Energy Legislation Amendment (Retail Electricity and Gas Pricing) Bill 2015

Dr HUGH McDERMOTT (Prospect) [4.45 p.m.]: I contribute to the debate on the Energy Legislation Amendment (Retail Electricity and Gas Pricing) Bill 2015. This bill aims to remove the capacity to re-regulate electricity prices from the Electricity Supply Act 1995 and the Electricity Supply (General) Regulation 2015, and to remove the ability to regulate gas prices from the Gas Supply Act 1996. When I spoke in a debate earlier today I congratulated the Government on some outstanding legislation. It was basically a rewrite of Labor Party policy from some years ago, which I was very supportive of. But this time I wonder what the Minister and the Government are doing. It is sad that we have gone from great policy earlier in the day to this piece of legislation.

The main problem with this bill is that it offers gas companies free rein. Unlike the electricity market, the gas market operates in this State as a cartel. I am not opposed to the free market—no sensible person is—but there need to be checks and balances in the system. That is why the Australian Competition and Consumer Commission [ACCC] exists. It is also why the ACCC has long criticised the gas industry for confidential, bilateral agreements that make price discovery almost impossible. The ACCC and other industry observers have found that there are profound problems with the current gas industry in that it is not open, transparent or competitive as the electricity industry is.

Deregulation in this situation will only reduce consumer protection, particularly in rural and regional areas, where competition is even weaker. The Baird Government does not know how much money gas companies are making and it has no means of finding out. The Government does not even have the ability to find out how much gas consumers may be getting ripped off. Furthermore, there is little evidence about the utility of trading markets in the gas industry, which are immature and illiquid at best. The large players, such as the producers, pipeline operators, aggregators and retailers, have a potential to set the market up for the inappropriate exercise of power. This is why, at this stage, deregulating the gas market is an ill-informed idea. These issues will not disappear in the short term either. The Minister has set July 2017 as the target date for deregulation. I am sceptical that the cartel behaviour in the operations of the gas industry, as described by the ACCC, will cease to exist within two years as the Minister hopes. Who loses if this bill passes?

The answer is households, small business, large manufacturers and large industrial employers in the electorate of Prospect and throughout New South Wales. Protections from rising gas prices will be severely weakened by this bill, with the extra costs falling on the hardworking families and small business owners of New South Wales. Therefore, I call on the Baird Government to reconsider its decision to unleash the gas companies. I call on the Baird Government to reconsider its decision to support this bill. One of the roles of government is to intervene in situations of market manipulation and unfair practices. The Baird Government is proposing to step back from its duty to the people of New South Wales. Deregulation is not necessarily a bad thing, but care must be taken to ensure that it has the effect intended by the New South Wales Government. I do not have confidence in the Baird Government's effective execution of this deregulation. Therefore, I oppose the bill.

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