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Legislative Council - Fifty-Second Parliament, First Session (52-1)
2011-02-08 Daily Xml
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NATIONAL ENERGY RETAIL LAW (SOUTH AUSTRALIA) BILL

Second Reading

Adjourned debate on second reading.

(Continued from 10 November 2010.)

The Hon. M. PARNELL (16:07): I rise on behalf of the Greens to speak to this bill. I will also include my remarks on the companion miscellaneous amendment legislation, the statutes amendment bill. I will make one contribution in relation to both. This bill implements the Australian energy market agreement, in which COAG states agreed to, amongst other things, implementing a national framework for energy access and a national framework for the distribution and retail services. They agreed to pass nationally consistent legislation and to take reasonable steps to repeal or amend inconsistent state legislation. The COAG states also agreed to phase out the exercise of electricity price regulation, provided that effective retail competition can be demonstrated.

At a time when prices are rising rapidly, and that causes increasing levels of financial difficulty for consumers, some of our most important welfare and consumer groups are concerned that these national laws may weaken protection for some consumers. The cost of essentials such as food, health and utilities are rising at a rate significantly above the CPI. When we combine that with recent negative changes in the labour market, we see a disproportional cost and income pressures on those who are on fixed and low incomes. In other words, they are being squeezed from all sides.

We have seen legislation such as this many times in South Australia and it is almost formulaic when members from other than the government side stand up, talk about the bills, their shortcomings and propose amendments and we are told that we cannot do that, that this is national legislation and that we will mess up the whole scheme if we try to make changes.

I do not propose to spend a long time talking about our role as legislators in an era of national cooperation, but I will make a few points in relation to these bills which show that they are not going to be uniform in the true sense of the word and that we need not be afraid of making changes that look after South Australian consumers. South Australia is the lead jurisdiction on these bills, as it is on other reforms to the energy laws. The next cab off the rank will be Victoria once South Australia has passed these bills.

My understanding is that just before Christmas, on 10 December last year, the relevant state and territory ministers agreed that they would work towards a commencement date of 1 July 2012. Whilst not precluding an earlier adoption, that date appears the most likely time frame, which means that we do have time to get this right, not just in South Australia but around the country.

Due to the scale and complexity of these laws the national framework was split into two packages: the economic regulation of distribution services and retail market regulation. The economic package was completed with amendments to the National Electricity Law and Rules on 1 January 2008, and the new National Gas Law and Rules came in on 1 July 2008.

The final part of this national framework is known as the National Energy Customer Framework, and that is the suite of measures that regulate the relationship between retailers and consumers. It will be implemented through a package of laws, rules and regulations.

The rationale for uniform regulation is to cut red tape and to cut the costs for retailers who are operating across state borders. The idea is that by encouraging retailers to move beyond individual state borders and operate nationally it will increase retail competition and decrease prices. Whether that turns out to be the case is very much up for debate.

I will say that it is a myth that these laws must be exactly the same in every state. In fact, we know already that they will not be the same in every state for a number of reasons, including the desire of states not to water down their existing consumer protection measures. In the same way that South Australia would not water down its container deposit legislation because we are proud of it even though other states have not seen the light, similarly, other states feel strongly about their consumer protection regime in the energy field, and they are not going to water those down.

For example, Victoria currently has one of the strongest electricity consumer protection regimes in Australia. It is also the only state with a fully deregulated market. In the existing scheme there is clearly capacity for jurisdictions to maintain existing arrangements. For example, under the Brumby government then energy minister Peter Batchelor committed to preserving Victoria's Wrongful Disconnection Payment scheme, which is a scheme I will talk about in a bit more detail later. That is a scheme that provides for $250-a-day payments for up to 10 days for customers whose power is wrongly or unlawfully disconnected.

The Labor government wanted to hang on to its financial hardship policies and to continue a ban on late payment fees charged by energy retailers, because these were not included in the national framework. That was the previous Labor government in Victoria. The current Liberal government appears to be singing from the same song sheet. If members had the opportunity to look at the Herald Sun from a couple of weeks ago they would have seen an article on 31 January stating:

The Baillieu Government is on a collision course with Canberra over plans for new energy retail laws. Victoria is refusing to back down over federal regulations to give energy companies greater strength in the market. Energy Minister Michael O'Brien said consumers must be put first. The National Energy Retail Law threatens to abolish Victorian consumers' right to claim $250 a day for 10 days if they are wrongly disconnected. It also allows energy companies to hit households with late payment fees. But the state government is refusing to sign a deal unless consumers come first.

The quote from Mr O'Brien is, 'It is vital to protect Victorian households,' and he also said, 'We will only sign up if it doesn't compromise Victorian consumers'. The article continues:

He said Victorian regulations already have strong consumer protection and are 'streets ahead' of other states.

