Nervous government backbenchers are being told they face a “sliding doors moment” in a looming vote on the National Energy Guarantee, as the Turnbull government faces duelling demands from Labor states and conservative Liberals on its climate and energy policy.
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Treasurer Scott Morrison declared the guarantee was the “only plan on the table” to reduce electricity prices, warning critics that dumping the plan would fuel uncertainty and drive up household bills.
His comments came as another Labor leader toughened the objections to the plan ahead of a crucial vote on the scheme next Friday, when ACT Chief Minister Andrew Barr demanded greater ambition on tackling climate change.
The attack on the guarantee for doing too little to cut emissions came one day after former prime minister Tony Abbott rubbished the NEG for doing too much, saying “pigs might fly” when asked about claims the scheme would reduce prices.
Energy Minister Josh Frydenberg has the support of Liberal states but also needs agreement from Labor states and territories next Friday, before he takes the plan to a meeting of the Coalition party room the following week where he must overcome Mr Abbott’s criticisms.
“This is a sliding doors moment to lower electricity prices,” Mr Morrison said on Thursday when asked for his message to Mr Abbott and other backbenchers.
“If we lose this opportunity because of obstructionism, because of negativity, because of whatever else the Labor Party has in mind, to lose this opportunity for lower electricity prices, that would be very disappointing and it will flow through to impact on the economy and people’s household bills.”
Experts including Grattan Institute energy director Tony Wood have backed the NEG as a mechanism to improve reliability and reduce emissions, with some arguing it can achieve the Coalition pledge to cut carbon output by 26 per cent as well as the Labor pledge to cut emissions by 45 per cent by 2030.
Mr Barr told the territory’s Assembly on Thursday that his conditions for the NEG included a provision to ensure the emissions reduction target could be raised beyond 26 per cent.
He said measures were needed to ensure the target could not be wound back, to protect against a "yo-yo-ing target" as federal governments changed and ensure the 26 per cent figure was the "absolute floor" for the scheme.
Mr Barr also said a mechanism had to be included so that progress against the emissions reduction target could be reviewed - potentially as often as annually - rather than only reassessing the policy five years after it was implemented.
Mr Barr also told the Assembly that such state and territory targets be treated in the deal as additional to the national targets, to ensure jurisdictions that were doing more to address climate change were not effectively subsidising inaction in other jurisdictions.
The territory, like every other jurisdiction in the national energy market, has a veto power over the NEG decision next Friday but Mr Barr will only finalise the policy after a cabinet meeting on Monday that will include Climate Change Minister Shane Rattenbury, a member of the Greens.
Mr Rattenbury told the Assembly the NEG was a "Frankenstein" proposal cobbled together from bits and pieces of a raft of previous failed, or repealed, federal climate change policies.
Mr Frydenberg said the Commonwealth had been clear that it had sole responsibility for setting Australia’s emissions reduction target under agreements at the United Nations.
"There is nothing in the National Energy Guarantee precluding the states from having their own schemes" he said. "These are complementary to the National Energy Guarantee not additional."
Mr Frydenberg stood by plans for a review in 2024, not earlier.
"After all, the ACT does need to remember that the National Energy Guarantee is an opportunity for a historic national reform and that their jurisdiction only represents 0.03 per cent of national electricity market generation and that they rely on other states to supply the vast bulk of their power.”
