Electricity Supply Amendment Bill
Page: 11574
In Committee
Consideration resumed from an earlier hour.
Clauses 1 to 4 agreed to.
Schedule 1
The Hon. Dr A. CHESTERFIELD-EVANS [5.06 p.m.], by leave: I move my amendments Nos 1 and 2 in globo:
No. 1 Page 4, schedule 1 [5], proposed section 18. Insert after line 8:
(2) It is a condition of a distribution network service provider's licence that any customer connection contract provide for the inclusion of any charges under that contract in the bill issued to the customer by the relevant retail supplier for the supply of electricity to the customer's premises.
No. 2 Page 5, schedule 1 [10], proposed section 33. Insert after line 8:
(3) Without limiting any other provision of this Act, it is a condition of a retail supplier's licence that any customer supply contract in force between the retail supplier and a customer provide for the inclusion of any charges under a customer connection contract relating to the customer's premises in the bill issued to the customer by the retail supplier for the supply of electricity to the customer's premises.
Basically these amendments require that electricity bills detail network charges separately from charges for electricity purchased. The advantage is that the customer will see how much the network charge is. This is similar to water bills, which detail a charge for connection to water and sewerage separately from the amount of water consumed. In that way people will be able to see where their money is going. This is quite important, because if the network gets a subsidy to do as it wishes, the market will be distorted. Sometimes big networks support existing generators rather than alternative or more diversified electricity suppliers.
There has been a lack of information available to network providers in relation to their customer base. This has meant that providers cannot buy electricity from their customers and route it more effectively in peak times; they have to build it from their known generators and augment from the network to take over high load at peak times. In effect, that means that there is too much investment in the network as opposed to alternative sources of supply, which is the opportunity cost of those networks.
The amendments facilitate the consumer being able to see the network charge separate from the electricity charge. They thus impose a discipline on the network, which the Democrats believe will make for a better electricity market and a more disciplined electricity market. Further, it will provide a discipline on the market which, when related to the central business district augmentation, has not behaved in as disciplined a fashion as it might have done.
The Hon. M. R. EGAN (Treasurer, Minister for State Development, and Vice-President of the Executive Council) [5.09 p.m.]: The Government does not believe that this amendment is necessary and therefore will not support it. The collection of charges for connection services by the retailer on behalf of the network service provider is to be dealt with through the market operation rules in the bill. A rule will be made to regulate agreements between distributors and retail suppliers. The content of those agreements will cover the collection of network charges.
The Hon. D. J. GAY (Deputy Leader of the Opposition) [5.10 p.m.]: Whilst the Opposition is not persuaded to support the amendments, the point that the Hon. Dr A. Chesterfield-Evans makes is valid, and the Minister's response answers it only in part. The Opposition asks that the Minister give an undertaking that there will be a delineation between the various charges under the billing process. We ask the Minister to clarify whether that is to be understood from his answer.
The Hon. M. R. EGAN (Treasurer, Minister for State Development, and Vice-President of the Executive Council) [5.11 p.m.]: I am advised that there seems to be no problem with including that undertaking in the rules.
Amendments negatived.
The Hon. Dr A. CHESTERFIELD-EVANS [5.11 p.m.], by leave: I move my amendments Nos 3 to 6 in globo:
No. 3 Page 8, schedule 1 [10], proposed section 35, line 11. Omit all words on that line. Insert instead:
(1) A retail supplier must not:
No. 4 Page 8, schedule 1 [10], proposed section 35, line 12. Omit “to” where firstly occurring.
No. 5 Page 8, schedule 1 [10], proposed section 35, line 13. Omit “to” where firstly occurring.
No. 6 Page 8, schedule 1 [10], proposed section 35. Insert after line 19:
Maximum penalty: 100 penalty units.
Amendments Nos 3 to 5 merely make semantic changes that the Parliamentary Counsel informs me are necessary to provide a penalty clause for retail suppliers who do not meet their obligations under the schedule—in other words, suppliers who do not supply electricity because a person uses an alternative electricity source. I simply make the point that if such a provision is made a term of a licence, if there are what seem to be relatively minor misdemeanours and the sanction is the loss of the licence, or some other major sanction, that sanction may never actually be invoked. Therefore a more minor sanction may be more appropriate.
I recall that when I used to complain about cigarette advertising on television a decision had to be made as to whether Channel 9 would lose its licence. Because that sanction was never applied, the ban on tobacco advertising simply never happened and therefore sponsorship continued. With regard to this legislation, where the offence might seem trivial in terms of such a large entity, we suggest that a smaller penalty may be more appropriate as it relates more directly to a failure to supply on the basis that the person uses alternative forms of energy and thus his or her account is worth less.
The Hon. M. R. EGAN (Treasurer, Minister for State Development, and Vice-President of the Executive Council) [5.12 p.m.]: The Government will not support the amendments. Currently the prohibition on a retail supplier discriminating against a person on the basis that the person uses alternative forms of energy is enforced as a licence condition. I am advised that both the Minister and the Independent Pricing and Regulatory Tribunal [IPART] can impose penalties for breach of licence conditions of up to—
The Hon. Dr A. Chesterfield-Evans: But will they?
The Hon. M. R. EGAN: I am not quite sure what that question means. There is always a discretion to impose a penalty. Surely the Hon. Dr A. Chesterfield-Evans is not suggesting that there should not be a discretion.
The Hon. Dr A. Chesterfield-Evans: No.