So, we know that states are moving to incorporate their own special provisions, and by definition that means these laws will not be uniform. That means that we have the ability in this state to make the changes that we think are necessary. I will come back to the particular issues raised in Victoria because they are issues that I think we need to address here in South Australia.

Examples of states that we know will depart from this national energy customer framework include Victoria, as I have just mentioned. One of the other things they will have to do is regulate smart meters because there is nothing about smart meters in the national energy customer framework, the law, the rules or the regulations. Victoria will be relying on its Essential Services Commission to make sure that its existing regulations can be reviewed and continued because that is a path that state has gone down and it does not yet know whether other states will follow suit.

Elsewhere, the rules themselves set out where states can depart. For example, there are a number of elements listed which jurisdictions can opt into at their discretion. Some issues require a nomination to be made on the part of a jurisdiction or minister. These issues include parties authorised to sell electricity, parties authorised to supply electricity and prepayment meter systems, which we have in South Australia but they do not have elsewhere. The small compensation claims regime is a matter that has occupied a fair bit of our time over the years. We hear about people's freezers full of melting prawns as the power is cut off, and there is a range of other things as well.

We know, for example, that in South Australia we will derogate from the national laws in relation to retaining our existing electricity consumption threshold of 160 megawatt hours per year and that we will not be adopting the upper consumption threshold in the national scheme. Queensland is also going to try to retain some protection for its small business customers, and again that will be a derogation from the national scheme. New South Wales will do the same thing.

They are also proposing in New South Wales to continue their current arrangements which allow distributors to contractually limit the liability to customers for failure to supply due to negligence. So, that is similar to our system here with the compensation payable for power disconnection that affects households, particularly in relation to food spoilage.

What members should take from this is that, while the jurisdictions are moving closer together, it will still not be an entirely uniform scheme; in fact, it could be many, many years, if ever, before such a thing occurs. That is why we need not be afraid of putting in place in our legislation, for other states to consider, consumer protection measures that have been left out of the current arrangements.

At this stage, I will quickly put on the record my thanks to the assistance provided to me by various members of the National Consumers Roundtable on Energy, in particular, our own South Australian peak welfare body and member of that round table, SACOSS. I note that SACOSS and many other consumer, environmental and welfare groups have engaged in the debate on this national legislation for many years.

The consultation process included two exposure drafts for the actual legislation and also the related legal and policy instruments. It is fair to say that some good changes have been made as part of that process, but there are a small number of outstanding issues that the Greens believe should be addressed in this legislation because we want to ensure that the legislation both retains and strengthens existing protections, especially for disadvantaged and low income consumers of energy.

There are three issues that I will address when we get to the committee stage: first, to legislate for a ban on late payment fees; secondly, to enshrine the prohibition against disconnection of electricity during heatwaves and other extreme weather events; and, thirdly, to introduce a regime of compensation for wrongful disconnection.

I flagged all these issues with government officers at the briefing that they provided to me last week, and I offer my thanks to the government officers involved and also especially to Mr Vince Duffy, the executive director of the Energy Division of the Department for Transport, Energy and Infrastructure for promptly getting back to me with the government's response to the proposed amendments that I flagged.

I analysed the government's response. I consulted further with SACOSS, and it is probably fair to say that they were not convinced and I am not convinced that the government's reason for objecting to these amendments stands up to scrutiny; therefore, I will be moving amendments on these three issues. Let me just touch on them briefly.

First of all, in relation to the ban on late payment fees, the bill effectively allows retailers to charge uncapped fees for the late payment of electricity and gas bills and that is just not fair. This was raised, as I have said, by consumer and welfare groups around Australia. It was also raised by the Energy and Water Ombudsman from Victoria, where late payment fees are already banned under their standard retail contracts. Late payment fees are allowed in New South Wales and in South Australia, and my understanding is that, in South Australia, AGL routinely charges $14 for late payment on electricity bills. My amendment bans the charging of additional fees for the late payment of accounts.

The ultimate sanction, of course, for people who do not pay their bills—especially their energy bills—is that they are disconnected, and that ultimate sanction, together with the reconnection fees, which I am not proposing to amend, should provide sufficient penalty without charging extra fees for the late payment of accounts. I am not convinced by the government response that proposed rule 73 of the National Energy Retail Rules specifically requires retailers to waive such fees with customers who are identified as hardship customers.

Such an identification, whilst it can be a self-identification, is not guaranteed and it is especially not guaranteed the first time a customer fails to pay his or her bill on time. I am aware that the government believes that there is a risk that a complete prohibition on charging late payment fees may act as a disincentive to the on-time payment of bills for non-hardship customers.

