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Legislative Council - Fifty-First Parliament, Second Session (51-2)
2008-06-18 Daily Xml
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NATIONAL GAS (SOUTH AUSTRALIA) BILL

Second Reading

Adjourned debate on second reading.

(Continued from 17 June 2008. Page 3286.)

The Hon. R.I. LUCAS (23:36): I rise to support the second reading of this important piece of legislation. Given the lateness of the hour and the fact that this measure is essentially based upon the same principles as those in the substantive debate on the national electricity legislation at the end of last year and, prior to that, on a significant tranche of legislation in relation to the national electricity market, I do not intend to make a long contribution at the second reading stage.

As the government noted in its second reading explanation, the national energy market has been a long time in the making. I note comments made by the minister in another place when he sought to divert responsibility for the national gas market to the former government. I am not entirely sure whether, in his contribution, he was talking about the former state or federal government.

I remind the minister in another place that a recent statement made by former prime minister Keating in The Australian newspaper in the past month boldly proclaimed that one of the great achievements of the Keating federal Labor government was the establishment of a national electricity market, which of course was the precursor to the national gas market.

I think that all in the national market at the moment accept that the original impetus for this came in the early nineties with decisions taken by the former federal Labor government. At that time, the former state Labor government (under, I think, Lynn Arnold) signed some of the original agreements with the federal Labor government.

Obviously, those in-principle agreements have moved a long way over the subsequent 15 years to 2008. During that period, they have been supported by state and federal Liberal governments. It suits the state Minister for Energy in another place on occasions to try to push aside responsibility for the establishment of this regulatory framework, the national electricity market and the national gas market, when he is involved in debate in the parliament.

Of course, when he talks to industry groups and associations, he is quick to accept the kudos from industry and business leaders when they congratulate the government and the current ministers on the move towards the national market.

As I said, it is a cute game that the minister plays. If there are any political thorns in relation to the national market, he immediately says, 'Well, look, I'm not entirely sold on all of this; it was done by the former government and we are just following it through.' When he talks to industry and business leaders in relation to the national market he readily accepts responsibility for the move towards the national market, which business and industry leaders have certainly been supporting and urging for some time.

The regulatory regime which is outlined in this bill, and in the second reading explanation in particular, is significantly similar to the regulatory regime debated at great length for the national electricity market. In regard to bodies such as the Australian Energy Market Commission and the Australian Energy Regulator, when we debated the national electricity market we said at that stage that they were involved in the regulation of the national electricity market and would at some stage become responsible for the national gas market. Well, indeed, through this legislation and subsequent rules and regulations, that will indeed be the case.

In debating the national gas market, Mr Acting President, I noted with interest your contribution in the second reading debate, and I look forward to the minister's response. I think it is important that we get a detailed response from the minister to the pricing differentials in the gas market between South Australia and the eastern states, which you identified quite rightly. I will not put it beyond him, but it would be very hard for this minister to blame the former Liberal government for those pricing differences, but I am sure that, given his form, he will endeavour to do so in some way.

As I said, a lot of the work in the gas market, which followed the electricity market, has been done from 2000 to through to 2008. The various reports that you, Mr Acting President, and other members referred to—the Parer report and others—were all published post-2002. All the Ministerial Council on Energy decisions were taken post-2002. All of the significant national reports done in recent times were based on ministerial council decisions post-2002. Minister Conlon has had his fingerprints, thumbprints and footprints all over the responsibilities for the various decisions that have been taken.

I will await a response with interest. I hope that we can get a response from the minister's office early tomorrow and that we can adjourn on motion the final debate on the national electricity market to some time later in the day to give some of us an opportunity to look at the minister's response and, indeed, consult with one or two people with whom we might like to in relation to the important issues that you raise as to the reasons we see those big pricing differentials.

One of the points that I want to put on the record is in relation to the national gas market. I think that it was your contribution, Mr Acting President, that made reference to some of the significant infrastructure decisions that have been taken in other states. Again, I think that was an important point: states have made decisions in relation to infrastructure to regional areas. I have seen the minister's response in, I think, the House of Assembly to similar points that were raised by the shadow minister, the member for MacKillop.

The reality is that, in the national electricity market, for example, where distribution and transmission businesses have decided that it was not economically viable to undertake various electricity infrastructure works, on occasions the government at the lower level has used regional infrastructure funds to provide electricity infrastructure in regional areas. Far be it for me to provide advice to you, Mr Acting President. I think it would be instructive in your discussions, both on this bill and perhaps on other occasions, to get from the minister where the government has expended public funds in regional areas through the Regional Development Infrastructure Fund or other funds available for electricity infrastructure in regional areas.

