The government’s controversial legislation to tackle unfair gas prices and give households and small businesses some relief from surging power bills has passed parliament.
Prime Minister Anthony Albanese and Treasurer Jim Chalmers said the government had taken “urgent, targeted, meaningful action” to take some of the sting out of unsustainable energy price rises.
MPs and senators were recalled to Canberra for a special session of parliament on Thursday to debate the government’s package.
It sailed through the both houses after Anthony Albanese secured the Senate support of the Greens, David Pocock, and the Jacqui Lambie Network.
Opposition Leader Peter Dutton and the Coalition did not support the Bill after saying it would be “catastrophic” for Australian economic policy.
Gas prices will be capped at $12 a gigajoule for 12 months, which the government says will reduce power bills by about $230.
The Queensland and NSW governments will also enforce a cap on coal for the same amount of time, at $125 a tonne.
The package also includes $1.5bn of additional relief to small businesses and some households.
Gas companies will also have to abide by a mandatory code of conduct.
In exchange for the Greens’ support, Labor will include a “meaningful and substantial package” in the May budget that will focus on “electrification” and help low income households and renters move away from gas in their homes.
In introducing the Bill in the House on Thursday morning, Dr Chalmers said without urgent market intervention in the next financial year, retail gas prices were tipped to increase by a further 20 per cent and electricity prices by 36 per cent.
“That’s why urgent action is needed … And when we vote today, every member of this place will make a choice,” he said.
“To help Australians with rising energy bills – or to make it even harder for them.
“To save Australian jobs – or to surrender them.
“We choose to protect households and small businesses. We choose to defend our local industries. And we choose to save local jobs.”
Dr Chalmers said the price cap should not come as a surprise to the industry, given the average price of domestic offers in 2021 was $9.20 a gigajoule.
The price cap will be reviewed in mid-2023.
Gas executives had met with Mr Albanese earlier in the week and warned the unprecedented intervention measures would freeze investment and exacerbate an energy crisis.
Woodside chief executive Meg O’Neill said the legislation created “tremendous uncertainty” for the industry.
Mr Dutton had earlier called for the government to split the Bill, saying while the Coalition supported the $1.5bn package, it rejected the price cap on gas.
The Coalition did not support the Bill in either house. Independent MP Kylea Tink voted with the Coalition.
Dr Chalmers said the mandatory gas market code would address “systemic issues” in the market.
“The purpose is to ensure that a fair and transparent process applies in the negotiation of gas contracts,” he said.
On the $1.5bn package, Dr Chalmers said the states and territories would jointly fund the Bill relief, which will be applied directly.
Earlier, Energy Minister Chris Bowen said if the Coalition didn’t want to support lowering power prices, they could explain why to the Australian people.
“The opposition has made themselves irrelevant by deposing everything, that’s a matter for them,” Mr Bowen told ABC News.
“But where the parliament works best is where parties that have disagreements, and we have plenty of disagreements with the Greens, but we also have areas of agreement where we can come together and work on things together. The parliament and the country are better off.”
On the package the Greens have secured, Dr Chalmers said the government, as well as the Greens, was “very interested” in helping households switch away from gas to further lower their energy bills.
“We do want to help people make meaningful changes at the household level to get their bills down,” he told ABC Radio.
Dr Chalmers said the government would work with the Greens in developing its package, which will be contained in the May budget.
The package has yet to be costed, and Greens leader Adam Bandt could not on Thursday morning provide an estimate of how much it would cost.
Industry Minister Ed Husic said the government’s Bill would ensure the survival of small manufacturers.
“We have got to get these input costs, energy prices down or we won’t get ahead when it comes to manufacturing,” he told ABC News.
“Manufacturers will say we want to do this work here but we can’t do it if we’re worried about where gas prices are headed, so we need to take that bill shock out of the system.”
On why the price caps mattered, Mr Husic said gas companies were making profits on the backs of struggling Australians.
“We are saying to them ‘can we just get the balance right here in the national economic interest’?” he said.
“We are doing what is right in the national economic interest.”