Australia news live: parliament recalled after national cabinet strikes $1.5bn energy deal

PM announces four-point plan to target power prices

Albanese confirms what Amy Remeikis wrote below – parliament will be recalled to deal with the legislation. He says there are four components to the government’s strategy. There will be a mandatory code of conduct on the gas industry, with a cap of $12 a gigajoule in place for 12 months – the Australian Competition and Consumer Commission will monitor that.

Then there will be a temporary coal price cap of $125 a tonne, “nationally targeted bill relief” with the Commonwealth providing up to $1.5bn to the state governments to reduce power bills (which will be “deflationary” rather than inflationary), and “securing our energy future” by investing in capacity and energy transmission.

Key events

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Definitely the last one … right?

federal MPs have been told to come back to Canberra on Thursday (Dec 15) to deal with the energy plan, for one final FINAL sitting day for 2022

no Question Time scheduled for that day

— Josh Butler (@JoshButler) December 9, 2022

Here’s prime minister Anthony Albanese giving a Covid-style press conference at Kirribilli House – note his masked press secretary keeping his distance as he holds out his phone for the journalists calling in with their questions.

Prime minister Anthony Albanese takes questions from journalists via an advisor’s mobile phone during a press conference while isolating with Covid-19, at Kirribilli House in Sydney.
Prime minister Anthony Albanese takes questions from journalists via an advisor’s mobile phone during a press conference while isolating with Covid-19, at Kirribilli House in Sydney. Photograph: Dan Himbrechts/AAP
Christopher Knaus

Christopher Knaus

Bruce Lehrmann’s defence team adds to calls for a public inquiry

Varying calls for an inquiry have now been made into the handling of the case by all parties by the police union, prosecutors, and now the defence team.

Steven Whybrow, the barrister who represented Lehrmann at trial, said:

We would welcome an inquiry into every aspect of this matter.

The rift between the director of public prosecutions, Shane Drumgold SC, and elements of the police force were exposed this week, after the Guardian revealed Drumgold had complained to police chief Neil Gaughan about the alleged conduct of his officers during the trial and investigation.

Drumgold alleged that he had been subjected to a clear campaign of pressure to agree with the police position, which was not to charge Lehrmann.

He also alleged Brittany Higgins had been bullied by investigators and had to insulate herself from contact with them.

Drumgold’s allegations are being examined by the Australian Commission for Law Enforcement Integrity.

The Australian Federal Police Association has described the allegations as a smear and hit out at the freedom of information process used to release Drumgold’s letter of complaint.

Lehrmann has consistently maintained his innocence and pleaded not guilty to one charge of sexual intercourse without consent.

He says no sexual activity occurred with Higgins, a fellow political staffer. The collapse of the trial due to juror misconduct last month leaves him with the presumption of innocence.

Peter Hannam

Peter Hannam

Power bills to shrink via lower wholesale prices and rebates

We have some clarity from officials about how things are supposed to work. Price caps will apply to gas and coal this side of Christmas.

As these fuels help set wholesale power prices across the national electricity market, the caps will nudge spot prices lower and eventually that will benefit electricity users big and small. (Lower gas prices also help users of gas.)

This fiscal year’s power price increases are basically already in the bills. Next fiscal year (eg July 2023 onwards) instead of rising 36%, they will only rise 23%, treasury has modelled.

Average households will be $230 better off next financial year than they would otherwise have been.

The benefits will be increased if you’re a household or small business eligible for the $1.5bn of rebates that the Commonwealth and state/territory governments will divvy up. That will vary across the states (and no doubt be a source of complaints).

It’s not very clear where the $12/gigajoule price gap for gas came from but there is some logic apparently for the $125/tonne for black coal. That’s the price that generators were paying (outside long-term contracts) for coal in 2021 before Russia invaded Ukraine and distorted energy prices everywhere.

The $125/t figure is apparently the marginal price that thermal coal miners were getting, so they won’t have an incentive to cut back on production. (Global prices have been running at about $600/t so they’ve also been minting money.)

As for the inflation effects. Well, by pushing down wholesale power prices and channelling the money via usual benefit payments, it’s apparently NOT going to push up inflation. In fact, treasury estimates it could lop half a percentage point off inflation next year (presumably the fiscal one).