The Hon. M. R. EGAN: What are you suggesting?
The Hon. Dr A. Chesterfield-Evans: I want a guarantee—
The Hon. M. R. EGAN: I will not give you a guarantee if you do not know what you are asking for.
The Hon. Dr A. Chesterfield-Evans: I ask that small misdemeanours be dealt with other than by way of a condition of a licence. I ask that it not be an all-or-nothing penalty, but that minor breaches be dealt with as misdemeanours, if you like, and that a small penalty be applied instead of a huge penalty that is never invoked.
The Hon. M. R. EGAN: As I was pointing out, I am advised that there are penalties of up to $100,000 or, in cases in which IPART is involved, up to $10,000. It seems to me that what the Hon. Dr A. Chesterfield-Evans initially asked was quite different to his interjection. Therefore I must say I am still confused as to what the honourable member is on about—but that is not a new situation.
The Hon. Dr A. CHESTERFIELD-EVANS [5.15 p.m.]: I suggest that the Minister is not very well briefed on this legislation and therefore he is simply throwing stones. I suggest that what I have asked is perfectly clear. I ask that the Minister give a guarantee that the law will be enforced even for small breaches of retailers not supplying customers who use alternative energy sources. The Minister simply has to say, "Yes, in general we will enforce small breaches in this situation." That is all I ask. It is a very simple question.
The Hon. D. J. GAY (Deputy Leader of the Opposition) [5.16 p.m.]: The Opposition does not support the amendments moved by the Hon. Dr A. Chesterfield-Evans. I believe that the Minister has dealt with them adequately. The legislation provides maximum penalties and therefore provides for discretion. Statutory authorities have a responsibility to use their discretion. The Minister cannot answer on their behalf. It is not my normal procedure to answer on behalf of the Government, but in this case IPART and other bodies have a responsibility to operate. On my observation of Tom Parry and his crew, they operate quite professionally.
Amendments negatived.
The CHAIRMAN: Order! The Hon. R. S. L. Jones indicated during the second reading debate that he will not move his amendments.
The Hon. Dr A. CHESTERFIELD-EVANS [5.18 p.m.]: I move my amendment No. 7:
No. 7 Page 9, schedule 1 [10], proposed section 38A. Insert after line 35:
(7) Despite any other provision of this Act, a group of customers may negotiate a common retail tariff with a retail supplier for the purposes of entering into, or amending, negotiated customer supply contracts between the retail supplier and members of the group.
This amendment provides that a group of customers may negotiate a common retail tariff with a retail supplier for the purposes of entering into, or amending, negotiated customer supply contracts between the retail supplier and members of the group. In other words, a group of small customers—for example, owners in a block of units—may band together and say, "You can have all of us, or you can have none of us" and by that means obtain from a retailer a better deal than they would obtain if they were all individual customers. The object of the amendment is to effectively allow customers to form buying groups. I fear that such groups may otherwise be in breach of the Trade Practices Act, although I am not certain of that. Perhaps the Minister is able to provide a guarantee that buying groups would not be in breach of the Trade Practices Act. However, if the legislation were simply to provide for buying groups of small customers, that might encourage such groups and give consumers a better deal.
The Hon. M. R. EGAN (Treasurer, Minister for State Development, and Vice-President of the Executive Council) [5.19 p.m.]: I am again advised that currently under the Act these aggregation arrangements can take place, subject to customers being eligible to take supply on a negotiated basis. For that reason it does not appear that the Hon. Dr A. Chesterfield-Evans' amendment serves any purpose.
The Hon. D. J. GAY (Deputy Leader of the Opposition) [5.19 p.m.]: Whilst the amendment is commendable, I understand that local government can already do what is proposed in the amendment. The Minister's comments have cleared up any uncertainty.
Amendment negatived.
Ms LEE RHIANNON [5.20 p.m.]: I move Greens amendment No. 1:
No. 1 Page 11, schedule 1 [10], proposed section 40. Insert after line 16:
(h) the minimum proportion of electricity supplied under the contract that is to be sourced from a renewable supply,
The CHAIRMAN: Order! Copies of the amendment have not been circulated. The sitting will be suspended to allow that to be done.
[The Chairman left the chair at 5.21 p.m. The Committee resumed at 5.27 p.m.]
Ms LEE RHIANNON [5.27 p.m.]: This amendment will allow for a percentage of electricity to be sourced from renewable energy. I am disappointed that the Government does not support the amendment. If it did, that would give substance to the green hue that the Government periodically attempts to pull around itself. I have periodically worked in renewable energy. Not long ago alternative energy was a fringe issue but now it is most definitely mainstream.
I am surprised that the Government does not use every opportunity to promote it, both as a way of bringing clean, green energy to the State and also as a way of winning brownie points for itself. I note that the standard form customer contract is to be effected by regulations and that the Government can determine the proportion of renewable electricity supplied. We believe this should be a minimum of 2 per cent. We felt that it was not appropriate to impose that figure in the amendment, but we flag that 2 per cent is the proportion of power that the Federal Government is requesting the electricity industry to generate from renewables.
The Greens have not stated a figure but we believe that it is worth having a provision of the type envisaged by the amendment. By including a provision of that type, the Government could set a rate at zero per cent and later, when the climate is right, the provision could be developed. I look forward to the discussion during this Committee stage and to hearing from the Treasurer, who I hope will comment on the issue of renewable energy and how he sees that concept within the framework of the delivery of electricity within the State of New South Wales.
