Electricity Prices

Mr VAN HOLST PELLEKAAN (Stuart) (14:16): My question is to the Minister for Energy. Why did the minister tell this house on Tuesday this week that 'any politician who promises they can lower energy prices when they don't own all the assets is simply not being fair' when the minister did do exactly that in this house once on 20 June and twice on 21 June?

The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy) (14:16): One of the reasons electricity prices across this country are going up dramatically, as they have in Queensland, New South Wales, Victoria and South Australia, is because there is a scarcity of supply. People are deliberately withdrawing electrons out of the National Electricity Market in an attempt to add value to the scarce electrons that are left, trying to make more money.

One of the reasons they are doing that is because we are in the middle of a transition between traditional very highly polluting types of energy and a renewable future. That transition needs a transitional fuel; we believe that is gas. We are big supporters of it being gas. Members opposite don't like gas, despite South Australia being gas rich. They propose to actually ban, in some parts of our state, unconventional gas. They actually propose to ban unconventional gas.

Mr Bell: Conventional gas extraction is happening in the Coonawarra now.

The Hon. A. KOUTSANTONIS: So they are saying it's false. I have just heard the member for Mount Gambier say that they are not attempting to ban unconventional gas in the South-East.

Members interjecting:

The Hon. A. KOUTSANTONIS: I never said anything about conventional.

Members interjecting:

The Hon. A. KOUTSANTONIS: No, I said 'unconventional gas'. They actually attempted to ban parts of this state for unconventional gas, a practice we have conducted in South Australia since the 1960s.

The SPEAKER: I did hear the member for Mount Gambier very clearly and he was talking about conventional extraction of gas in the Coonawarra. I do listen to interjections.

The Hon. A. KOUTSANTONIS: I am very glad you are paying attention, sir. Perhaps you haven't got the kerchief blocking your view anymore. The important thing about the National Electricity Market is that it is being pushed to the edge of its limits. We are seeing, I think, some very, very dangerous days ahead. I spoke to Dr Finkel yesterday about the upcoming COAG where he has a list of recommendations he hopes to be unanimously adopted by the COAG. He rang me again, advocating on our behalf, because he thinks his reforms, like our reforms, can put downward pressure on prices.

Mr VAN HOLST PELLEKAAN: Point of order, sir: standing order 98. I ask you to bring the minister back to the substance of the question, which is: why has he made conflicting remarks in this house?

The SPEAKER: Well, presumably the Treasurer is explaining to us that he didn't make conflicting remarks.

Mr van Holst Pellekaan: But it's on the record.

The SPEAKER: Well, it may be, but it's his answer.

The Hon. A. KOUTSANTONIS: My remarks are completely consistent. There is a series of events that we need to have in the National Electricity Market to lower prices, and Dr Finkel was advocating quite passionately to me on the phone his hope and aspiration that all 50 recommendations of the Finkel inquiry are adopted. Unfortunately, one is being blocked by the federal government's caucus, which is the clean energy target. The clean energy target in effect is a mechanism. It is a mechanism that incentivises traditional forms of energy to be available in the market and to have a price signal.

Why is this important? It is important because the commonwealth government has a price signal in the market, and that price signal is for renewable energy. What Dr Finkel is saying is you need to have another mechanism in place to incentivise other forms of generation. You set your clean energy target on the basis of the Paris Agreement targets that the Prime Minister himself has signed. You apply an incentive to have generation in the market that can offer you synchronous energy, base load energy and meet those emission targets. Unfortunately, that mechanism is being opposed, and until you have a whole series of events occur, no one politician can lower prices.