The Hon. R.I. Lucas: Too right! It's interest free.

The Hon. M. PARNELL: The Hon. Rob Lucas is outing himself as a person who does not pay his bills on time. I believe he pays his gambling debts, but perhaps not his other bills on time. I think in any society the vast majority of people will pay their bills on time, but of course there will be some who leave it until the last minute even though they may have the capacity to pay on time.

I think playing Russian roulette with disconnection is fraught with danger, and no doubt some people will end up being disconnected and they will end up paying the extra costs associated with reconnection. On balance, I think the energy retailers will be able to carry that small proportion of people who can pay on time but do not. The alternative is to potentially increase the rate of disconnections where people are suffering economic hardship.

I point out that it is no different from the approach that we take in law to other essential services such as housing. If you do not pay your rent, then you can be evicted. There is a Residential Tenancies Tribunal approach, but your landlord does not charge you an extra penalty on top of the rent that you have not paid because, for people in genuine hardship, that just compounds their difficulty and makes it even less likely that they will catch up and get on top of their bills. I do not think that banning late payment fees will have a significant impact on our retailers.

The second issue that needs to be addressed in this bill, and is not addressed to my satisfaction, is the issue of disconnection of electricity during heatwaves. Members may be aware that it is current practice in South Australia not to disconnect electricity consumers during heatwaves, and I understand also that this provision is to be incorporated into the rules—in rule 116, to be precise. However, I think it belongs in the act. It is a provision that in South Australia will focus on heatwaves; in other places it could be extreme cold weather, for example, in Tasmania.

I note that SACOSS believes that, if provisions in South Australia for no disconnections during heatwaves are inserted into this bill rather than the rules, it would ensure maximum protection and certainty for vulnerable customers. The predicted increased prevalence of extreme weather events in South Australia and nationally warrants the enshrining of protections in the model legislation. Just as we were discussing earlier in relation to the public health bill, climate change will have implications across many portfolios, not the least of which is the energy portfolio. The government's response is that it does not need to be in the act. I disagree.

The final issue on which I think this bill needs to be amended is in relation to the wrongful disconnection arrangements. In Victoria, as I said, it is a condition of electricity licences that the retailer must pay the customer $250 per day for up to 10 days for wrongful disconnection, without the customer having to establish particular loss. Wrongful disconnection payments are also provided under the Victorian Gas Industry Act. The Victorian Essential Services Commissioner's January 2010 Inquiry into Wrongful Disconnection stated that the principal intent of the payment was to place an additional incentive on retailers to guard against disconnecting relevant customers who are willing but do not have the immediate capacity to pay their energy bills.

In Victoria, the Energy Retail Code outlines the terms and conditions required in an electricity contract or any contract for the sale or supply of energy and states that it must include the steps that must be taken before disconnection. Those steps include: assessing the client's capacity to pay; offering the client payment assistance and providing the client with information about concessions that they might not be aware of; and providing other assistance, whether it is by telephone or in person, about energy efficiency and the availability of financial counselling. In other words, there are some steps that the energy companies need to take before they move to disconnection.

The bill that is before us and the national energy customer framework that it implements does not include any express provision for wrongful disconnection payments. The amendment that I will be moving will remedy that by introducing the Victorian regime into the national law. I will point out in passing that under the bill there is currently no prohibition against charging a reconnection fee when someone has been unlawfully disconnected, so there is a double whammy there. The government response is that it was carefully considered but it just does not like it, and it believes that it does not belong in this national framework. I beg to differ. Victorian Liberals and Victorian Labor beg to differ as well, and no doubt people in other states as well.

While it was decided that this regime was not suitable for the national framework, the alternative is that states be left to their own devices and retain their own local regimes through their own legal instruments such as the Victorians may do. I note that the South Australian ombudsman scheme, which is capable of hearing wrongful disconnection matters is to continue, but I think that we need the added discipline of incorporating this into legislation. I make the point that, if your power is cut off accidentally through negligence, you can recover the cost of the lost food in your refrigerator but if they deliberately cut you off and they do it unlawfully you do not get anything. How on earth does that make sense?

With those remarks I remind members that when these amendments come up, do not be fooled into thinking that you are not allowed to consider them because it is national legislation. They are sensible amendments. They are being considered in other jurisdictions as well, and I would urge honourable members to give these amendments their support. I look forward to the committee stage of the debate.

The Hon. D.G.E. HOOD (16:29): I rise to indicate Family First's view regarding this bill; indeed, both bills that we will be examining over the next week or so. It is important for me to put on the record our concern for families facing recent and projected electricity price hikes. We have seen substantial rises in the price of electricity over quite a considerable period, which I will go into some detail on in a moment. I think it is fair to say that low to middle income people are really feeling the bite on that particular issue, as well as with water prices.