I know that the government likes to say that it does not pick winners in relation to providing funding to the industries or particular companies. It was only that terrible former Liberal government that used to do that, according to this government. But there are certainly a number of examples where the government has indeed made decisions in relation to corporate infrastructure welfare, in regional areas in particular, by way of electricity infrastructure. Now that we have a national energy market, exactly the same principles could be applied by the government, if it so chose, in relation to regional infrastructure.

The former government, in my view, made a number of significant decisions and undertook a number of significant actions during its term in government. One of the least heralded decisions that it took, but one which at the time I felt was one of the most momentous decisions, was the decision to initiate the process for the second gas pipeline into South Australia.

During my period in government, first as the minister for education but latterly as treasurer, we were engaged in a series of discussions and debates with gas producers. We were a captive of one gas pipeline coming to Adelaide from Moomba, and a whole range of decisions instituted from, in essence, that monopoly in terms of the provision of gas to Adelaide.

In the latter years of the former Liberal government, a significant amount of work was done and, as treasurer, I was actively engaged in some of that work with obviously the premier and the former minister for mines, and probably one or two other ministers as well—mineral resources I guess it would have been. The cabinet took a decision to initiate the process for the SEAGas pipeline from Victoria through the South-East to South Australia. I remember at the time saying to the then premier and other colleagues that, in my view, this was one of the most significant decisions the government would take, because the state should no longer rely on a single pipeline to Adelaide. We were a captive of the producers and a captive of the problems, if there were problems with that particular pipeline.

Previous governments for many decades had not tackled that particular issue. The former government did tackle the issue and initiated a particular process. At the time, there were two competing ventures for the SEAGas pipeline. It was always evident that there would have to be one in the end. I note with some amusement that the current minister soon afterwards—when the decisions were finally resolved, I think in 2004—claimed that it was the new government's sole responsibility that had delivered the SEAGas pipeline to South Australia. The reality is that the key decisions were all taken by the former government, and the new government saw the good sense in that. It obviously did not reverse that process. It saw the good sense in the decisions that had been taken and followed those decisions through. Inevitably, there was never going to be two competing pipelines built from Victoria to South Australia. Inevitably there were the sensible negotiations which led to one pipeline and a bigger pipeline in terms of the commercial reality.

In that single decision, the energy future for South Australia was significantly improved in that we were connected to the national market, we had competing gas producers, or competing gas sources for the Adelaide market. If there was a problem with the Moomba line, we had the SEAGas line and vice versa. If there was a problem with the SEAGas line, we had the Moomba line. That decision, in and of itself, as I said, was a very significant one and one which, as I said to the former government, has not received the accolades that it should have in terms of the importance of that particular decision.

The only area that I want to place on notice in terms of a question to the minister is now that we have reached this particular stage—and, as I said, I am interested in the answers to the questions on pricing which we might pursue in the committee stage—as the lead legislator I am looking to the minister for an update in relation to the impact now on the staffing and resources of ESCOSA. The original intention of those who wanted to see a national market was that we had too many state and federal regulators; that we were going to get rid of the state regulators and have the Australian Energy Regulator.

The inevitable reality is that the state-based regulators, in my view, were always going to retain some ongoing function. That clearly appears to be the case, but nevertheless when we debated the national electricity law, we were advised that there would be a reduced need for staff within ESCOSA because the Australian Energy Regulator would have taken over a significant number of the functions for ESCOSA, both for electricity and for gas, and that staff within ESCOSA would be offered entitlements to move to the Australian Energy Regulator.

I seek from the minister an update in terms of the inter-relationship between ESCOSA and the Australian Energy Regulator; what level of staffing has now been removed from ESCOSA and moved into the Australian Energy Regulator; what staff have left ESCOSA and have not gone into the Australian Energy Regulator; and have the total budget and resources available to ESCOSA now been reduced, or are they to be reduced as a result of the reduced workload that ESCOSA will now confront, or face as a result of the transfer of significant responsibilities and functions to the Australian Energy Regulator?

I will not repeat all of the issues that were raised during the debates on the national electricity law. The same general principles could be made, or could have been made by the opposition in relation to that, but in my judgment, it serves no great purpose. I look forward with interest, as I said, to the issues in relation to pricing that have been raised, which we can explore in the committee stages of the debate.

Debate adjourned on motion of Hon. J.M. Gazzola.

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