The Hon. M. R. EGAN (Treasurer, Minister for State Development, and Vice-President of the Executive Council) [5.30 p.m.]: The Government will not support the amendment moved by Ms Lee Rhiannon. Honourable members should be aware that this bill is not about greenhouse gas emissions: it is about consumer protection. The proposed amendments, including this one, moved by Ms Lee Rhiannon require the Independent Pricing and Regulatory Tribunal [IPART] to have regard to additional matters relating to greenhouse gas emissions when making a determination. At a practical level, the proposed amendments would be very difficult to administer by IPART, given the difficulty of calculating the impact of regulated retail tariffs on greenhouse gas emissions.
The level of IPART pricing affects the consumer's desire to consume electricity. Obviously, higher prices reduce consumption of greenhouse gases. If IPART were to consider the emissions' impact, that may lead to IPART determining a higher regulated retail tariff. Consequently, small retail customers—that is, the most vulnerable customers—would be required to bear higher electricity charges. I should also point out that licence obligations currently require retail suppliers to develop strategies for purchasing energy from sustainable sources. This bill is quite clearly about consumer protection measures and the matters referred to by Ms Lee Rhiannon are already contained in other parts of the legislation.
The Hon. D. J. GAY (Deputy Leader of the Opposition) [5.31 p.m.]: The Opposition does not support this amendment, nor does it support the other Greens amendments. The imposition of a minimum proportion of electricity supplied under a contract without stipulating a figure is strange, almost quaint, but the fact is that IPART has specific goals, one of which is looking after consumers. Frankly, in seeking to protect consumers in this instance, given that renewable energy is more expensive than are other forms of energy—without entering into an argument because, clearly, renewable energy is better in spite of its generation being more expensive—the amendment becomes a joke. Clearly, IPART will deliver electricity at an absolute minimum cost because its charter under this bill is to supply energy at a minimum price to consumers, or at least at a cost that is in the bottom range. The Greens amendment is a valiant attempt, but it is directed entirely at the wrong part of the wrong bill.
The Hon. Dr A. CHESTERFIELD-EVANS [5.33 p.m.]: The Australian Democrats support this amendment because we believe that it is an attempt to incorporate a minimum level of sustainable energy generation into the supply of electricity. The Australian target of 2 per cent is almost derisory when it is remembered that Europeans are talking about 10 per cent in spite of having more limited opportunities for the generation of energy from renewable resources than has Australia, especially from sunlight. Australian targets are very disappointing and it is also disappointing that this Government does not include at least a minimum level of electricity supply from renewable sources.
Bearing in mind that the Greens have not specified a level, the amendment is rather mild. The Greens have simply suggested that there should be a level of electricity supply from renewable sources and that gives the Government a great deal of scope to show its credentials. The Treasurer's response related more to some of the other Greens' amendments than it did to the amendment presently being discussed and I thought his very generic answer was very interesting. The suggestion of not dealing with greenhouse gas emission reductions because this provision relates to consumer protection should be considered against the background of the many economic signals that are being sent by this bill.
In order to effect policy, it is not good enough to simply state that the legislation contains only consumer signals and not signals for the reduction of greenhouse gas emissions, which are not the main theme of this bill and which are dealt with in other legislation. That is not a satisfactory response because either the Government is sending economic signals, or it is not. The amendment simply states that this bill should send a renewable resource signal and the Greens have not said how big the signal has to be. That is about as moderate a position as the Greens could possibly take and it is disappointing that neither one major party nor the other will support the amendment.
Reverend the Hon. F. J. NILE [5.34 p.m.]: The Christian Democratic Party does not support the amendment, because we understand, as has been stated by other honourable members during this discussion, that the purpose of the bill is to allow all electricity consumers the right to choose their retailers, while offering consumer protection to all customers who want it. The bill also seeks to establish by regulation a category of smaller retail customers so that they can be covered by a range of consumer protection measures. The whole thrust of the bill is consumer protection. Even though the Greens amendments may have value, this is not the correct legislation in which to incorporate them, particularly as this bill focuses on small retail customers. If these amendments were accepted, how would they apply to large businesses and other organisations that have already been covered by previous legislation? Acceptance of this amendment would lead to the establishment of a double standard.
Amendment negatived.
The Hon. Dr A. CHESTERFIELD-EVANS [5.36 p.m.]: I move Australian Democrats amendment No. 8:
No. 8 Page 11, schedule 1 [10], proposed section 40. Insert after line 18:
(2) A standard form customer supply contract must make provision for the repurchase of any surplus energy generated by the customer using green energy sources (as defined by the Sustainable Energy Development Authority) at a price not less than the price determined for the purposes of this subsection by the Tribunal.
The purpose of this amendment is to ensure that the legislation contains a requirement to purchase surplus energy that has been generated by the customer using green energy sources, as defined by the Sustainable Energy Development Authority [SEDA], at a price not less than that determined for the purpose of this clause by IPART.
Basically this amendment means that if people have photovoltaic cells on their roof and have invested in the purchase of equipment by utilising a subsidy—which, in some cases, has come from the Australian Greenhouse Office—with the intention of selling electricity back to the grid, and if the competitive market were such that managers at Energy Australia—which, to its credit, has been running schemes like this—decided, because of the pressure of competition, that it would not buy back electricity, any surplus energy produced by the photovoltaic equipment would not be purchased by that electricity supply authority or would be purchased at a derisory price. In those circumstances, the subsidy given to consumers and others who, hopefully, want to do their bit for Australia's greenhouse effort by investing in photovoltaic cells will have been wasted.