In June 2006, COAG amended the Australian Energy Market Agreement to provide for a national framework for energy access, part of which is the so-called 'customer framework', and the national framework for distribution and retail services as well. This bill is a crucial element of the customer framework and a final piece of the national scheme in total, and South Australia, as the Hon. Mark Parnell has just said, is the lead legislator. The customer framework provides a number of benefits for South Australian consumers, and those benefits have Family First's support; indeed, I am sure the support of all members in this place.

For example, the framework complements other general consumer protection laws, such as the Australian Consumer Law and privacy legislation. Consumers will also be able to access an energy ombudsman scheme, which we support, which will be able to resolve many complaints in a relatively straightforward manner. The government promises that there will be a 'particular benefit' to vulnerable consumers who are under financial hardship. A retailer of last resort provision is also included and works to protect consumers in the worst scenarios. There will be a greater consistency of consumer rights across all participating jurisdictions, and they are: South Australia, Victoria, New South Wales, the ACT, Tasmania, Queensland and the commonwealth.

It is interesting to note—as I guess the Hon. Mr Parnell was alluding to, if he did not say so specifically—that the Northern Territory and Western Australia will not be part of this scheme, or certainly not at this stage. As I have mentioned, Victoria will be part of the scheme, but we cannot deem that to be certain at this stage because I note that some days ago the Victorian energy minister, coincidentally also named Michael O'Brien, said that Victoria may not sign up to this scheme after all—this is just in the last few days. The threat, from his perspective, is that for Victoria the protections envisaged by this bill may actually be a retrograde step for that state.

This scheme apparently threatens to abolish Victorian consumers' right to claim $250 a day for 10 days if they are wrongly disconnected, as the Hon. Mr Parnell has just outlined, and allows energy companies to hit households with late payment fees. Those concerns were noted in the Herald Sun on 30 January of this year. I ask a question on notice of the government, whether those concerns may also be valid concerns for South Australian consumers, although I understand that energy retailers can already hit our users with late payment fees.

I also ask what the implications are for the scheme if Victoria does not participate, given that Western Australia and possibly, as I indicated, at least one of the territories may not as well. Certainly, as Victoria is one of the lowest cost producers of electricity on the national grid at the moment due to their predominant coal-fired power plant capacity, Victoria's participation (or lack thereof) will be very important, I think, in the effectiveness of this national legislation. It may well be, therefore, that we may have to come back and deal with a reworked bill in some form in the coming months to ensure Victoria's participation, or indeed perhaps the other jurisdictions.

This bill primarily seeks to achieve a national regulatory regime for retailers and distributors selling and supplying energy to consumers. The customer framework will be regulated and enforced nationally by the Australian Energy Regulator, with one set of laws operating throughout the participating states. This will, of course, as the government states, streamline regulatory requirements and increase efficiency through regulatory harmonisation. It is expected, as a result, to increase retail competition by reducing barriers to entry into the South Australian and other markets.

Family First, as I would hope members would agree, is a party dedicated to less red tape and less waste, and were are therefore attracted to those provisions. No doubt we will see more companies offering services here, with the increase in competition and lowering of comparative costs that will result from it. The national energy retail objective is:

...to promote efficient investment in, and efficient operation and use of, energy services for the long term interests of consumers of energy with respect to price, quality, safety, reliability and security of supply of energy.

I am quoting directly from their own documents. Family First is supportive of those objectives, as, I would imagine, are other members of this place.

South Australia will not immediately transition to the national scheme upon the passage of this bill. We are told that consequential amendments to the current South Australian energy legislative instruments resulting from the application of this bill will be prepared and presented to parliament at a later time, and that price regulation in South Australia will be maintained post implementation of this national framework for the near future anyway.

A further question I put on notice for the government is the obvious one, and that is, what precise time frame is intended for South Australia to maintain its current price regulation, as the second reading explanation given by the minister previously does not make that clear?

The cost element is of keen important to South Australian families, and I highlighted our party's concern regarding energy pricing at the beginning of my contribution, and I make that point. I think electricity prices are becoming a major concern for people on low and middle incomes and, indeed, across the business sector as well. My concern is this: in 2002, following the state election campaign—in fact, I think it was the very next day—the former treasurer, the Hon. Kevin Foley, said, 'If you want cheap electricity prices, then vote for a Mike Rann Labor government.' Well, unfortunately, we have not seen cheaper electricity prices during that period; in fact, they have escalated quite substantially.

Throughout most of the 1990s, South Australia had the cheapest electricity prices in Australia, save and except for prices in Brisbane, which were far below the national average during that period. In 2002, we had a tremendous spike in power prices, which caused us to become the single most expensive state in which to buy power by some significant margin. From 2002 until now, we generally have had the most expensive power nationwide, and that is something we should not be proud of at all.

