The Business Council of Australia welcomes Prime Minister Julia Gillard today calling for reforms in the energy market that will place energy policy at the centre of Australia’s economic performance.

Business Council Chief Executive Jennifer Westacott said the Prime Minister’s focus on the need for investments which would support an efficient national energy market were particularly welcome.

Ms Westacott said the Prime Minister’s comments, and call for solutions, underlined the need to accelerate reforms to drive productivity improvements across energy sectors and the Australian economy as a whole.

“Energy fundamentally underpins the Australian economy because all businesses and households are consumers of energy. The best solutions for the problems outlined by the Prime Minister are market-based, which means allowing participants to undertake necessary investments and to recover their costs efficiently,” said Ms Westacott.

The Business Council supports efficient national energy market reforms including:

• Privatising remaining state-owned assets, including generation and transmission businesses
• Effective regulation of wholesale electricity markets
• Deregulation of retail electricity prices where competition is effective
• Bringing forward assessments by the AEMC of competition where possible
• The rollout of smart meters, subject to a positive cost-benefit analysis.

“While the Business Council does not believe governments should play an active role in determining electricity prices, they do have a responsibility to implement sensible regulatory policies to ensure the energy market operates efficiently and effectively.

“We urge COAG to consult widely with the business community as it considers policies to support an efficient national energy market. We expect governments to arrive at concrete decisions and then implement them, rather than simply undertaking ongoing review processes.”