The Australian Democrats support the previous call by the Greens for IPART to set a price, which need not be the same as the amount shown on electricity meters. Most photovoltaic cells generate during the daytime when there is not a huge demand, whereas the peak load is during the evening. If the cells are generating at a time when there is not a huge demand the price may be a mean or statutory price and may be purchased at a rate that is slightly less than the price for which the supply company sells electricity. That is fair enough. Nevertheless, a price should be set by the tribunal.
If some retailers are short on greenhouse brownie points, hopefully at some future date the Government might set an enforceable target for greenhouse emission reduction levels—although it chose not to, during the vote on the previous amendment. The supply company may then wish to pay a higher price for the consumer's surplus electricity than the minimum price set by IPART in order to meet a percentage or target of power generated by the use of sustainable resources. In those circumstances, the supply company may wish to bid that up. The amendment principally provides the electricity supply company with an obligation and then proposes that a fair price be set by IPART. I ask honourable members to support the amendment.
The Hon. M. R. EGAN (Treasurer, Minister for State Development, and Vice-President of the Executive Council) [5.38 p.m.]: The Government will not support Australian Democrats amendment No. 8. I should point out that nothing in the bill precludes customers from entering into repurchasing arrangements with a retail supplier, but I think it has to be kept in mind that this legislation extends contestability to the smallest-scale consumer, if the consumer seeks to become a contestable customer.
It would be impractical for very small customers who have a solar device on a roof to sell whatever skerrick of energy is left over back into the grid. As a matter of commonsense that would be almost impossible. It would be a huge administrative burden and I believe the costs would be immense. Honourable members should bear in mind that the amendment would require that sort of arrangement for the very smallest of retail customers.
The Hon. D. J. GAY (Deputy Leader of the Opposition) [5.40 p.m.]: The Opposition does not support the amendment, but not for the reasons given by the Treasurer. The repurchase of surplus energy is already happening to a limited extent in New South Wales. However, I am concerned that, with the introduction of full contestability, our retailer and generator customers outside of New South Wales will not adhere to this amendment.
The Hon. Dr A. CHESTERFIELD-EVANS [5.41 p.m.]: I am concerned about the reasons given by the Deputy Leader of the Opposition for not supporting this amendment. Effectively he is saying that we will not win the race to the bottom. He is saying that our retailers may be disadvantaged by having to do something about the greenhouse effect when other States may not do anything.
The Hon. D. J. Gay: That is not what I said.
The Hon. Dr A. CHESTERFIELD-EVANS: That is the consequence of what the Deputy Leader of the Opposition said. I am disappointed, because other States should be following this example.
The Hon. M. R. EGAN (Treasurer, Minister for State Development, and Vice-President of the Executive Council) [5.41 p.m.]: I am further advised, as honourable members have pointed out, that some households already sell excess power into the grid. The amendment moved by the Hon. Dr A. Chesterfield-Evans would mean they would need a retail licence to do so.
Amendment negatived.
Ms LEE RHIANNON [5.42 p.m.], by leave: I move Greens amendments Nos 2 and 3 in globo:
No. 2 Page 14, schedule 1 [17], proposed section 43EB. Insert at the end of line 19:
(c) to any increase or decrease in the emission of greenhouse gases that it calculates will result from the determination, and
(d) to any increase or decrease in competition by sustainable energy production technology that it calculates will result from the determination.
No. 3 Page 14, schedule 1 [17], proposed section 43EB. Insert after line 32:
(5) A determination may require that a standard retail supplier not impose a tariff or charge that is the subject of a determination under this section unless the supplier complies with, or agrees to comply with, specified requirements, including (without limitation) any of the following requirements:
(a) a requirement that the charge or tariff be notified to the Tribunal or to another person in a specified manner and within a specified time,
(b) a requirement that the charge or tariff must first be approved by the Tribunal and that the supplier must comply with any conditions to which any such approval is made subject,
(c) a requirement that the charge or tariff be independently audited as directed by the Tribunal,
(d) a requirement that the supplier submit an annual report to the Tribunal, reporting on the matters and in the form required by the Tribunal,
(e) a requirement that the supplier implement such systems and processes as the Tribunal may direct.
These two amendments relate to the tribunal determining regulated retail tariffs and regulated retail charges. Amendment No. 2 adds paragraphs (c) and (d), to which the tribunal must have regard. The tribunal would need to have regard to any increase in the emission of greenhouse gases and any increase in competition by sustainable energy production technology that it calculates will result from its determination. Obviously, by the thrust of our amendments, we consider it important to have clear regard to these matters. It is proper for the tribunal to delve into this area. I am aware that the Government will not support these amendments. We are constantly told the bill is about consumer protection. I suggest that a narrow definition of "consumer protection" is being given here. The best way to give protection to consumers is by taking every opportunity to promote renewable energy.
The Hon. Dr A. CHESTERFIELD-EVANS [5.44 p.m.]: The Australian Democrats distinguish between the two amendments. We support the concept of Greens amendment No. 2. However, my consultant informs me that he needs a new car and this amendment will help him get one. While it is desirable to calculate the amount of greenhouse gases that would result from a determination of the Independent Pricing and Regulatory Tribunal, the methodology of the calculation is extremely difficult. My consultant would be able to buy a new car with the consulting fees generated by this amendment. In that regard he thinks the amendment is a good idea, but methodologically he considers it is too difficult. Although the thrust of the amendment is supported, the practicalities are too difficult. We do not support the amendment, but we support its intention. We do not have a problem with amendment No. 3.