In recent times, there has been some slightly good news, although it depends on how you look at it, I guess, in that power prices in South Australia have been overtaken by Sydney and Hobart. It is arguable, though, that our prices have risen at a certain rate; their rate has just risen even faster in recent times. In any case, we remain at the top of the list for the most expensive power in the nation, and that will only be compounded by the announcement of a further 12 per cent increase in standard contract prices for electricity, which is now coming into effect.

Industry estimates are that electricity and gas prices will double over the next five to seven years, adding at least $2,000 to the average household annual bill, and that is of great concern to us, as I am sure it is to all members in this place. We will see people who have limited incomes decide not to turn on their air-conditioner, heater or electric blanket, whatever it may be, because of the associated costs. I think that it is absolutely tragic that, in a First World democracy, we have to subject people to making those sorts of decisions.

Electricity prices in South Australia are already very high compared with prices paid overseas. To be fair, that is not just true in South Australia; obviously, it is true across the nation. We are already paying almost double the price paid by the average US city for our electricity, and that is not a good thing at all for South Australian families or, indeed, for anyone else, such as small businesses or, really, almost any power user. On top of the energy price rises, water prices have shot up by some 32 per cent, and that is on top of water prices already trebling since 2002.

These price rises in vital utilities are a real contributor to household financial stress. When it comes to energy prices, there are several indicators that paint a very concerning picture. I might add that energy prices have increased very substantially, as I have outlined, but so has water. Household mortgages are higher than ever and so is the apparent stress associated with that. These are very, very significant issues for working people.

The number of residential customers on payment instalment plans for gas, for instance, has increased from 3,801 customers in 2005-06 to 10,407 in 2009-10. This is a tremendous increase in the number of people simply unable to pay their bills. The number of residential disconnections for nonpayment by customers previously on instalment plans for electricity has increased from some 271 to 1,927 over the period I have just quoted. In that same period again, the number of concession recipients (which would include aged pensioners) who have had their electricity cut off for nonpayment has increased from 350 to 568. These are very real problems affecting real, everyday people.

So Family First calls on the government to do everything it possibly can to keep energy prices under control, because those statistics are worrying. I am sure they are worrying to the government as well as to all other members of this place.

South Australia faces some tremendous challenges in regard to our future energy supply. Coal-fired power plants are by far the cheapest to run with respect to electricity production and are one of the reasons why Victoria has been able to offer cheap power on the interconnector for many years now. Gas is almost double the price, which is what we mostly have and are now importing from Queensland coal seams and from Victoria through the SEA Gas line. Our own production of gas at Moomba is limited and will not go on forever. In fact, I have heard reports that it is severely limited, and it is a pity that we are now so reliant on interstate resources.

We seem to be determined to go down the path of phasing out coal and gambling on carbon capture and storage technology as a primary means of meeting our international targets. I point out that the International Energy Agency has now said that if this high risk gamble does not pay off (as carbon capture technology is both unproven and expensive), it will be, in its own words, 'very difficult' for Australia to meet its 2050 emissions target. Nobuo Tanaka, the IEA Executive Director, said in Canberra very recently:

If CCS is not readily available and if you don't use nuclear, totally renewable energy is very, very expensive, and also it is fragile in terms of its productivity...So it's very costly if CCS doesn't work out.

Mr Tanaka, by the way, said it was up to Australia whether it should go nuclear, but that, and again I quote directly from him, 'nuclear power should be on the table for the global community'. I agree we should leave that door open. Why are we ruling out a genuinely productive way of producing emission-free electricity? We are happy to export uranium but we are not happy to use it here in this state. I see a dramatic contradiction there, and I think it is an opportunity that we should at least be exploring.

A recent report prepared by Australian researchers for the journal Energy has also backed the nuclear option, identifying nuclear power as the cheapest technology to use if we are determined to meet our so-called greenhouse gas emissions target. Let us look at it this way. At some stage we will not be able to fuel our own power plant with South Australian gas. Moomba cannot compete with cheap interstate coal seam gas. We will be reliant on Victorian natural gas through the SEA Gas line, and Epic Energy, which owns the Moomba-Adelaide pipeline, is linking with Queensland's coal seam fields. So, again, we are setting up South Australia to be beholden to other states in matters of energy. We have already seen the very difficult situation that our state has faced historically with River Murray water.

I think it is fair to say that the Premier can be rightly congratulated on the large number of solar and wind power generators he has built during his term.

