Greens, Liberal Party Could Scuttle Federal Government Attempts to Control Energy Prices

Undated photo showing some cash in Sterling with a mobile photo displaying the words "your latest energy bill." (Jacob King/PA Media)

The federal Labor government’s promise to solve Australia’s growing energy crisis may be scuttled before it can be legislated after the left-wing Greens and centre-right Liberal-Nationals both warned they may not support the government’s Energy Price Relief Plan (EPRP).

The support of both parties is needed for the government to pass the EPRP in the House of Representatives or the Senate.

The federal government claims the EPRP, announced on Dec. 9, will save Australian families $230 (US$155) each and will see a 12-month emergency gas price cap placed on energy producers, including $12 per gigajoule on wholesale gas producers and $125 a tonne for coal-fired power plants. The move is likely to cut into the profit margins of the companies behind energy production.

The EPRP also involves targeted relief for Australians with $1.5 billion in subsidies for households, small businesses, and manufacturers.

“If you’re a pensioner, if you are on JobSeeker, if you receive Family Tax Benefit, you will receive support through a reduction in your power bills that will be paid through the states and territories that will be weighted towards those states and territories, including New South Wales, that are part of the National Energy Market, because that’s where we’re seeing these big price increases being anticipated,” Prime Minister Anthony Albanese said in an interview with ABC Radio on Dec. 12.

The plan will also see the introduction of a mandatory code of conduct for the wholesale gas market that includes a reasonable pricing provision and more resources for the Australian Consumer Competition Commission to monitor and enforce the code.

Greens Party Wants Power Bill Freeze

Greens leader Adam Bandt said on Dec. 9 that his party would oppose the EPRP if it includes compensation to coal or gas corporations.

“The greedy coal and gas corporations should be compensating people, not the other way around,“ Bandt said. ”The Greens will fight any moves to compensate coal and gas corporations and push for more support for everyday people instead.”

The Greens instead say they would like to see the federal government impose a power bill freeze and windfall tax on coal and gas companies, which Bandt claims can deliver power bill savings of over $750.

The Green’s alternative plan is for a two-year electricity bill freeze at rates prior to the Ukraine war, with the measures to be funded by the windfall tax.

The party further claimed the tax would generate an estimated $25 billion, which they say can help Australia transition its energy grid towards more renewables.

“The Greens want more money to go to households, renters, and businesses, including to get off gas, switch to electric appliances and install batteries,” Bandt said.

“Without a plan to get people off gas, the price pain will start up again as soon as Labor’s temporary cap ends, and we’ll be back here in 12 months’ time.”

More Supply Needed: Opposition

Meanwhile, the Liberal Party has said the EPRP was not at all what Australians wanted and said more detail was needed.

“Today’s announcement will come as a rude shock to the millions of Australians who took the prime minister at his word that they would see a solution to this energy crisis before Christmas,” the Shadow Minister for the Environment and Energy Ted O'Brien said.

He said that while the Liberal-National Coalition will “support targeted and temporary relief for Australians who are feeling it the most from soaring energy costs,” more needed to be done to support Australian households and businesses that have missed out.

“Australians can’t afford to wait a further four months before any assistance is provided,” O'Brien said.

He also called on the federal government to listen to the Reserve Bank governor, the secretary of Treasury, and energy market experts who have called for more supply to enter the system.

“Getting more gas into Australia’s domestic market will reduce electricity prices and inflation,” he said. “The government must urgently sit down with energy companies to get more gas into the domestic market.”

Opposition leader Peter Dutton said he believed the decision will only drive the cost of living upwards.

“The economic decisions that the government’s making will drive up interest rates; they’re going to make it harder for families to deal with their cost of living pressures at a time when interest rates are going up, inflation is going up, and under this government, gas, electricity, unemployment, everything is going up,” he said.