Amendments negatived.
Ms LEE RHIANNON [5.45 p.m.]: I move Greens amendment No. 4:
No. 4 Page 15, schedule 1 [17], proposed section 43EC. Insert after line 6:
(2) The determination is to include a statement of:
(a) the amount of any increase or decrease in the emission of greenhouse gases that the Tribunal has calculated will result from the determination, and
(b) the amount of any increase or decrease in competition by sustainable energy production technology that the Tribunal has calculated will result from the determination.
This amendment ensures that a notice is published in the Government Gazette which notes the impact that retail tariffs and regulated retail charges determination will have on greenhouse gas emissions and other competitiveness of the renewable energy production industry. The amendment adds these two factors to the matters to be published in the Government Gazette. The amendment will provide more accountability and openness about these measures. I commend the amendment.
Amendment negatived.
The Hon. Dr A. CHESTERFIELD-EVANS [5.46 p.m.]: I move Australian Democrats amendment No. 9:
No. 9 Page 19, schedule 1 [17], proposed section 43EK, lines 18-28. Omit all the words on those lines. Insert instead:
(a) to maintain the viability of standard retail suppliers who supply electricity at regulated retail tariffs, and
(b) to fund public benefit activities prescribed by the rules, and
(c) to be transparent in its operation.
This amendment is designed to improve the objectives of the retail tariffs equalisation fund. It will be required to maintain the viability of standard retail suppliers who supply electricity at regulated retail tariffs, to fund public benefit activities as prescribed by the rules—which will be defined by the Government in the regulations—and to be transparent. Transparency of the operation of the fund is extremely important. As I outlined in my second reading speech, the fund, as constituted, lacks transparency.
The Hon. D. J. GAY (Deputy Leader of the Opposition) [5.47 p.m.]: The Opposition is persuaded by part of this amendment. We agree with paragraph (a), with slight changes, and with paragraph (c). However, paragraph (b), which states, "to fund public benefit activities prescribed by the rules", is well outside the ability of the fund. The fund will have enough trouble getting the numbers right without having to take on matters that are well and truly outside its ability and charter. Although the Hon. Dr A. Chesterfield-Evans has done a great deal of work on this amendment, the Opposition proposes an amendment to his amendment, which we have circulated. In paragraph (a) we change "viability" to "ability" and "who" to "to", we omit paragraph (b) and leave paragraph (c) as it is. Therefore, I move the amendment to the amendment as follows:
Page 19 , schedule 1 [17] proposed section 43EK, lines 18-28. Omit all words on those lines. Insert instead:
(a) to maintain the ability of standard retail suppliers to supply electricity at regulated retail tariffs, and
(b) to be transparent in its operation.
I hope that honourable members will support this amendment to the amendment.
The Hon. M. R. EGAN (Treasurer, Minister for State Development, and Vice-President of the Executive Council) [5.50 p.m.]: The Government has no problem with the amendment to the amendment moved by the Deputy Leader of the Opposition, but I really think that this amendment should be moved as a separate Opposition amendment.
The Hon. D. F. Moppett: How do you define the word "transparent"?
The Hon. M. R. EGAN: It is one of those buzz words. The Government has no problem with the amendment moved by the Deputy Leader of the Opposition but I think he moved it as an amendment to the amendment of the Hon. Dr A. Chesterfield-Evans. The Committee should vote against Australian Democrat amendment No. 9 and the Deputy Leader of the Opposition should then move his amendment.
The Hon. D. J. Gay: I will move it at the same time.
The Hon. M. R. EGAN: Will the Hon. Dr A. Chesterfield-Evans withdraw his amendment?
The Hon. Dr A. Chesterfield-Evans: I will accept the amendment moved by the Deputy Leader of the Opposition to my amendment.
The Hon. M. R. EGAN: The Opposition's amendment is not an amendment to the amendment moved by the Hon. Dr A. Chesterfield-Evans. Therefore the honourable member should withdraw his amendment and accept the Opposition's amendment.
The Hon. Dr A. Chesterfield-Evans: Is the effect not the same?
The Hon. M. R. EGAN: The effect is the same. However, because of the terms of the amendment moved by the Deputy Leader of the Opposition there is no way in which that amendment will amend the amendment moved by the Hon. Dr A. Chesterfield-Evans. The Hon. Dr A. Chesterfield-Evans should withdraw his amendment and the Deputy Leader of the Opposition should then move his amendment.
The Hon. D. J. Gay: My handwritten amendment referred to lines 18 to 28. The amendment should, in fact, refer to lines 18 to 21.
The Hon. Dr A. CHESTERFIELD-EVANS: [5.51 p.m.], by leave: I withdraw Australian Democrat amendment No. 9.
The Hon. D. J. GAY (Deputy Leader of the Opposition) [5.52 p.m.]: I move Opposition amendment No. 9:
No. 9 Page 19, schedule 1 [17] proposed section 43EK, lines 18-21. Omit all words on those lines. Insert instead:
(a) to maintain the ability of standard retail suppliers to supply electricity at regulated retail tariffs, and
(b) to be transparent in its operation.
I acknowledge that this amendment is based on the work done by the Australian Democrats.
Amendment agreed to.