An honourable member interjecting:

The Hon. D.G.E. HOOD: Well, he has authorised the building of them. If South Australia was a country by itself, we would be second only to Denmark in the amount of energy produced by solar and wind. But these can never provide base load power. They are useful to some degree but they cannot provide base load power. Solar is fine until we have no sun or we have a cold stretch or cloudy periods, or whatever it may be; and wind is fine, of course, while the wind is blowing (although some concerns regarding wind generation can be addressed by dispersal of the turbines, and there have been some improvements in that technology).

Nevertheless, other than coal, South Australia has only two serious options for future base load power at the moment—geothermal power from digging up hot rocks under the ground, and nuclear power. In both geothermal and nuclear capacity, South Australia is perhaps the single luckiest place on earth. South Australia has been called 'Australia's hot rock heaven', being littered with promising areas that could see South Australia become the geothermal power hub for the whole of the country.

South Australia has a large heat anomaly that extends from the Cooper Basin down through the centre of the state. Two deep wells are sunk into the anomaly, with the water being pumped into one, causing vast amounts of steam to be ejected from the other (the second well, if you like), which turns a turbine to create the power. So far, 23 companies have applied for more than 236 geothermal exploration licences covering about 110,000 square kilometres in South Australia. It is clean and it is cheap, and South Australia has the best geothermal potential in Australia, indeed, one of the best in the world.

The only issue (the department told me in a briefing they gave Family First) is that we are looking at 20 years or more before consumers see energy from that source coming on tap. In my experience, when 20-year predictions are made it usually turns into a lot more than that. My view is that if we can verify the safety of nuclear power becoming available, we should not be closed-minded to tapping our vast reserves of nuclear fuel in this state.

We are certainly happy to export nuclear fuel, and it sends a poor message if we are unwilling to even consider using that fuel ourselves. New generations of completely safe reactors—even reactors that use nuclear waste as fuel—are already available and are worth an open-minded consideration. There was a recent discussion about this new generation of nuclear power plants, which will actually run on nuclear waste, coming online in China. I think this is very interesting technology indeed.

Just to be clear, I am not saying that we should go like a bull at a gate down the nuclear path or that that is the only option available to us; what I am saying is that we should have an open mind in considering it as a genuine option for the power needs in this state and, indeed, in this country. It is emission free and, from overseas experience, very safe and very cheap. The United States—which, of course, uses nuclear power—has electricity costs roughly half of those here in Australia.

Despite the obvious concerns surrounding some forms of nuclear power, it is ironic that some people argue against a completely safe and clean nuclear reactor for South Australia. The alternative is to pump millions of tonnes of carbon dioxide (which many people are very concerned about) into the atmosphere, and then ending up begging the other states for the fuel we need, as we are forced to beg them for the water we need when it comes to negotiations on the Murray.

To reiterate, my point is that we need to keep an open mind regarding all forms of power generation. South Australia will certainly be facing a crunch in power generation in 10 years or so, and will need to substantially upgrade the Northern and Playford coal-fired plants. All the options need to be on the table, including nuclear.

As for this particular bill, there are clearly some elements that will be of benefit to consumers. Certainly, Family First supports less waste and the reduction of red tape, which this bill seeks to achieve, as well as the implementation of a national customer framework. We think all those things are good; however, I still have not received much in the way of submissions from groups such as SACOSS. I notice from the Hon. Mr Parnell's contribution that he has had extensive dialogue with SACOSS, but it certainly has not been active in lobbying us at this stage. Perhaps it will, but we want to speak to it and other groups like it in order to get their feelings on the bill before we commit one way or another.

I believe this is a very interesting debate. As the Hon. Mr Parnell said, we can get into the habit of simply waving through national legislation because it is purported to be national legislation. Given that we are the lead legislator on this bill, I think that puts us in the particular situation to make changes if we feel it necessary. However, I also feel that the integrity, if you like, of this legislation is somewhat questionable in light of the fact that Western Australia has declared that it will not take part, that in recent days Victoria has said it may not take part, and that at least one of the territories has indicated that it will probably not participate either. How that is regarded as national legislation is, I guess, open for debate, but it is hard to see it as genuine national legislation.

I look forward to this debate very much, because I think these are crucial issues for South Australian families and businesses. Power is part of our life. We all need it; we use it every day. We have got to a situation where it has become very expensive for most people, very expensive for businesses. Small businesses are always complaining (and I think rightly so) about the significant rise in power prices. I think it is incumbent upon us in this chamber, and indeed those in the other place, to make sure we get this right. These are very important issues for everyday South Australians.

The Hon. K.L. VINCENT (16:48): I suppose it goes without saying that gas and electricity are necessities in today's society; definitely essential services. We rely on electricity not only to provide creature comforts, such as televisions and X-boxes, in our homes but also to provide heating, air conditioning and refrigeration. I suppose it is fair to say that for most of us air conditioning is a bit of both, a necessity and a luxury, however, for people who experience medically-based heat intolerance (which I will touch on a bit later in this speech) the line between that luxury and that necessity is much more blurred.

