Energy policies must support new investment

“Everyone wants to see more affordable electricity, but governments should be extremely cautious about intervening in markets at a time when businesses are not investing because of a lack of policy certainty,” Business Council chief executive Jennifer Westacott said today.

Gas Controls

“There’s a lot of demand for Australian gas. The best way to put downward pressure on gas prices is to increase supply,” Ms Westacott said.

“The government has been forced to consider this move because several state governments have refused to support the development of new sources of gas, in direct defiance of scientific opinion.

“Australian companies are losing valuable export opportunities because states such as Victoria and NSW have failed to stare down misguided activists and work to safely develop their gas resources.

“This kind of intervention in the gas market has the potential to further undermine confidence in Australia as a place to invest. Weakened investment in Australian companies means fewer jobs and lower wages for Australians.

“States should lift their bans and moratoriums on gas development and move to a scientifically based framework that assesses projects on a case-by-case basis, as recommended by the ACCC.

“This would increase the supply of gas and put downward pressure on prices.”

Limited Merits Review

“The ability of affected stakeholders to seek a merits review of erroneous regulatory decisions is the cornerstone of an accountable, transparent and efficient regulatory regime,” Ms Westacott said.

“Removing access to the limited merits review regime would undermine confidence in Australia’s regulatory framework, further chilling new investment and jeopardising the future safety and reliability of the electricity network.

“In 2012, when the Australian Energy Regulator was given additional discretion, the regulator itself recognised that limited merits review regime was important to protect the rights of service providers.

“The regulator’s decisions aren’t being overturned because the courts are getting it wrong. They are being overturned because the regulator isn’t perfect, and it sometimes makes mistakes.”

Finkel Report

“It’s encouraging that the government is advancing several recommendations contained in the Finkel Report. This momentum must be maintained.

“A Clean Energy Target for electricity can be both fuel and technology-neutral and preserve the broadest range of options to meet future emissions reduction targets.

“Companies will only invest in new electricity infrastructure if there is a stable policy framework, with minimal government intervention, that will outlast the government of the day. This means ending the ideological energy wars.”

Australian Energy Market Operator Review

“We welcome the AEMO review into the need for continuous dispatchable power, which should increase confidence that there will be greater reliability and affordability of supply,” Ms Westacott said.

“We strongly caution against using taxpayer funds to finance new electricity generation. Every million dollars the government spends building power new plants is a million dollars that it can’t spend on other important services.”