The Albanese government’s legislation capping gas prices and funding consumer rebates to deliver power price relief has passed the Senate, despite the Coalition voting against the proposal during a special sitting of federal parliament.
Anthony Albanese declared himself “stunned” after the opposition leader Peter Dutton resolved to oppose the package unless the government was prepared to split the legislation to separate the gas price cap from financial help for households.
The prime minister told Sky News “extraordinary times call[ed] for extraordinary measures” and he noted the Sunak government in the United Kingdom had been prepared to pursue “essentially a super profits tax that they are then using to rebate households and businesses in the energy sector”.
“I was somewhat stunned, frankly, that Peter Dutton and the opposition were prepared to vote today for higher power prices for both businesses and for households,” Albanese said on Thursday.
As well as firing a broadside at Dutton, the prime minister also warned the gas industry against “talking down” its prospects – a reference to a furious lobbying effort by producers claiming the proposed government intervention would chill new investment, compounding domestic supply issues.
The prime minister dismissed the escalating industry warnings as hyperbolic. “This is a very modest package … a modest intervention that’s required because of the extraordinary circumstances.”
“I say this to the sector – they want to be careful that they aren’t talking themselves down because there are big opportunities for future investments.”
“If you go out there and you say, oh, this will inhibit investment, this will create issues for us going forward, then you’re essentially talking down your industry, and I see no reason, there’s nothing in this legislation, that should require that sort of conversation.”
Labor secured the requisite parliamentary support for the package – which caps gas prices at $12 per gigajoule for 12 months and provides $1.5bn in federal assistance for bill relief – after locking in the Greens and Senate kingmakers David Pocock and the Jacqui Lambie Network.
As well as the price cap, the legislation encompasses changes to the gas market code, including a reasonable pricing framework and formal dispute resolution process, with binding arbitration, for the resolution of pre-contractual disputes.
Key elements of the intervention are yet to be determined, and both the opposition and some cross benchers were critical of the rushed process for drafting the necessary legislation.
Rebates for low and middle income earners will be settled after Christmas after consultation between the federal treasurer and his state counterparts.
In order to secure backing for the package, the government has also agreed to fund an accompanying electrification package to help households transition from gas to electric appliances. The details associated with that package are yet to be determined.
Dutton characterised the regulatory intervention as “a massive con job” because power bills would continue to increase next year despite the legislated price cap. Government officials have been clear energy prices will continue to rise in 2023, but say the price caps deliver a price reduction in the order of $230, with rebates for eligible customers offering additional support.
The Liberal leader said the process of drafting the legislation was “shambolic” because “this plane is still being built mid-air”. Dutton said the policymaking had “all hallmarks of the Rudd-Gillard years”.
The opposition leader also decried the price cap intervention as “catastrophic for economic policy in this country” because the signal would chill investment.
“These sorts of market interventions don’t just restrict themselves in terms of the impact to the energy sector, there will be other companies in other sectors who are looking to invest here at the moment, who will be looking at the sovereign risk that’s created out of this and questioning whether they will invest in agriculture or whether they’ll invest in the manufacturing, advanced manufacturing, into the healthcare sector,” Dutton said.
During a rowdy debate in the Senate, the finance minister Katy Gallagher declared the Coalition had voted against price relief for households, and absented itself from formulating serious policy solutions that would prevent manufacturers from going out of business.
The decision to oppose the package was made by the shadow cabinet on Wednesday night and rubber-stamped by the Coalition party room on Thursday morning.
During the discussion, the veteran Liberal MP Russell Broadbent suggested it was foolish for the Coalition to try to govern from opposition.
The implication of Broadbent’s observation was Australians would see Thursday’s decision as the opposition refusing to deliver power price relief rather than the Coalition standing against government intervention in the gas market on a point of principle.