Just last week I attended the launch of MS Australia's 'Keeping Cool SA' campaign, which highlights the importance of air conditioners for people with heat intolerance issues. For those in this place who are unaware of it, I should let them know that the vast majority of people with MS—and, indeed, people with other conditions such as Parkinson's disease—experience medically-based heat intolerance, meaning that the symptoms of their disability or medical condition are greatly exacerbated by hot weather.

Due to this, during the hotter months of the year the average household in which a person with MS, in particular, lives must leave their air conditioning on roughly seven times longer than the average household without a person with MS. This results in expensive electricity bills, which can be difficult to manage, particularly for those whose source of income is the Disability Support Pension (DSP) alone, and the concessions that are available to pensioners prove insignificant in the face of large power bills. To that end I suppose it is self-evident that I will support the amendments proposed by the Hon. Mr Parnell.

It is important to note also that research undertaken by MS Australia indicates that even people with MS who are on very low incomes do leave their air conditioners on just as much as those with higher incomes, so that goes to show that this is not a choice but an essential service for these people. Of course, it is also important to note that there are people whose disabilities and medical conditions make them intolerant to the cold weather. However, these things are achieved one step at a time, so to speak. I am not saying that these people's issues are any less important but, given the current and recent hot weather we are experiencing, medical cooling is—pardon the pun—a hot topic.

The aim of the Keeping Cool SA campaign is obviously to achieve energy concessions for people who experience medically-based heat intolerance. It is certainly a shame that South Australia stands with Tasmania as the only states in Australia who do not yet offer energy concessions to people with heat-intolerant issues, which is unbelievable considering that MS Australia has estimated that it would only cost the government approximately $100,000 in the next financial year to offer such concessions.

I sent a letter the other day to the government asking it to consider the provision of such concessions. Of course, I have not yet received a response, but I am nonetheless hopeful that this government will see the light and offer concessions to people who suffer from heat intolerance. It is essential and it is inexpensive, so it is a win-win situation for both the government and the people of South Australia. This is above all an opportunity—an opportunity that regularly presents itself but is rarely taken up—for the government to demonstrate some good sense.

The Hon. D.W. RIDGWAY (Leader of the Opposition) (16:53): I rise on behalf of the opposition to offer some comments in relation to items Nos 3 and 4 on the Notice Paper, being the National Energy Retail Law bills, Nos 63 and 64. Some time ago I was shadow minister for energy, and at that time we debated a suite of bills to implement COAG's agreement to establish a single industry-funded national energy market operator, to be called the national energy market operator for both electricity and gas. The two bills were part of ongoing national energy market reforms, and these two bills are part of the ongoing national energy market reforms and are the customer framework of the new national energy market.

By way of a brief historical explanation—and better to highlight the Liberal Party's influence on getting this national energy market into effect—the National Electricity (South Australia) Bill was introduced in May 1996 by the Hon. John Olsen, and it made provisions for the operation of a national electricity market. However, the reform of the Australian electricity industry was underway earlier, with special premiers' conferences in the early 1990s. What came from this was the national grid management council and a paper in 1993, which made a number of recommendations. As members can see, things move slowly at this level, given that it is nearly 20 years since this first started.

COAG agreed to the recommendations in 1994, and about two years later ministers from New South Wales, Victoria, Queensland, South Australia and the ACT agreed to give effect to the recommendations. Those recommendations were for regulatory agreements for the national electricity grid, namely, to create a uniform national electricity law and an accompanying code. The law was to be enabled by the application of legislation in each jurisdiction. South Australia vigorously pursued and won the role of lead legislator. South Australia remains the lead legislator on the National Electricity Act and, as such, the bill that is before us today will be enacted through the other jurisdictions in the same manner.

At that time, the transmission networks of New South Wales, Victoria, South Australia and the ACT were interconnected. Since that time, Queensland and Tasmania have joined the network. Western Australia and the Northern Territory will probably never participate in the national market because of the significant distances, and I suspect, significant energy losses in trying to transmit electricity across such vast distances. I think there are some federal members of parliament who think that DC electricity can be transmitted across those vast distances and maybe we may see those states participate at some point in the future, but it is certainly not envisaged that they will at this stage.

In April 2007, COAG agreed to establish a single industry funded national energy market operator, to be called the Australian Energy Market Operator, for both electricity and gas. These bills are the bills that I dealt with in 2009 as the shadow minister for energy. As members would know, we were disappointed with how these significant bills have been dealt with in parliament and by the minister. He argues that several drafts of discussion papers preceded the legislation we see.

