Competition and Consumer Amendment (Australian Energy Regulator Separation) Bill 2025
Senator DEAN SMITH (Western Australia) (18:39): The coalition supports the intention behind this bill, the Competition and Consumer Amendment (Australian Energy Regulator Separation) Bill 2025, which is to implement more efficient and effective governance arrangements for the Australian Energy Regulator, a regulator operating in a sector that is of paramount importance to the Australian people at this moment.
This bill amends the Competition and Consumer Act 2010 to separate the Australian Energy Regulator from the Australian Competition and Consumer Commission. The effect of this will be that the AER will have operational control over its own resources, staff and governance arrangements. As assistant shadow energy and emissions minister, I have been briefed by both the AER and the ACCC, and I also participated in the Senate Economics Legislation Committee inquiry into the bill.
As was the case in the briefing, evidence given at the public hearing of that inquiry confirmed that the separation will generate positive efficiency outcomes that will ultimately benefit consumers as well as deliver greater transparency. During the inquiry, the coalition sought a nil net cost guarantee in relation to the separation and a commitment that any one-off costs would be absorbed by the AER.
The department confirmed the bill would not lead to any future budgetary or resourcing increases. The ACCC also gave evidence that it will not employ any new staff as a result of the AER separation. Coalition senators did note that a shared services offer for ICT and property services is still being developed.
We observe these should be finalised as soon as possible in the interests of a smooth separation. I again state that the coalition will use the estimates process throughout the rollout of the separation to ensure the efficiency and budgetary claims that were made do occur and the best interests of consumers are in fact served. It's important to reflect on the energy reality unfolding in our country behind this bill—that is, that growing energy insecurity also means growing economic insecurity for Australians.
Affordable, reliable energy underpins our national economy and supports productivity. Manufacturing, industry, agriculture and small business sit next to emerging technologies, like cyber and AI, in needing a dependable, accessible national electricity grid. However, under the Albanese government, Australians are experiencing an energy price crisis.
Electricity prices having risen by more than 30 per cent on Labor's watch, according to the most recent data. In fact, while Prime Minister Anthony Albanese promised Australians savings of $275 on their annual electricity bills, prices have soared up to $1,300 more than Labor promised. It's no surprise that many are struggling as a result.
Anglicare Australia revealed in its most recent cost-of-living index: For the majority of the households we modelled, energy bills are simply unaffordable. Minister Chris Bowen and Labor have overseen back-to-back hits to household and business budgets. Under the Australian Energy Regulator's default market offer for 2025-26, which came into force from 1 July this year, residential electricity bills have increased by up to 9.7 per cent and small-business electricity bills by up to 8½ per cent.
The incoming government brief from the Department of Climate Change, Energy, the Environment and Water, which the coalition recently compelled the government to release, notes: … Draft Market Offer (DMO) points to a further significant increase in retail electricity prices next financial year. To put that into dollar terms, Canstar predicts the average power bill to rise by approximately $228, and, under Labor, it's $228 that many Australians can ill afford.
Labor cannot be believed when it comes to the cost of their energy and emissions reduction policies. The now Albanese government took three relevant promises to the 2022 election: a $275 cut to bills by 2025, 82 per cent renewables by 2030, and 43 per cent emissions reduction plans. They have either failed or are failing on all three.
As I noted earlier, power prices are up to $1,300 more than what was promised for 2025-26. Nor is Labor on track to reach its 82 per cent target, with experts forecasting that—and this is in the most optimistic scenario—the Albanese government may reach just 65 per cent. Professor Ross Garnaut, Labor's own long-term adviser, has claimed the government will miss its own 82 per cent target 'by a big margin'.
The Climate Change Authority says a 15-megatonne reduction annually is required to reach Labor's target, but, instead, emissions are, in fact, increasing under Labor. Latest emissions data shows that, in the year to December 2024, emissions were 446.4 megatonnes, or nearly six megatonnes more emissions than under the coalition's last year in government. It is worth putting on record again that the coalition achieved an average reduction of 12 megatonnes every year.
The DCCEEW incoming government brief further confirms that Labor is not on track for 2030, advising Minister Bowen, 'Emissions reduction needs to accelerate rapidly,' and that, 'a strong push' is needed. We are in a critical debate about our nation's energy future, and Australians have a right to and must be involved and engage. But to do so they need clear visibility of the electricity grid transition costs.
So while it is deeply concerning generally that the Centre for Public Integrity has revealed the Albanese Labor government to be one of the least transparent in the modern era, this is a particular problem when it comes to Labor's energy policies. At the end of July, the CSIRO handed down its final GenCost report but refused to reveal its modelling on Labor's renewable integration costs.
I turn back a final time to Minister Bowen's incoming government brief, noting the Albanese government's efforts to prevent its public release and subsequently releasing a copy so redacted that 97 per cent of pages were partly or completely blacked out. The Productivity Commission has released an interim report on its inquiry into investing in cheaper, cleaner energy and the net zero transformation.
That report reveals that the net zero transition will be cost even more than expected, and that greater intervention regulation incentives and carbon pricing are needed to meet the emissions reduction targets. The Productivity Commission's report does not provide any detail on the overall cost to the Australian economy to achieve the government's net zero by 2050 target.
It confirms what we have known since Labor came to power in 2022—that is, that Minister Bowen is recklessly chasing renewables at any cost and, in doing so, is seeking to hide the real cost to Australian businesses and families. Renewable infrastructure costs have soared. Australia is projected to be at its worst year for wind turbine construction in a decade, according to Restart Energy.
The cost of turbines has climbed between 50 and 80 per cent while the cost of installing those turbines has climbed by up to 100 per cent. Meanwhile, Mr Bowen has bolstered the Capacity Investment Scheme with the money of Australian taxpayers while refusing to disclose the cost of the program. Again, I quoted Professor Ross Garnaut before and I do so again.
He recently revealed, 'There are now virtually no new investment commitments for solar and wind generation that do not have CAS or Capacity Investment Scheme or other government underwriting.' It is a combination of cost increases and falling private investment that Australians are paying dearly for. There was a clear message in the Australian Energy Infrastructure Commissioner's 2024 annual report also—that was, that the Albanese government's approach to energy transition is leaving many communities behind.
Those communities are facing higher bills and greater uncertainty, and Labor has no plan to fix it. The report outlined that the commissioner's office logged 152 new cases in 2024, the third-highest year on record, and has now handled over 1,000 cases since its establishment. The commissioner observed, 'There are significant concerns being raised in communities and lessons to be learned and ongoing community challenges that must be addressed.' The report also noted 'a recurring theme of a sense of communities not being informed, respected and at worst being patronised, or that engagement is a tick-the-box exercise rather than a meaningful one'.
Some of the specific concerns highlighted in the report include landholders feeling they have lost control of their own property, confusion over inconsistent planning processes across states and territories, and growing unease around how decommissioning of large projects will be handled, including the costs and responsibilities of recycling and disposal. In stark contrast to Minister Bowen's 'net zero at any cost' approach, the report warned, 'We should focus on shared objectives of affordability, reliability and sustainability to ensure we can efficiently continue the energy transition.' The coalition believes Australia needs an energy policy that ensures affordability, reliability and a fair go for local communities while supporting innovation and investment in the technologies that will secure Australia's energy future.
While, as I've said, we support the intention of this bill, I conclude by putting two things on the record. Firstly, this bill is a bureaucratic measure. While it has the potential to cut red tape at the AER and the ACCC,it will not lower power prices.
Secondly and finally, we, the coalition, will use the estimates process where and if needed to ensure that the claimed efficiencies are, in fact, realised.