I want to return to the amendments before you, Chair. Senator David Pocock has suggested some amendments to provide for a review mechanism of certain particular impacts. An amendment that dealt with similar issues from Dr Haines went through the House, and it was very general. I note Senator Pocock has been a little bit more specific with his proposal. The Haines amendment was quite general. So I wanted to ask the government: to what extent would the Haines amendment, if you like, and the reviews now contained in this bill before us allow and provide for a benchmark of electricity prices over the next decade against what was promised in the Labor Party’s Powering Australia plan?
The bill before this place is one element of the Powering Australia plan that the Labor Party took to the election, and in that plan they made very specific promises about what Australians could expect from the implementation of their climate policies. In particular, I read from—I’m just finding the page number, but there are no page numbers! Sorry, it is page 4; it’s just landscape. Thanks for clarifying that. On page 4 of the Powering Australia plan it says, ‘It’—with ‘it’ being their Powering Australia policy—’will bring down household power bills by $275 in 2025’—just three Christmases away—’and $378 in 2030.’ We’ve heard about the $275, but we don’t hear as much about the $378. The Prime Minister mentioned the $275 20-odd times during the campaign.
Senator Duniam: Ninety-seven times!
Senator CANAVAN: Ninety-seven times. Thank you, Senator Duniam. Nearly 100 times, the Prime Minister promised the Australian people before they voted that he would lower their power bills, by implementing these policies, by $275 a year. Their policy said it would be by $378 by 2030. We all know that since the election, since people have been hoodwinked into voting for this plan, the Labor Party hasn’t mentioned the $275. It won’t come from their mouths. Hopefully Senator McAllister will inform us about this $275 promise where the Prime Minister has refused to provide clarity.
We do now have this review mechanism. Because of the Haines amendment there is a review mechanism, and Senator Pocock is suggesting it go a little bit further and be more specific. So my question is: will the Haines amendment and/or the Pocock amendment allow for the benchmarking of the promise made to the Australian people? Will we see through these reviews what has happened to power prices and how it compares to what Labor promised their climate policy would achieve?
I note that there already has been substantial criticism of the Labor Party’s modelling of that figure. They released a related report on their Powering Australia policy, a modelling report by RepuTex, but by modelling report standards it was fairly skinny on detail. It didn’t provide much detail on the assumptions that were made going into this report, nor did it include any related spreadsheets or tabulation of these figures. It would seem that the Labor Party has made a schoolboy error here, for want of a better term, on their calculations. Perhaps it explains why they are so shy about repeating a promise that they made very prominent in their campaign, and which presumably did influence a number of Australians about how they voted. I know that, at the election, living costs were a major issue for people, and the Labor Party were out there, saying: ‘Hey, we’re going to save you nearly 300 bucks. Vote for us!’ But now they won’t speak that number.
The modelling from the Labor Party showed, or purported to show—like all modelling, it’s not gospel—that if you implemented the 43 per cent target and a range of other policy measures that Labor had promised, wholesale power prices would fall by 30 per cent. What the Labor Party seems to have done, from the skinny amount of detail we have, is that they’ve taken the 30 per cent drop in wholesale prices and said that retail prices will also drop by 30 per cent, giving you the $275 figure.
Now, business is not the Labor Party’s strength. We all know that. But even if you didn’t know a lot about the electricity market, you’d probably know that the wholesale cost of something typically is only a proportion of the retail cost of something. In the old days, if you had a Campbells cash carry card, you could go down and buy a bunch of red frogs at a cheaper price because the wholesale price was cheaper than the price in the retail store. That’s how the electricity market works. The wholesale costs of power, which are traded on a 30-minute interval every day, are paid for by the large retail companies, large customers who are buying a lot of power, who then on-sell that power to others. So the wholesale costs generally, to simplify matters, are the price of power as it leaves the power plant, as it leaves the solar farm. That’s the cost up to that point.
But of course we don’t hook our electrical appliances into a coal-fired power plant. We don’t hook them straight into a solar farm. Power then has to be transported over large transmission lines. The voltage has to change, it has to go to distribution networks, and the retail companies themselves have costs and overheads associated with billing and customer management et cetera. The wholesale prices typically are only about a third of the total cost that you pay or a household pays in your electricity bill every quarter.
So the Labor Party are only out by a factor of three. They have estimated that the wholesale power costs will come down by 30 per cent. Then they promised the Australian people: your power bills will come down by effectively 30 per cent—the $275 figure. But they forgot to do the calculations in between—it should actually be a 10 per cent reduction, roughly, in power prices, not a 30 per cent reduction.
They’ve never really come to answer the question about these criticisms. As I said, these criticisms have been public and well known in the economic modelling community, which I used to sometimes be involved in. RepuTex, Labor’s modellers, have been very scant in replying to these criticisms. But it is the modelling that the Labor Party stood behind and that they promised to the Australian people, so I think it is absolutely relevant for the minister here to tell the parliament and the Australian people: were there mistakes in the Australian Labor Party’s modelling? Do they stand behind that modelling? Do they accept the criticisms that have been made about the mistake that seemingly was made between wholesale and retail power costs? Do they accept that? Do they stand behind everything that RepuTex says? We deserve to know that before we vote on this plan. It may have been a mistake to defraud the Australian people; it would be a catastrophic error to defraud the Australian parliament as well. That’s what is before us here right now.
We already know the Australian people have been hoodwinked on this issue, but it’s our job here in the Senate to scrutinise and evaluate the detail of the government’s plan. Because of these unexplained errors that have been identified, I think it is very important, before we vote on this legislation and/or Senator Pocock’s amendment about reviews, that the minister and the government come clean on their modelling and these issues that have been raised in a way they have refused to in the public domain. They have refused to answer these questions properly out in the public. But it is our job here—we should sit here as long as we need to. I’m on the clock for the Australian people. I’m happy to stay here as long as we need to, to get answers for the Australian people. As I said, this was not a little issue. This was not a non-core promise. This was a key part of the Labor Party’s election platform, which they have walked away, ducked and weaved from being held to account for. Well, now is the time, before we vote for this.
Other senators, particularly new senators, like Senator Pocock: don’t let the government get away with this. You have the power here to hold the government to account to provide a detailed and sufficient explanation to the Australian people about their election promises, about the work and analysis that was done to make those promises, before we vote on anything. As I said, we can stay here as long as we need to, to get these answers. Let’s do that. Let’s actually do our jobs as senators. Let’s not be a rubber stamp; let’s actually be a magnifying glass that gets to the fine print in the Powering Australia plan and identifies a number of deficiencies in this Powering Australia plan that the Labor Party released. We deserve to know the extent of those deficiencies before we vote on the plan here.
