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Coalition win as ALP backs ‘big-stick’ laws on energy

Energy companies are being warned they must “play by the rules” after Labor capitulated on the Morrison government’s “big stick” laws, in a major win for the Coalition.

It is now likely that the laws, which could result in energy companies being forcibly broken up for the “most egregious conduct”, will come into effect mid-next year.

Anthony Albanese insisted Labor’s changed position was not a backdown because the laws had changed substantially from the previous parliament, when the bill failed to gain enough support.

The Australian understands the government will wave through a Labor amendment to prohibit partial privatisation of an energy company slapped with a divestit¬ure order, which sources described as tokenistic.

The latest iteration of the laws already prevent the Federal Court from ordering privatisation but Labor’s amendment will stop the court from reducing the percentage of a company’s government ownership.

“We’re pleased to see the government has made efforts to take our concerns seriously, and has introduced a new version of the bill that rules out full privatisation, but Labor will continue to fight against any possibility of partial privatisation by amending the bill in parliament,” opposition Treasury spokesman Jim Chalmers and energy spokesman Mark Butler said.

“If successful, and given other improvements in the bill such as an enhanced role for the ACCC and courts, Labor will support its passage.”

Labor’s support for the bill comes days after ALP president and former treasurer Wayne Swan called for the laws to be applied to the banking “cartel”.

The bill is one of about a dozen big-ticket items the government wants driven through parliament as a priority this year.

The first-home loan deposit scheme also passed federal parliament on Tuesday with bipartisan support, providing a government guarantee to allow up to 10,000 eligible first-home buyers each year to purchase a home with a deposit¬ of as little as 5 per cent.

Dr Chalmers said the latest “big stick” bill was “different in meaningful ways” because it gave the competition watchdog and Federal Court broader powers and the treasurer’s role was “much diminished”.

Josh Frydenberg welcomed the Opposition Leader’s “belated decis¬ion” to endorse the legislation, saying the about-face came after Labor voted against it several times. “The Morrison government is sending a clear signal to industry about what the Australian community expects,’’ the Treasurer said. “The ‘big stick’ will ensure -energy companies play by the rules in the retail market by requiring them to pass on cost savings to consumers.

“If the ACCC finds companies engaged in misconduct, a graduated series of remedies allow approp¬riate and proportionate action¬ to be taken.”

Under the laws, the treasurer can apply to the Federal Court for a divestiture order only when the Australian Competition & Consumer Commission and the treasurer are satisfied the action would have a public benefit and was proportio¬nate to the breach.

“One of the issues in the last bill … was that it leaned too heavily on ministerial discretion,” Dr Chalmers told ABC TV. “We thought that would chill investment because investor¬s would look at that and worry about whether or not a minister¬ would take that step.

“We are satisfied the extra role for the ACCC and for the Federal Court makes it a different bill and one we are prepared to support, so long as the government supports our other amendments on partial privatisation.”

The “big stick” laws could pass parliament with Labor support by November and would commence six months after royal assent.

Source: The Australian