The opposition has witnessed several times the arrogance of this government and its consultation process. It has been the case many times that the concerns of industry stakeholders on draft pieces of legislation have not been reflected in the final document. It has therefore been the general (and I would argue the sensible) convention from the opposition that, to a large degree, our consultation is done once the government has committed to a final piece of legislation.

As my colleague Mr Mitch Williams, the member for MacKillop, has stated in another place, we take our role as legislators very seriously. We do not ever assume the satisfaction of industry, or the community, in the progression of draft legislation until we see the final form, especially with this government. Furthermore, as all members are aware, this legislation was initiated by COAG and the Ministerial Council on Energy.

Given the significant changes in state governments in the last 12 months—and, of course, we may also see changes in New South Wales in the very near future—I have seen it necessary to contact the interstate governments just to get their views on this particular legislation. I have also taken the liberty of contacting some other key players in the retail and distribution markets and I am awaiting detailed responses from them.

There are stakeholders who would like to see some protections for consumers improve beyond what these bills achieved. For example—and I think other members have already mentioned this—is it appropriate or necessary to undertake electricity disconnections during prolonged periods of extreme heat? The South Australian code prohibits disconnections for small customers for non-payment during those periods and I question whether these conditions should not be replicated in the new legislation.

At this point, I would like to point out a few interesting statistics. There are 25 per cent of South Australian customers who struggle to pay their power bills on time and this is quickly moving to about 30 per cent. A significant survey showed that the lowest income customers give priority to their electricity bills. Late payment fees are not a good prompt for these people as it only compounds their inability to pay. So, should late payment fees be banned? I am also informed of statistics that, for the average income earner, 25 per cent of their income is spent on essential services and 30 per cent on rent or mortgage. This is another reason why there are significant desires for increased consumer protection.

Another issue raised was that there should be a straightforward payment for wrongful disconnections. Currently the Ombudsman can fine the retailer for wrongful disconnection. Should it be legislated that a person receives compensation for wrongful disconnection? As far as I am aware, there is nothing in here for those residential customers. It is said that Victoria currently has the most competitive energy market in Australia, and arguably, the world. It is testament to the fact that providing customer protection and allowing people to enter the market with a guaranteed level of security only creates a successful market.

I have some general comments on this particular bill at this stage. The movement to a national market is obviously a positive thing. The ongoing separate regulation of individual state and territory markets only duplicates the process and, I am sure, increases the compliance costs. Separate operating licences discourage retailers from operating across state borders and, in turn, inhibits competition. As energy prices rise, and this essential service becomes more difficult to access, the opposition will obviously support, generally speaking, any moves to boost consumer protection and increase market competition.

Another significant facet of the bill is the national Retailer of Last Resort scheme. The substitution of a backup electricity or gas retailer, if a customer's current retailer fails, would appear to be a sensible move. Ensuring continued energy supply appears to be an added security for the market. We have not yet heard significant concerns on this.

I note that each jurisdiction's application of the act may modify the application of various provisions within the customer framework for that jurisdiction. In fact, parts of this customer framework rely on the state's own energy legislation for full effect. This national legislation is supposedly designed to work in parallel with state-based legislation.

It is interesting to note that one significant stakeholder has raised concerns about the implementation issues for energy retailers. Retailers' systems and processes need to be created and updated prior to the introduction of the National Electricity Customer Framework. Energy retailers estimate that they will need at least 12 months' notice of the start of this legislation in order to prepare.

For that reason, this stakeholder is concerned about the staggered start dates for the following reasons: first, the efficiency improvements from the national consistency will be delayed until the last jurisdiction implements the framework; secondly, business processes will have to change several times; thirdly, additional administration and compliance costs of start dates will lead to increased costs which, sadly, will eventually be passed on to consumers; and, fourthly, previous retailer comments were provided in the context of the entire package being completed at the same time.

In summary, what they want is a blanket start date no earlier than the start of the 2012-13 financial year. In light of that, I am interested to know the government's response to the concerns with regard to the implementation of this legislation along with some of the earlier issues that I have raised.

It also appears, from my observations and from responses that I have had from a couple of large energy retailers, that there is some significant consultation still to take place on these matters. I have been a little disappointed that I have not received responses from a couple of the significant energy retailers, but I have come back to them as a matter of urgency because I realise that this has been on the Notice Paper since the summer break late last November.

Certainly, I will be endeavouring to get those responses from those retailers over the next few days. I also indicate that the opposition, together with the shadow minister, Mr Mitch Williams (member for MacKillop), is considering some amendments but we want to have some further consultation with these significant retailers. With those few words, I seek leave to conclude my remarks.

Leave granted; debate adjourned.

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