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Turnbull power plan alarms investors: business

National

Business chiefs have warned the Turnbull Government a new plan to push down power prices could undermine investor confidence.

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But Energy Minister Josh Frydenberg says the Government has to put Australian needs first.

The Prime Minister yesterday announced new regulations to restrict gas exports and the axing of a process electricity companies use to justify power prices, known as the “limited merits review”.

As well, he’s asked the Australian Energy Market Operator to identify how best to ensure that the retirement of coal-fired power stations does not deliver a price shock to the market and destabilise the power grid.

The measures come as the part of the Government’s acceptance of all recommendations from the Finkel review except for adopting a clean energy target.

Business Council chief Jennifer Westacott said all Australians wanted more affordable electricity, but governments should not be intervening in markets when businesses were already not investing due to policy uncertainty.

Westacott said the best way to put downward pressure on gas prices was to increase supply.

“This kind of intervention in the gas market has the potential to further undermine confidence in Australia as a place to invest,” she said.

“Weakened investment in Australian companies means fewer jobs and lower wages for Australians.”

The Australian Energy Council, which represents 21 major industry players, said a clear national energy policy was needed, not intervention.

Former Liberal minister Ian Macfarlane, who now heads the Queensland Resources Council, warned government intervention could increase sovereign risk.

“There’s no doubt international customers are looking at this with some alarm,” he told ABC radio today.

“Multinational companies who have a choice on where they can invest right around the world are saying, ‘Well there’s no point in coming to Australia if we produce gas and one minute we have an export contract and the next minute the Government takes that opportunity away from us’.”

But Frydenberg said there had been warning signs for some time.

“We’ve got to put Australian customers and Australian businesses first,” he told ABC radio.

Frydenberg insists the gas market moves will push power prices down, but avoided directly saying how long it would be before power bills fell.

Labor and the Greens say the plan has merit but want to see the detail of the legislation and regulations.

-AAP

 

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