National Energy Guarantee is shifting costs from big businesses to people – it must be reviewed

10 August 2018

Before final sign off of the National Energy Guarantee, ACOSS are calling on COAG Energy Ministers to ensure people – not big corporations – get the full benefit from the Guarantee and that the target setting process supports rapid emissions reduction in the electricity sector.

COAG Energy Ministers today agreed to continue negotiations around the National Energy Guarantee (NEG), including releasing details of legislation for consultation before a final decision is made.

Dr Cassandra Goldie, CEO of ACOSS says a better arrangement for households and small business is worth fighting for.

“While we want to see a national energy policy in place that can rapidly reduce emissions and lower energy prices from their current high levels, it’s critical we get the final policy settings right,” says Dr Goldie.

“Unless two key changes are made, the National Energy Guarantee won’t deliver for people who are struggling including households, farmers, small businesses and people on low incomes.

“In the current design of the National Energy Guarantee, some of our biggest corporations, like oil and gas companies, are being given special treatment, leaving the rest of us to carry their costs.

“Giving big corporations cheaper energy, while expecting people in Australia to pay more for their energy bills – and forgoing the full benefit of the National Energy Guarantee – is nonsensical and unfair.

“Further modelling needs doing to demonstrate why big corporations are getting different rules. If the modelling shows additional support for those corporations is needed, that support should come from our Government’s budget, rather than be smeared across people’s electricity bills.

“We are also concerned the National Energy Guarantee’s emissions reduction target is woefully inadequate and will mean Australia will fail to contribute to global efforts to avoid more dangerous climate change.

“The federal Governments legislation to set emissions reduction targets for the electricity sector must include the capacity to easily increase the targets and ensure we cannot retreat from where we are.

“If COAG Energy Ministers can agree to not give special treatment to some industries and ensure the target setting process supports rapid emissions reduction in the electricity sector, the National Energy Guarantee could provide the basis for stable and durable emissions reductions framework.”

Key Facts

  • COAG has not approved the National Energy Guarantee.
  • COAG has agreed to continue negotiating.
  • COAG has agreed to release publicly a draft of the detailed legislation to amend the National Electricity Law (NEL). This is necessary legislation for implementation of a National Energy Guarantee.
  • COAG has also agreed to release publicly the Federal Government’s legislation on setting targets for the electricity sector.
  • The Victorian Government has asked for the release of the full modelling of the National Energy Guarantee, which was commissioned by the Energy Security Board, so that all States and Territories can understand more fully the implications of what they will sign off on.
  • The National Energy Guarantee may save households an additional $150 per year (real $2018). Modelling released by the Energy Security Board shows that under ‘business as usual’, the average household will save an estimated $400 dollars a year (real $2018) on their retail bill over the 2020’s relative to 2017-18 as a result of current investment. The National Energy Guarantee will not save households $550 a year.
  • The Federal Government must show why Energy Intensive Trade Exposed (EITE’s) corporations are being excluded from the emissions requirement of the National Energy Guarantee, and the likely consequences for all other consumers. This modelling must be undertaken, or if it has been completed, this modelling needs to be released.