The Greens are holding firm on their demand for power bills to be frozen for two years, as parliament prepares to reconvene to vote on a plan that would temporarily cap coal and gas prices.
- The Greens have not committed to supporting a bill to cap gas and coal prices
- Adam Bandt says the government should freeze power bills for two years
- He says coal and gas companies should be taxed to cover the cost of future price rises
The government says its plan to cap coal and gas prices for a year will spare households $230 in bill increases, but it admits even with the capped price it expects bills to rise further over the next two years.
Greens leader Adam Bandt, whose party’s support is needed to impose a price cap, has proposed a two-year freeze on bill increases, which he calculates will save households $750 in forecast price rises, to be funded by a UK-style “windfall tax” on fossil fuel companies.
“If electricity bills continue to rise it will put a lot of pressure on a lot of people,” Mr Bandt said.
“We want to see more money in people’s pockets, paid for by making the big corporations pay their fair share of tax.”
Mr Bandt said he would also negotiate whether the government could provide a financial-assistance scheme to help low-income workers replace appliances with cleaner and more energy-efficient models to help provide long-term relief that lasts beyond the temporary price cap.
But Mr Bandt indicated he was broadly supportive of gas and coal caps even if his proposals were rejected.
He noted that the legislation did not appear to include provisions to compensate affected coal companies — something the Greens had opposed — though the price caps for coal will be imposed at a state level, not by the Commonwealth.
Earlier today Energy Minister Chris Bowen said the government believed it would be a “very, very rare circumstance” where coal company production costs exceeded the $125 per tonne price cap and triggered compensation payments.
“They want to ensure supply of coal to their coal-fired power stations. We think that’s reasonable,” Mr Bowen said.
Treasury modelling suggests the price cap on coal and gas will curb forecast price increases over the next two years by $230 for the average household, though power prices are still expected to rise.
$3 billion in energy bill assistance to be jointly paid by the Commonwealth and states and territories will be delivered to provide additional relief to people receiving income support.
Prime Minister Anthony Albanese said his government had inherited an energy system that had not been maintained by the former government.
“We saw under the former government four gigawatts leave the system and only one gigawatt enter, so we’ve had less supply because they didn’t have that investment certainty,” Mr Albanese said.
The federal opposition has said it will oppose measures to cap coal and gas prices.
Shadow Energy Minister Ted O’Brien said the government was trying to rush complex legislation through parliament in a single day.
“Isn’t it amazing that here we are on a Tuesday, the government wants parliament to vote on a Thursday, and they have not furnished the details of this,” Mr O’Brien said.
Shell pauses gas offer ahead of price cap
Meanwhile, multinational oil and gas giant Shell says it will temporarily pause its proposal to offer additional domestic gas in 2023 and 2024 that was otherwise slated for export.
Shell said its subsidiary company QGC must assess the impact of the proposed one-year cap on its plan to answer an expression of interest for 50 petajoules of additional gas for Australia.
“Pausing the EOI was not an option we wanted to take, however, QGC needs to consider whether the design of the current EOI will meet the new regulatory requirements, including the 2023 price cap,” the company said in a statement.
Industry Minister Ed Husic said companies would still be able to make a profit under the price caps.
“This is the same Shell that had a third-quarter profit of nearly $7 billion, which was up from around a $477 million loss the equivalent quarter the previous year,” Mr Husic told ABC Radio.
“So when these firms are making claims … about the viability of projects, this is about them trying to maintain their profits in extraordinary times and we have got to act in the national economic interests.”
Mr Husic said the industry had been given advanced notice on several occasions that Australia needed “more reasonable” pricing, and said it should not be “threaten[ing] the nation” with walking away from supply agreements.
The energy minister said the government would act “in the national interest, not in the interests of Shell”.