Legislative Council Tuesday 23 May 2017

Ms FORREST (Murchison) - Mr President, I welcome back the honourable member for Launceston on her election.  It is nice for us both to be returned.  I appreciate the ongoing contribution she will make.  Also, the new member for Rumney - I am sure she will find her feet very quickly.  She has a couple of colleagues here to see her on the right path.

I welcome her and it is nice to see three women sworn in on the same day and to increase our percentages of the gender balance in this Chamber.  I was speaking to the new member for Rumney about that.  The member for Derwent can confirm this.  The Parliamentary Labor Party now has 50 per cent women.

Mr Farrell - Yes.

Ms FORREST - Tasmania is leading the way in their gender balance.

Mrs Hiscutt - The Greens have 100 per cent women.  That is equality in the other direction.

Ms FORREST - Yes.  There is a long way to swing before we get back to equality in that regard.  It is good.  It is a sign that the people recognise the value of women to our communities and to our parliaments.  So, welcome to our new honourable member.

When this bill was tabled, I fully understood why the Government wanted to take action.  A lot of small regulated customers feel energy prices as a huge impost.  With winter approaching, it becomes even more so because that is our higher energy use time. We are using heaters and the like, and a lot can be done to help households reduce energy costs in terms of energy efficiency measures in houses, but they all cost money.  I can see the desire of the Government to act.  None of us would argue that this is an expense that pushes some right to the edge, and some over the edge when they cannot afford to pay. 

I commend the Government for taking action to try to minimise the impact.  The volatility in the energy market was going to cause a significant price increase of about 15 per cent.  For many people throughout Tasmania, that would break them in trying to meet their costs.  So, yes, we do need to do something.  There is much more the Government can do in this area as opposed to legislating to control the price.  They should look at these other small things, which they and the previous government did in supporting families and households to be more energy efficient, by draught-proofing their houses and so on.  A range of things can be done.

One thing brought to my attention during my election campaign period was that not so many houses have off-peak power because there are new tariffs and other things coming in that make that less necessary.  If a rental property has an off-peak metre, but no off-peak heating, there is still a cost.  When you are in a rental property with an off-peak metre but no off-peak appliance, from memory, you still pay around $20 quarterly for the privilege of having a metre in a metre box not connected to anything. 

This has been taken up with Aurora, and there is $196.64 removal cost.  If it is your own property, you make the choice to remove it and recoup your money over however many $20 payments you would not have to make.  In a rental property you cannot simply remove the metre.  You would have to pay close to $200 to do it.  A lot of people are in these situations where the cost to do that is not insignificant - $200 to remove it. The owner is not paying the $20 fee for the metre still in the metre box; the tenant is.  The tenant feels unable to complain because the landlord will put the rent up to cover the cost.

There needs to be some way of dealing with this.  We are going around in circles with this one.  I know other honourable members have tried to assist this constituent, so surely there should be some way of dealing with this.  This person is having to pay their energy bill and they are paying another $20 for a metre that does nothing.  Should they waive the fee if there is no connection to it in those circumstances?

There may be other hidden costs out there, not related to this bill as such.  This is one measure being taken by the Government to reduce the impact of the volatility of wholesale energy and electricity prices.  That is good, but there are other measures that might only affect a small number of customers, and that should be looked at as well. 

This legislation before us is to deal with all regulated customers, which are small mums and dads, domestic users and small business.

Yes, it is hard to argue that we should not be doing this.  Concerns have been raised about ministerial power.  We see that in a lot of legislation.  We have often argued against this, that we should not be allowing ministers to issue orders without any recourse back through the parliament.  I understand that this is the problem for this particular year:  if we need to allow this process to unfold and see the significant price hike that will occur on 1 July not occur, then it needs to be dealt with right now.  If the determination is to be made, the regulator has to make a determination based on what the minister says, then it has to be put into the new price determination.

It is time-sensitive.  We cannot really argue that the Government should have acted sooner because the volatility was not there earlier.  It has only been in more recent times.  I can see that we are under a time constraint.  Whilst there is always concern about ministerial power, and I remain concerned about ministerial power being used in this way, I believe if it is only for a short-term measure until there is a long-term solution reached, that is the point.