The Hon. Dr A. CHESTERFIELD-EVANS: [5.52 p.m.]: I do not propose to move Australian Democrats amendments Nos 10, 11, 12 and 13.
Ms LEE RHIANNON [5.53 p.m.], by leave: I move Greens amendments Nos 5 and 6 in globo:
No. 5 Page 22, schedule 1 [17], proposed section 43EO. Insert after line 22:
(3) The Treasurer must ensure that rules are in force under this section that provide that the following procedures must be complied with in connection with the making of a payment to or from the Fund:
(a) a payment is not to be made until the Treasurer has caused notice of the proposal to make the payment to be published in the Gazette, specifying to whom or by whom the payment is proposed to be made and whether any amount is proposed to be paid into the Consolidated Fund,
(b) the notice of the proposal must include a statement of:
(i) the amount of any increase or decrease in the emission of greenhouse gases that the Treasurer has calculated will result from the payment, and
(ii) the amount of any increase or decrease in competition by sustainable energy production technology that the Treasurer has calculated will result from the payment,
(c) the notice of the proposal must invite comment on the proposal and the Treasurer must consider any comments received in response to that invitation,
(d) the Treasurer must, by a further notice in the Gazette, indicate whether those comments were accepted or rejected and give the Treasurer's reasons for accepting or rejecting them,
(e) the Treasurer is to cause notice of all payments into and from the Fund to be published in the Gazette within 14 days after they are made, with the notice stating the amount paid, to whom or by whom it was paid and whether any such payment was into the Consolidated Fund.
No. 6 Page 23, schedule 1 [17], proposed section 43EO. Insert after line 20:
(9) A copy of the rules approved under this section, as in force for the time being, is to be published on the Government's Internet web page, together with copies of all notices published under subsection (3) (e).
Amendment No 5 will ensure that the dealings of the Electricity Tariff Equalisation Fund are transparent—something that is badly needed, something to which the Government is committed, and something that must be locked in. The Government has broad powers in relation to the fund. The amount of money involved in the fund would be about $100 million a year under current electricity pricing. Minor price increases in electricity will result in that fund increasing to many hundreds of millions of dollars. We need proper scrutiny and oversight of this process.
The amendment outlines a range of procedures with which the Treasurer would then have to comply in connection with the making of a payment to or from the fund. I strongly commend amendment No. 5 to the Committee. Amendment 6 will provide access to information by the public other than through the Government Gazette, and in a more accessible manner. It will ensure that information is available on the Internet. That neat package of two amendments will result in more information being made available and the whole process being made more transparent. I commend both amendments to the Committee.
The Hon. M. R. EGAN (Treasurer, Minister for State Development, and Vice-President of the Executive Council) [5.54 p.m.]: The Government may well be able to accept most of Greens amendment 5.
The Hon. Dr A. CHESTERFIELD-EVANS: [5.55 p.m.]: I support Greens amendment 5, with the exception of proposed subsection 3 (b). As I said earlier in Committee when we were debating Greens amendment 2, this amendment will present industry with the same problem: the methodological quantification of the implications of the change in tariffs on greenhouse gas emissions. If proposed subsection 3 (b) of amendment 5 is deleted, the Australian Democrats will accept and support the amendment. I move:
That amendment No. 5 be amended by deleting paragraph (b).
The Hon. M. R. EGAN (Treasurer, Minister for State Development, and Vice-President of the Executive Council) [5.56 p.m.]: The Government cannot support the amendments moved by Ms Lee Rhiannon. When I was speaking earlier the numbers to which my notes refer were different from the numbers that applied to the Greens amendments, so I was actually speaking to something different. I am advised that the proposed amendments are not practical as they will delay the process of payments into and out of the fund. As a consequence, this will expose the fund to the additional risks that it was designed to avoid.
These payments have been designed to occur within the national electricity market settlement process, which operates within a strict time frame. For example, retailers may receive only two days notice of a requirement to make payments to the fund. The measures proposed would necessitate significant administrative resources to support their implementation. Of course, transparency in the operation of the fund will be achieved by the Auditor-General's scrutiny under the Public Finance and Audit Act. Greens amendment 6 seeks to ensure that the rules for the fund are made public. The Government is willing to support that amendment, subject to the removal of the reference to proposed subsection 3 (e) in Greens amendment 5. So the Government opposes proposed subsection 3 (e) in Greens amendment 5.
The Hon. D. J. Gay: Why do you oppose proposed subsection 3 (e)? It is the most sensible part of the amendment.
The Hon. M. R. EGAN: Proposed subsection 3 (e) states:
(e) the Treasurer is to cause notice of all payments into and from the Fund to be published in the Gazette within 14 days after they are made, with the notice stating the amount paid, to whom or by whom it was paid and whether any such payment was into the Consolidated Fund.
The Hon. D. J. GAY (Deputy Leader of the Opposition) [5.58 p.m.]: That is not slowing up anything. It is transparency and accountability. I would like to hear what the Treasurer has to say about Greens amendment 5, especially when we take into consideration that proposed subsection 3 (e) states:
(e) the Treasurer is to cause notice of all payments into and from the Fund to be published in the Gazette within 14 days after they are made, with the notice stating the amount paid, to whom or by whom it was paid and whether any such payment was into the Consolidated Fund.
I accept the concerns expressed earlier by the Treasurer and the Hon. Dr A. Chesterfield-Evans relating to payments and to greenhouse gas emissions. However, this is a sensible amendment to the bill. So far as I can see it is all about accountability and transparency and it will not inhibit the operation of the fund. I will be interested to hear the Treasurer's reply.
