SUMMARY OF MEDIA CONFERENCE AT AINSLIE IGA (ACT) ON TAX CUTS, POWER PRICES & SOLAR THERMAL PLANT AT PORT AUGUSTA

1 April 2017

After lengthy negotiations between the Nick Xenophon Team and the Federal Government, Senator Nick Xenophon and his colleagues have secured a landmark package of measures designed to put downward pressure on household and business electricity and gas bills.

These were conditional changes in return for the NXT moving from $10 million to $50 million for small and medium business tax cuts.

A range of measures have been agreed to that will break an investment strike in the utilities sector and bring greater supply to market which will ultimately see reduction in electricity and gas price and “will be good for mums and dads and small business owners alike.”

The energy package includes:

  • A firm deadline to bring about changes to National Electricity Market Rules by 1 July 2018 – these changes, properly designed and implemented, will bring investment certainty to the electricity sector and put in place measures that will bring electricity prices down whist increasing electricity security.
  • A ‘use it or lose it’ policy that will force gas companies that are sitting on huge gas reserves, such as beneath the Bass Strait, to bring cheap gas to market or hand the tenements over to companies that will.
  • A commitment by government to use its powers to ensure Australian gas is directed to the domestic market if voluntary agreement is not reached with gas companies by 1 July 2017.
  • Furthermore, the Government has committed to longer term public interest requirements to be met for all future gas export contracts.
  • An agreement by government to implement gas pricing and capacity transparency recommendations of the ACCC gas and Vertigan inquiries by 1 July 2017 to ensure that businesses negotiating gas supply contracts are not negotiating in the dark. 
  • An agreement that the Productivity Commission will examine the effect and appropriateness of gas company joint venture arrangements in the market place where there are limited suppliers.
  • A $110 million low-interest loan from the Federal Government for installation of the Solar Thermal Plant in Port Augusta that will provide effective baseload power and hundreds of jobs to Port Augusta.
  • A one-off energy assistance payment of $75 for single recipients and $125 for couple recipients of the Aged Pension, the Disability Pension and the Parenting Payment to provide relief for those most vulnerable to power price rises.

“This is a valuable step that will assist small to medium businesses, and with the additional agreement from the Government, will also protect household consumers,” said Nick.

“This tax cut is not a win for multinational companies trying to avoid tax. This is not a win for big business. This is not a win for the top end of town. This is a win for everyday Australians.

“Businesses such as the local family-owned IGA, who have a high turnover but low margins, will now be able to compete more effectively against the supermarket giants of Coles and Woolies. The ALP – which has previously supported corporate tax cuts - the unions and GetUp have campaigned against these changes. Why would opponents of these tax cuts not want to give your local family-owned IGA a fighting chance to compete with the supermarket giants of Coles and Woolies?

“We need to put an end to the investment strike that we have in this country where investors won’t invest in Australian energy markets simply because of the policy uncertainty. The changes to the National Electricity Market Rules will give that policy certainty.

“We are paying in Australia three times the spot price of gas in the US and double the long-term contract price in Japan. Why is it hat the gas we are exporting to Japan, costs twice as much here as it does there? There is something seriously wrong with our gas market and these measures will mean more gas on the domestic market.

“The Government foreshadowed last election that they would construct a solar thermal plant in South Australia. This has now been elevated as a key government policy. It will provide effective baseload power and will create hundreds of jobs in Port Augusta as well as replacing more than the jobs that were lost when the Alinta power station closed. This will be a flagship project for the rest of the country that will show renewables can be an effective baseload as well.

“Families are doing it tough at the moment. The one-off payment to pensioners will make a real difference in taking the pressure off all households who face a tough winter of high energy bills.

“It is my view that bringing energy costs down and providing energy security is of critical importance to the future of Australia, and will deliver benefits that in the short to medium term will outweigh any tax cuts to businesses, particularly given the magnitude of forecast energy price increases in coming months.”

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