barry O’Sullivan that the “big stick” laws be greatly widened.

Senator O’Sullivan yesterday vowed to amend the government’s bill so powers to break up energy company assets could also be applied to banks, supermarkets, and agriculture businesses.

He declined to say whether he would support the shake-up if his changes were rejected.

The Coalition already requires the support of at least one crossbencher in the lower house to pass its legislation if all its MPs vote for the laws.

The Australian Energy Council — representing major electricity companies including AGL, Origin, Energy­Australia, Alinta and Aurora — also warned the government’s draft legislation could fail to reduce household power bills and did not address industry concerns.

“There are serious unanswered questions regarding the constitutional validity of the bill,” the AEC told the government in a submission released late yesterday. “The approach set out in the bill would produce negative impacts for all consumers by increasing perceived regulatory risk and accordingly increasing the cost of investment … By contrast, it is not clear that the bill will reduce electricity prices.”

Senator O’Sullivan, who led the internal campaign to force the government into accepting a banking royal commission, told The Australian he would reserve his judgment on whether to support the “big stick” legislation.

“If I am not satisfied then I will seek to have the bill amended when it comes to the Senate,” Senator O’Sullivan said.

“As a general principle of law, a single sector of the economy should not be singled out and ­solely targeted in compulsory ­divestment laws or any other governing legislation. There is ­already strong public discussion about the market power imbalances and lack of competition across the banking, agriculture and retail sectors as well as energy.

“I can see no reason why these antitrust divestment laws should not be expanded to apply to all areas of our economy. I know I am not the only one in the partyroom who has formed this view.”

Key upper-house crossbenchers including Cory Bernardi and Derryn Hinch have not yet decided how they will vote. Centre Alliance — which has two Senate seats — has voiced concerns with the “big stick” bill while South Australian inde­pendent Tim Storer is opposed in principle.

The Greens, controlling nine upper house seats, have not yet flagged how they will vote on the legislation. If they join Labor to block the package, the government must win eight of the 10 crossbench ­senators. Without Senator ­O’Sullivan, the government would need nine.

The Australian understands the Greens are considering their position but say the government’s ­determination to extend financial support to coal may impact on the position they take.

Other Nationals MPs said the proposed divestiture ­orders for the energy sector should be expanded, but were willing to support the legislation as a step in the right direction. LNP MP Llew O’Brien, who wants a royal commission into the conduct of the supermarket giants, said he supported divestiture powers for the energy sector but said there were other areas where they could apply. He said it should be up to ­future parliaments to broaden the ­powers.

Former deputy prime minister Barnaby Joyce said he was “going to be the last person to try and stop a limited divestiture power — even if it’s for one sector”. He said that, if the legislation worked effectively in the energy sector, it could be a good first step to developing a general divestiture power in Australian competition law.

Labor is attacking the proposed law as a measure worthy of socialist Venezuela.