The Hon. M. R. EGAN (Treasurer, Minister for State Development, and Vice-President of the Executive Council) [5.59 p.m.]: I am advised that the information in subsection 3 (e) of Greens amendment 5 would be information that the Auditor-General would need to report on each year anyway, so I am not sure what public purpose subsection 3 (e) is meant to serve, particularly in view of the administrative nightmare it would create. Although the Government will not support Greens amendment 5, I have indicated that the Government would support Greens amendment 6 if reference to subsection 3 (e) were deleted, so that the Greens amendment 6 would read:
(9) A copy of the rules approved under this section, as in force for the time being, is to be published on the Government's Internet web page.
The Hon. D. J. GAY (Deputy Leader of the Opposition) [6.00 p.m.]: Would the Auditor-General publish all information or only the information in relation to which the Auditor-General believes there is a discrepancy or a problem? I would be pleasantly surprised if the Minister indicated that the Auditor-General would be publishing all the information.
The Hon. M. R. Egan: No, I would not suggest that the Auditor-General would report on each individual payment that was made.
The Hon. D. J. GAY: That was the inference.
The Hon. M. R. EGAN [6.01 p.m.]: No. Certainly total payments into and from the fund in any one year to or from a retailer would be included in the accounts that the Auditor-General would audit. The notion that every time a payment is made into or out of the fund it has to be published in the Government Gazette within 14 days would be administratively quite burdensome and I am not sure what public purpose would be served by it.
Ms LEE RHIANNON [6.02 p.m.]: Thank you for that clarification. The Greens would be willing to remove paragraph (b) from amendment 5 because the Coalition has indicated that without those words the measure deserves support. Regarding paragraph (e), will the Treasurer provide more information? On the one hand he said it already happens and on the other hand he said it would be an administrative nightmare. That is contradictory. If the information is there, why is it an administrative nightmare?
The Hon. M. R. EGAN (Treasurer, Minister for State Development, and Vice-President of the Executive Council) [6.03 p.m.]: Payments into and out of the fund would obviously form part of the financial statements of the retailers, which are produced and audited every year. Greens amendment 5 not only seeks to ensure that rules are in force, it details some rather micro management procedures which need to be complied with in connection with the making of a payment to or from the fund. Under this proposed amendment a payment cannot be made until I have caused notice of the proposal to make the payment to be published in the Government Gazette, specifying to whom or by whom the payment is proposed to be made and whether any amount is proposed to be paid into the Consolidated Fund.
The Hon. D. J. Gay: It is a copy of what you have done.
The Hon. M. R. EGAN: What do you mean by what I have done?
The Hon. D. J. Gay: It is a copy of money that was transferred. It is not a huge amount of bookwork.
The Hon. M. R. EGAN: Do you want to try and jump over the files I have to go through every week? This is just nonsense.
The Hon. Dr A. Chesterfield-Evans: You should have a more streamlined procedure, Minister.
The Hon. M. R. EGAN: I would expect that sort of comment from a buffoon.
Ms LEE RHIANNON [6.04 p.m.]: In view of the discussion, I ask that Greens amendments Nos 5 and 6 be dealt with seriatim.
Amendment of amendment No. 5 agreed to.
Greens Amendment No. 5 as amended agreed to.
Ms LEE RHIANNON [6.06 p.m.]: I note the comments of the Treasurer about the possibility of the Government supporting Greens amendment 6 with the deletion of all words after "web page". Therefore, I seek leave to remove all words after the words "web page".
Leave granted.
Amendment amended.
The Hon. M. R. EGAN (Treasurer, Minister for State Development, and Vice-President of the Executive Council) [6.06 p.m.]: The Government will support the amendment with the exclusion of those words. The Deputy Leader of the Opposition asked me to guarantee that the financial statements of the fund will be audited by the Auditor-General. I can give that guarantee. He will audit those as he would audit the financial statements of any agency or fund of government.
The Hon. D. J. GAY (Deputy Leader of the Opposition) [6.07 p.m.]: There may have been some confusion. I asked that those earlier details be examined and published in the Auditor-General's report rather than being done on a weekly basis.
The Hon. M. R. Egan: I do not imagine that the Auditor-General would necessarily report on all payments into and out of the fund.
The Hon. D. J. GAY: It is just a matter of publishing something that is provided to him.
The Hon. M. R. EGAN (Treasurer, Minister for State Development, and Vice-President of the Executive Council) [6.08 p.m.]: Do you think that every time there is a payment into or out of the fund that those administering the fund will write a note to the Auditor-General saying, "Today at 10.30 a.m. we received a payment and last week at 4.15 p.m. we made a payment"?
The Hon. D. J. Gay: You know that is patently silly. You are being farcical.
The Hon. M. R. EGAN: That is what this is calling for; it is what this is all about. It is farcical, but anyway it has been defeated.
The Hon. D. J. GAY (Deputy Leader of the Opposition) [6.08 p.m.]: Further to the discussion that the Treasurer and I had, at the end of the year the details of the transactions that are conducted in and out will be presented to the Auditor-General. I made a simple request that he publish his report and the details of those transactions in and out that have been supplied to him.
The Hon. M. R. EGAN (Treasurer, Minister for State Development, and Vice-President of the Executive Council) [6.09 p.m.]: Would the Deputy Leader of the Opposition tell me the purpose of providing almost day-by-day information, so that I can at least consider a response? I am not quite sure what purpose is served by that.