Now Dutton’s accusing Queensland premier Annastacia Palaszczuk of selling out Queenslanders as a political favour to prime minister Anthony Albanese.

Energy minister Chris Bowen was “probably the most hopeless” minister in the Rudd/Gillard cabinet, Dutton says. This will turn out to be a “catastrophic decision”, he says.

Dutton says Albanese promised the public 97 times that power bills would come down by $275. “The prime minister can’t have it both ways. I think the Australian public is starting to see here a real pattern,” he says. “Everything is going up.”

Queensland’s shadow energy minister, Ted O’Brien, says Labor’s package will push supply down. “They are introducing measures to kill off the supply of gas,” he says.

Albanese broke promise on power bills, Dutton says

Opposition leader Peter Dutton says prime minister Anthony Albanese’s promise to bring power bills down by $275 is a “significant broken promise”.

“It’s obviously there’s a fracturing between the states and territories and the commonwealth,” he says, calling the prime minister’s press conference a “train wreck”.

(That’s not exactly how it’s been portrayed so far.)

He’s attacking the government over cost of living, inflation, and interest rises.

Power prices are going up and up under the Labor party and Australian families and small businesses who thought they were going to get relief under this government are not.

Daniel Hurst

Daniel Hurst

Australia’s defence buildup a direct response to China, defence minister says

The deputy prime minister, Richard Marles, has explicitly blamed China’s rapid military buildup for Australia’s own ramp-up in defence spending.

It is no secret that concerns about China – including its intentions towards Taiwan and its militarisation of disputed features in the South China Sea – have been driving Australia’s defence strategy.

But Marles put it very directly in a speech in Japan this afternoon, saying Australia’s increasing investment in its defence capabilities was “a prudent and necessary response to the arms buildup we see occurring in the Indo-Pacific”.

He told the Sasakawa Peace Foundation in Tokyo:

One of the most consequential features of our region today is the scale of China’s military power. It is the largest military buildup since World War Two. And it is occurring without transparency or reassurance to the region of China’s strategic intent.

This is the most significant factor shaping the strategic landscape in which Australia and Japan exist.

Years after Tony Abbott labelled Japan as Australia’s “best friend in Asia”, Marles put it this way: “When it comes to friends for Australia, Japan stands in the front row.”

The Australian government position is to oppose any unilateral change to the status quo in Taiwan, the self-governing democracy that China claims as its province and has not ruled out taking by force.

Marles said Australia and Japan condemned Russia’s “immoral and illegal invasion [of Ukraine] in the strongest possible terms”. He said it was also important to “make sure such a conflict does not repeat, particularly within our own region, which is now at the centre of global strategic competition”.

He said navigating this more complex period would require “wise, sober and responsible statecraft” and cited the ongoing efforts to “stabilise” the relationship between Australia and China. He mentioned “the stabilising influence of guardrails and dialogue”, adding:

I am pleased that two weeks ago in Siem Reap, China and Australia agreed to reactivate longstanding defence talks. Australia is committed to resolving differences through dialogue, and investing in inclusive regional architectures such as ASEAN – to ensure we can continue to protect our collective security and prosperity.

But we must also deal frankly with the risks we face – and that is what Australia is doing.

Marles also spoke positively about the idea of Japan participating in Aukus initiatives related to advanced technologies. This is not the nuclear-powered submarines part of Aukus, but the other advanced capabilities. It is not a new idea, but Marles is clearly keen on advancing it:

Aukus will also drive the development of other advanced capabilities, allowing our three countries to pursue advantage in undersea and electronic warfare, hypersonics and counter-hypersonics, advanced cyber and quantum technologies and artificial intelligence.

Aukus is a capability and technology partnership; one which we hope will form part of a broader network Australia seeks to build, in which Japan is central.

My intent is to grow defence industry integration with Japan: bilaterally, through our trilateral mechanisms with the United States, and, when ready, via our advanced capabilities work in Aukus, as well.