I commend the Government also for directing Treasury to undertake the review of the current wholesale regulatory framework, which sees us basically coupled with Victorian energy prices.  This has been fine in the past because they have not varied that much and it has not been so volatile.  A number of factors have made it volatile.  Some say that it is partly to do with the Hazelwood power plant that has been decommissioned and we had our own energy crisis issues.  There have been a number of factors that have influenced this price volatility.

The Department of Treasury and Finance will undertake this review of the current framework.  That should be completed during the 2017-18 financial year, so over the next 12 months or thereabouts.  During that time we need a mechanism and this is what this bill is about.  It may take whatever Treasury comes up with and finds in regard to the current framework.  They might find it is fine - this period here is a bit of a blip, but otherwise it is fine; then we will not need to change.  They might find there is a much better model.  It may take a little while to implement that.

In my view we need to give them two years to get this done and sorted, then get rid of this ministerial interference process to a long-term sustainable model that cannot be politicised by parties, whatever their colour. 

I foreshadow an amendment to put in a sunset clause so the bill only survives a couple of years.  That will help focus the attention of the Government to have the model looked at, propose a new model if necessary, or reaffirm the current model if that is the right model.  Then, if they do find that there are still too many unanswered questions, they can come back with another bill and we will debate it again. 

The member for Apsley was talking about the impact on Hydro.  This bill will not impact on Hydro because Hydro was not expecting the extra revenue that was coming.  It will be revenue it would have had if it had continued, but it will not see a reduction in the forward Estimates because it was not factored into the forward Estimates; they did not know it was coming.  When the Government was talking about the big customers, the major industrials and the larger retail customers, they said that they are looking at a different mechanism to reduce their costs.  The Acting Leader said that we understand that those customers who contract directly with retailers such as medium-sized commercial and industrial customers also face challenges.  The Government has worked with Hydro recently and announced a price decrease for these larger customers.

Ms Rattray - That is where they are going to use the $15 million.

Ms FORREST - That is right.  That is not part of this; that is a separate process.

Ms Rattray - It is still a reduction in what Hydro Tasmania was going to have at some time on their books.

Ms FORREST - Yes, that was the regulator-contracted prices so they are going to pay less.  That will affect Hydro's revenues.

Ms Rattray - The honourable member is right; this bill will not affect it but there will be an effect on the bottom line.

Ms FORREST - It will affect the Government's decisions in relation to energy prices with the major industrials and large customers.  That is right.  I am sure the Acting Leader will direct me if I am wrong.   

Effectively, as the Acting Leader said, this bill will provide an alternative method to what we currently have and a process to be used by the Tasmanian Economic Regulator in setting the regulator's standing offer for tariffs each financial year.  It should only be in place for a couple of years until we look at the existing model and whether there needs to be a revised or new model.  If they find they need such an instrument again the government of the day can come back and be given a fair hearing again, as we are now.  In the meantime, they should focus their attention on looking at what is the best model. 

Is it right to decouple ourselves from the Victorian pricing arrangements?  Is there a better model or is that appropriate in the longer term?  Will the volatility continue?  Predictions say no.  They say it will reduce. There are better people than me who can predict those things.

I support the intent of the bill but will foreshadow another amendment in the Committee stage.

Debate adjourned.

Resumed from above.

[8.51 p.m.]

Ms FORREST (Murchison) - Mr President, I have an email from the Acting Leader's office forwarded on from Office of Parliament Counsel saying it is a little challenging to have a sunset clause in an amending bill.  The amending bill becomes part of the principal act at a later time.  I hope the Acting Leader does not wish to finish with this tonight because there needs to be further discussion to get this amendment right.

They have a draft amendment for me to consider.  I have only had time to read it between the briefings and returning here.  It does not give us a lot of time.  I accept there is a challenge here and I still intend to proceed with that.  If the Acting Leader is not willing to do that, I find myself in a position where we cannot proceed.