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Energy firms have months to prepare for ‘big stick’ laws

Electricity giants will be given six months’ grace to prepar­e for the Morrison government’s “big stick” energy policy that threatens to split up the assets­ of major power companies.

The big-stick powers will not come into effect until six months after a revised version of the govern­ment bill passes both houses of parliament and receives royal assent. With the Senate not due to consider the powers until next month at the earliest, energy giants may not face the penalties — including divestment of their assets — for many months yet.

Energy Minister Angus Taylor said the revised law was delivering on a key election promise “to take action in the energy sector, get ­prices down and keep supply in the market”. He told The Australian: “The bill will ensure energy companies play by the rules in the retail market by requiring them to pass on cost savings to consumers.

“And if the ACCC finds companie­s engaged in misconduct, a graduated series of remed­ies allow appropriate and propor­tionate action­ to be taken.

“The Labor Party voted 13 times against this legislation in the last parliament. The big-stick legis­lation is a crucial test for the opposition: do they stand with the Australian people in wanting to lower power prices or … with the big energy companies?”

Energy giants have been reluctant to fight the big-stick legislation publicly after Scott Morris­on’s emphatic election victory­ in May, and now have more time to prepare for the new regime.

The Business Council of Australia hardened its opposition to the bill after refusing to criticise it over the weekend. BCA chief executive Jennifer Westacott told ABC radio on Tuesday the bill would not reduce energy prices.

“We still oppose them (big-stick powers). We still believe all the risks exist,” she said.

When The Australian asked her position on Sunday, Ms Westacott said the BCA “hadn’t supported that in the past”, but flagged working with the government to improve the bill.

“The government took this to an election. We respect that,” Ms Westacott said on Sunday.

“Our job now is to work really ­constructively with them to make sure that the legislation achieves what it is intended to do.”

The new bill also enshrines an amendment pushed by independ­ent MP Bob Katter in the last parliament. Any state-owned assets divested under the big-stick powers cannot be passed onto a private enterprise under the change.

Other changes to the bill include limiting individual liability to company directors and senior executives and clarifying that companies will be punished for not making reasonable price adjustments to market offers.

Liberal MPs raised little oppos­ition to the revised bill in a Coalitio­n partyroom meeting, despite­ a stoush during backbench committee meetings. Economically dry Liberals feel the interventionist powers of the legis­la­tion clash with the party’s free-market philosophies, but most agree it is an election promise that must be passed.

Deputy Opposition Leader Rich­ard Marles and Labor’s Treas­ury spokesman Jim Chalmers said they would not declare a position until they had seen the full bill.

Source: The Australian