Divestment Bill An Unhelpful Distraction From Much-Needed Policy Reform

The Senate Economics’ Committee Inquiry into the Divestment Bill has concluded with a report which fails to dispel widespread concerns about both its overreach and the risk it poses to investment and energy prices, the energy industry said today.

The Australian Energy Council’s Chief Executive, Sarah McNamara, said that the Committee’s majority report failed to give proper weight to the majority of submissions, which were critical of the Bill, including by major business groups such as the Business Council of Australia, the Australian Industry Group, and the Energy Users Association of Australia.

“More than 75 per cent of the submissions to the Inquiry raised serious concerns about the Bill, while only six submissions supported it, and none of those were able to identify how the Bill would lower prices for consumers,” Ms McNamara said.

“This should come as no surprise given the Government was similarly unable to show how the Bill would lower prices, and Treasury was not asked to undertake any economic modelling on the subject.

“The Australian Competition and Consumer Commission did not find that there is misconduct in the market of the kind identified in the Bill, and specifically ruled out the need for a divestment power in the energy sector.  The Bill proposes measures which are best described as a solution looking for a problem.

“In an environment of upward pressure on energy prices, it is critical that the Government and industry focus on reforms that are going to deliver price relief and better transparency for Australian homes and businesses.  We remain perplexed that the Bill remains Government policy in circumstances where the weight of evidence before the Committee was that it would ultimately lead to poorer outcomes for consumers.”

About the Australian Energy Council

The Council represents 23 major electricity and downstream natural gas businesses operating in competitive wholesale and retail energy markets. These businesses collectively generate the overwhelming majority of electricity in Australia and sell gas and electricity to over 10 million homes and businesses.