Australia’s deputy PM and defence minster, Richard Marles, with the foreign minister, Penny Wong, in Japan today.
Australia’s deputy PM and defence minster, Richard Marles, with the foreign minister, Penny Wong, in Japan today. Photograph: Philip Fong/AP

Andrew Barr, the ACT’s chief minister, says his government welcomes the federal government’s $1.5bn package. He says:

Through the ACT government’s investments in long-term renewable energy contracts, ACT residents and businesses are far less likely to experience the sort of energy prices rises other jurisdictions are anticipating in the coming years.

The ACT… agreed to be involved in the development a co-funded national energy bill rebate to help soften the impact of rising energy prices on low income consumers through temporary and target on-bill rebates.

Antoun Issa has rounded up all the news and whipped it into shape for you – here’s today’s afternoon update:

Here’s a statement from prime minister Anthony Albanese on today’s meeting:

Benefits of government energy plan will take time to sort out

Peter Hannam

Peter Hannam

Those hoping for immediate energy price relief from today’s national cabinet meeting will be disappointed. Any direct benefits will only flow from the second quarter (April-June) next year.

Still, there may be some benefit from capping the gas price at $12/gigajoule and coal at $125/tonne. PM Anthony Albanese cited Clare Savage, chair of the Australian Energy Regulator, as saying having the Commonwealth talking about the issues had put “downward pressure on prices”.

That we’re guessing the PM was referring to the wholesale electricity market – where coal and gas can be the price-setter. Wholesale prices make up about a third of retail bills.

Putting a lid on those fuels will help. But we weren’t told what the modelling tells the governments will happen.

The fact the support will be for households and small businesses, when the $1.5bn in rebates start to flow to consumers.

There’s no definition of what counts as a small business, which means big firms won’t get any direct aid. Sort of what we anticipated here:

The govt is saying that the forecast gas price increase of 20% this year and next, will now be 18% and 4% (that’s this fiscal year and next).

The $125/t coal price was based on the price paid in 2021 for black coal in NSW and Queensland before the Russian invasion.

It’s also the highest cost of thermal mining, so the cap would NOT discourage production. The coal cap will take effect next week.

More soon when we get additional details.

Queensland premier, Annastacia Palaszczuk, is talking now. She says she’s glad the caps are a temporary measure and that Queensland and the Commonwealth will work to get pumped hydro works up. And there will be the energy bill relief as well, she says.

“There’s been a lot of behind-the-scenes discussions,” she says. “But at the end of the day we work best when we work together and I’m absolutely pleased with the outcome that’s been achieved today.”

Nationals ‘premature’ on voice decision, says Pyne

On another topic, Pyne says the Nationals have been “a bit premature” with their opposition to the voice to parliament. Most people are in favour, he says (including himself) but says the federal government will need to carefully consider its strategy to get it passed at a referendum.

Former Liberal minister, Christopher Pyne, is – unsurprisingly – critical of the government’s plan. “It could well unravel,” he says. And “it has a lot of hairs on it”, he tells the ABC’s afternoon briefing.

Albanese winds up by saying the treasurers will work through the details in the coming weeks and report back to national cabinet early next year, before the payments start in the second quarter of next year.

Albanese is asked if the government is considering a longer term gas reserve, but he says they’re focussing on the immediate issues:

As a result of the Russian invasion of Ukraine, and the changes that have occurred as a direct result of that, and of where we were in the market. Can I also say that as a result of the measures that we have taken, one of the things that we were very careful of doing was to not deal with or not interfere with any of the existing export systems that are in place.

So, we wanted to make sure there were [no] issues of sovereign risk, Australia remains a country where you can trade with certainty.

Treasurer Jim Chalmers will work with state premiers on how the payments will be delivered to those who already receive a Commonwealth payment.

The prime minister is asked how much of the projected 56% increase in power bills the government’s plan will knock off. He says:

What it will do is put downward pressure on those increases which were envisaged. If we sat back and didn’t take action, then we know that that impact would occur as was predicted by treasury.

But we make this point as well – we heard today from Clare Savage (the energy regulator). And one of the things that she reported was that there has already been some downward pressure on price as a result of the Commonwealth saying that we would take action.

So, we have already seen that downward pressure as a direct result of the statements that the Commonwealth has made since the budget.

Albanese says the caps will be in place for 12 months, and that Queensland (which owns its own generators, unlike other states), will get extra support through the Rewiring the Nation project.


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