Australian House of Representatives, Hansard, Question Time 26 March 2024:
Energy
Mr TED O'BRIEN (Fairfax) (14:36): My question goes to the Minister for Climate Change and Energy. In the last week alone we learnt that Labor has officially broken its promise of a $275 reduction in household power bills by up to $1,000. Over 500 families a week are going on energy hardship arrangements, and the east coast gas market is facing material shortfalls from next year. Why is the Albanese government making life harder for Australian families already struggling to cope with Labor's cost crisis?
Honourable members interjecting—
The SPEAKER: Order! When House comes to order and there are no interjections I'll call the Minister for Climate Change and Energy.
Mr BOWEN (McMahon—Minister for Climate Change and Energy) (14:37): I thank the honourable gentleman for his question. It went to two things, as I heard the question. It went to energy prices and gas shortages. Let me deal with both—
Mr Ted O'Brien interjecting—
The SPEAKER: The minister will pause.
Mr Ted O'Brien interjecting—
The SPEAKER: Order! We're just going to do this in an orderly manner. The minister was asked a question by the member for Fairfax. Within 12 seconds the yelling, the screaming—that's not helpful, and he knows that's disrespectful. He knows that's against the standing orders The member for Fairfax will leave the chamber under 94(a). That sort of behaviour, as everyone knows, is completely unacceptable.
The member for Fairfax then left the chamber.
The SPEAKER: The Minister for Climate Change and Energy has the call [my yellow highlighting]
On 31 July 2023 quarterly National Energy Bill Relief payments came into effect for electricity account holders with valid: Pensioner Concession Card issued by Services Australia or the Department of Veterans' Affairs (DVA) Health Care Card issued by Services Australia, or Department of Veterans' Affairs (DVA) Gold Card marked with either 'War Widow', 'War Widower Pension', 'Totally and Permanently Incapacitated' (TPI) or 'Disability Pension' (EDA).
Together with NSW Government Household Rebate that totals electricity cost relief received by a single pensioner at between $199.72 - $202.30 a quarter or $798.88 - $809.20 over a 12 month period.
For a NSW pensioner living alone that total amount more than wipes out the costs equivalent to at least one - possibly almost two - of the four annual billing periods.
BACKGROUND
In December 2021 then Opposition Leader Anthony Albanese asserted that under the Labor Party's Powering Australia Plan annual average retail energy bills for households would be $275 lower by 2025.
On 26 May 2022 - four days after the federal election - Australia learned that the Australian Energy Regulator had been ordered to delay the release of its default market offer (DMO) from 1 May to 26 May 2022 by the outgoing Morrison government and that the new default market offer indicated across the board significant electricity price increases for households in the eastern states. This price rise followed the 4 May 2022 Reserve Bank announcement of the first official interest rate rise since 2010 - the first of 13 interest rate rises it has announced to date.
According to the Inquiry into the National Electricity Market Report, December 2023, within the National Energy Market:
in jurisdictions with retail competition, the majority of customers are on plans with prices which are determined by retailers. About 10% of residential customers and 20% of small business customers are on standard retail contracts with standing offer prices which are capped by the Default Market Offer or Victorian Default Offer.....
We analysed our sample of flat rate plans for over 5 million existing residential customers, assuming achievement of conditional discounts, and found that, in August 2023:
− 47% of all residential customers were on plans with a calculated annual cost equal to or higher than the default offer
− 42% of concession customers were on plans with a calculated annual cost equal to or higher than the default offer.....
96% of residential customers on plans with an unconditional price more than 25% above the default offer have a conditional discount in 2023. The customer-weighted average conditional discount for this group of customers is 29%, indicating they have not changed plan or retailer in the last 3 years since the introduction of rules on conditional discounts.
When we assume conditional discounts are achieved, customers with large conditional discounts are still paying prices around the default offer prices, suggesting that these customers would benefit from switching energy plan....
According to the AER Default market offer prices 2024–25: draft determination:
In NSW, residential customers without controlled load will see prices of $1,773 to $2,549 which range from a decrease of 3% to an increase of 0.9% (6.3% to 2.4% below forecast inflation) compared with DMO 5 [Default Market Offer 2023-24], depending on their distribution network region [metropolitan or country/regional areas]. Customers with controlled load will see prices of $2,476 to $2,964, amounting to decreases 0.4% to 7.1% (3.7% to 10.4% below forecast inflation).
It is noted that in the 1990s individual state governments and the Council of Australian Governments paved the road to privatisation of much of the national electricity supply industry and both Labor and the Liberal-Nationals Coalition have supported such privatisation down the years. The current Shadow Minister for Climate Change and Energy & Liberal MP for Fairfax would do well to remember that the next time he considers indulging in "yelling" and "screaming".
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