December 19, 2018

View from The Hill: Malcolm Turnbull and his NEG continue to haunt the government

View from The Hill: Malcolm Turnbull and his NEG continue to haunt the government
The former PM via twitter effectively inserted himself into Question Time – in real time. Dan Himbrechts/AAP

If anyone needs further evidence of the self-defeating weird places
the Liberals seem to find themselves in, consider what happened on
Tuesday.

Malcolm Turnbull made another intervention in the political debate,
this time talking about the National Energy Guarantee, when he spoke
at an energy conference on Tuesday morning.

“I’ve strongly encouraged my colleagues to work together to revive the
National Energy Guarantee. It was a vital piece of economic policy and
had strong support, and none stronger I might say, than that of the
current Prime Minister and the current Treasurer,” he said.

This and the rest of Turnbull’s observations on energy policy provided
abundant material for a question time attack by a Labor party bloated
from dining on the unending manna that’s been flowing its way from
some political heaven.

As Morrison sought to counter this latest attack by concentrating on
Labor’s substantial emissions reduction target (45% on 2005 levels by
2030), suddenly a tweet appeared from Turnbull.

“I have not endorsed “Labor’s energy policy”. They have adopted the
NEG mechanism,“ Turnbull said – adding a tick of approval – “but have
not demonstrated that their 45% emissions reduction target will not
push up prices. I encouraged all parties to stick with Coalition’s NEG
which retains wide community support.”

Here was the former PM effectively inserting himself into Question
Time – in real time.

Morrison quickly quoted from the tweet, but it couldn’t repair the
damage done by Turnbull’s earlier comments.

All round, it was another difficult day for the government on the energy front.

The Coalition parties meeting discussed its controversial plan
providing for divestiture when energy companies misuse market power,
with conduct that is “fraudulent, dishonest or in bad faith” in the wholesale market.

The government has put more constraints on its plan than originally
envisaged. Notably, rather than a divestiture decision resting with
the treasurer, it would lie with the federal court (although precisely what this would mean is somewhat unclear).

Frydenberg told a news conference: “This power will be on the advice
of the ACCC [the Australian Competition and Consumer Commission] to
the Treasurer, and then the Treasurer will make a referral to the
Federal Court. The Federal Court will then be empowered to make that
judicial order.”

There had already been backbench criticisms of the divestiture proposal expressed to Treasurer Josh Frydenberg last week; the changes dealt with some of these.

But the plan is still leaving some in Coalition ranks uneasy.

According to the official government version, in the party room 18
speakers had a say, with 14 supporting (though a couple of them were
concerned about the interventionism involved) and four expressing
varying degrees of reservation. No one threatened to cross the floor.

Backbench sources said the strongest critics were Jason Falinski,
Russell Broadbent, Tim Wilson and former deputy leader Julie Bishop,
while milder criticisms came from Craig Laundy, Scott Ryan and Jane
Prentice.

There were two main worries about the measure – the potential negative
impact on business investment and its inconsistency with Liberal party
free market principles.

Bishop – who, it might be recalled, was recently saying there should
be a bipartisan deal with Labor on the NEG – highlighted the
investment implications and the issue of sovereign risk.

She said: “This is not orthodox Liberal policy. We need to do more
consultation with the industry and we need to be cautious of
unintended consequences of forced divestiture”.

Addressing the concerns, Morrison told the party room that a variety
of principles were at play.

The energy sector was not “a free market nirvana” but rather “a
bastardised market,” he said. The law was targeted at situations where
sweetheart deals came at the expense of consumers.

Energy minister Angus Taylor said governments of the centre-right,
including the Menzies and the Thatcher governments, had acted to
ensure markets operated for consumers.

Taylor invoked an example of the beer drinkers against the brewers,
when Thatcher had been on the side of the beers drinkers.

Frydenberg produced a quote from Menzies’ “Forgotten People”
broadcasts about the need to balance the requirements of industry with
social responsibilities.

The legislation, which is opposed by Labor even with the changes, is
being introduced this week. But there is no guarantee that it can be
passed by the time of the election – not least because there are so
few sitting days next year.

So the most controversial part of the government’s “big stick”, which
has caused so much angst with business, may never become a reality.

The Conversation

Michelle Grattan does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

theconversation.com

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