The Australian Industry Group (Ai Group) has made a submission to a federal Senate inquiry into the energy market which is examining amending competition laws around energy market misconduct.
This is the second time the bill, known as the ‘big stick’ legislation, has been submitted to parliament as the federal government continues to try and inject fair competition and pricing into the energy sector as prices continually rise at the detriment of industry and householders.
The Treasury Laws Amendment (Prohibiting Energy Market Misconduct) Bill 2019 was first introduced into parliament last year in a bid to bring down power bills.
The five-page submission expresses a preference for market mechanisms and predictable energy policy to encourage investment in the sector and keep the prices down for consumers and businesses.
The Ai Group acknowledges the need for some additional provisions for the Climate Change Authority to target specific conduct in the sector but says disproportionate intervention in the electricity market would have an adverse impact on sustainable and effective investment in the electricity sector, thereby harming the long-term interests of energy consumers.
Ai Group chief executive officer, Innes Willox, said: “Ai Group strongly believes that given the existing level of uncertainty in the energy sector, further measures such as those outlined in the Bill to force business entities to restructure or divest some or all of their assets, risks having a materially detrimental impact on their existing commercial operations and investment strategies.
“These risks apply to all private participants in the generation sector, not just large incumbents. More generally, creating a power to break up energy businesses would set a poor precedent for disproportionate government intervention in the wider economy. It would raise deep reservations among domestic and international institutional investors regarding investment in Australia, including in the infrastructure sector.
“Despite the considerable progress underway on energy market and policy reforms in recent years, the ongoing uncertainty over national energy and climate policy has greatly exacerbated the underlying uncertainty of investment in a market undergoing fundamental changes to technology and business models. Investment to remedy these problems will be lower and slower than it should be if this Bill is passed.”
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