The Hon. D. J. GAY (Deputy Leader of the Opposition) [6.09 p.m.]: Obviously it is about accountability and transparency, to enable one to see clearly how particular operations are conducted for the people of the State. If, as the Government says, it works perfectly well and there are no problems, that will highlight that I am wrong. However, if there are problems, they will become transparent and will be highlighted to the taxpayers of New South Wales at an earlier stage.
The Hon. M. R. EGAN (Treasurer, Minister for State Development, and Vice-President of the Executive Council) [6.10 p.m.]: The Auditor-General can report in any way he chooses to report. He can report with a one line statement or with an extensive report. It would be like saying that when auditing and reporting on the financial statements of Sydney Water the Auditor-General should have a list of every payment made to and received by Sydney Water, which would be clearly ludicrous.
The Hon. D. F. Moppett: A cash flow statement.
The Hon. M. R. EGAN: A cash flow statement is different. It is not a list of all payments in and out.
The Hon. D. F. Moppett: But it should be.
The Hon. M. R. EGAN: It is an in globo statement.
The Hon. D. J. Gay: You know quite well it is not a summary of paper clips or petrol provided to cars. They are payments in and out to balance the Electricity Tariff Equalisation Fund.
The Hon. M. R. EGAN: The Auditor-General would have to tick off on that in certifying the accuracy of the financial report of the fund. Does the Chairman understand that?
The CHAIRMAN: I do.
Ms LEE RHIANNON [6.11 p.m.]: It is interesting when one gets down to tin tacks that the matter the Treasurer is making out to be a problem is not a problem in modern accounting procedures. We are discussing proposed subsection 3 (e)—
The Hon. M. R. Egan: We have gone past that.
Ms LEE RHIANNON: With all due respect, that is what the Treasurer and the Deputy Leader of the Opposition have been debating, and it is fair for me to enter the debate. That proposed subsection refers to specific information being made available. I emphasise that with modern accounting procedures in both Excel and Lotus these days as the industry standards, that information is available at the push of a button. This problem is not about making information available but, as we so often face, it is about a lack of political will and commitment to transparency and to share with the public what is going on. I just want to bring this matter back to tin tacks: It is not a problem about accounting.
Greens amendment No. 6 as amended agreed to.
The Hon. Dr A. CHESTERFIELD-EVANS [6.13 p.m.]: I move my amendment No. 14:
No. 14 Page 42, schedule 1 [56], proposed section 96B. Insert after line 14:
(7) An electricity industry ombudsman under an approved electricity ombudsman scheme must report to the Minister annually as to complaints under the scheme and actions taken in response to complaints. The Minister must cause the reports to be published.
This amendment ensures that there will be an electricity industry ombudsman who will report annually and that the Minister will publish the reports.
The Hon. D. J. GAY (Deputy Leader of the Opposition) [6.13 p.m.]: This amendment should be supported. I spoke to the staff of the Minister, who assured me that the Treasurer would indicate where this would appear in the regulations. I listened carefully to the Treasurer and he referred to that, unlike other matters that I asked for.
Amendment negatived.
The Hon. Dr A. CHESTERFIELD-EVANS [6.14 p.m.]: I move my amendment No. 15:
No. 15 Page 44, schedule 1. Insert after line 8:
[64] Schedule 2, clause 8 (1A) and (1B)
Insert after clause 8 (1) of schedule 2:
(1A) If the holder of a retail supplier's licence contravenes a condition of the licence of a kind referred to in clause 6 (4) (a), such a contravention being established by the contents of an annual report published by the retail supplier as referred to in clause 6 (4) (d):
(a) the retail supplier must pay a penalty of $10 per tonne of carbon dioxide equivalent emissions per year for every tonne by which the emissions arising from the production of electricity supplied by it (as measured and reported in accordance with the methodology referred to in clause 6 (4) (d) (ii)) exceeds the retail supplier’s annual greenhouse gas emissions benchmarks referred to in clause 6 (6) (a), and
(b) it is a further condition of the retail supplier's licence that any penalty arising under paragraph (a) must be paid within 6 months after the date on which the annual report is published.
(1B) Any penalty under subclause (1A) is to be paid into the Sustainable Energy Fund referred to in section 23 of the Sustainable Energy Development Act 1995.
The benchmark referred to in proposed paragraph (a) means that retailers will have an obligation to have a certain amount of green energy, and if it is not met, the penalty is $10 per tonne. That will favour the buying of their energy from cleaner sources. Far be it for me say that New South Wales black coal is cleaner than Victorian brown coal, but if there were any effect on the market New South Wales greener generation would be favoured over Victorian generation. But the intention of the amendment is to make sure that if the targets which have always been ignored are not met penalties will be imposed, and it feeds into a market system.
The Hon. D. J. GAY (Deputy Leader of the Opposition) [6.16 p.m.]: The Australian Democrats amendment is much better than the Greens amendment because the Democrats have actually gone to the retailer rather than the supplier. They have not inadvertently disadvantaged New South Wales generators against other States. Having said that, the Opposition will not support this amendment because it is quite clearly outside the leave of the bill. To try to put something like that in what is basically a fairly good bill runs the risk of destroying the whole bill.
Amendment negatived.
Schedule 1 as amended agreed to.
Schedule 2 agreed to.
Title agreed to.
Bill reported from Committee with amendments and passed through remaining stages.