News National The Turnbull government is in the dark on tax and energy
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The Turnbull government is in the dark on tax and energy

Malcolm Turnbull
Sky-high electricity prices may well well spark a party room revolt - with Tony Abbott leading the charge.
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When all else is failing, call an inquiry.

Malcolm Turnbull’s government is not the first to do it and won’t be the last. The lights are flashing in someone’s brain that they need to be seen doing something about electricity prices other than blame Labor.

So the consumer watchdog, the Australian Competition and Consumer Commission, has been given a year to investigate the national energy market and evidence already uncovered by the Grattan Institute that the operators are price gouging.

The privatised market is far from providing the price-constraining competition we were promised when governments began flogging their power assets.

The Australian Energy Council (AEC), representing 21 major electricity and downstream natural gas businesses supplying the majority of electricity production nationally, says the inquiry is not the answer.

AEC CEO Matthew Warren says “we are running out of electricity because for the past decade we haven’t had clear, consistent national energy and climate policy”.

The Nick Xenophon team will have a key balance of power role.
Nick Xenophon says affordable energy is more important than tax cuts. Photo: AAP

That policy needs to be bi-partisan, he says, and, to encourage investment, needs a price signal.

An emissions intensity scheme is now seen as the key by everyone except the Coalition government.

An EIS is like kryptonite to Superman for the Coalition, even though Mr Turnbull himself once argued persuasively for one.

Key Senate crossbencher Nick Xenophon says the issue of affordable secure energy is a bigger worry for manufacturers than a marginal decrease in their tax rate over 10 years.

His three votes, along with Labor and the Greens, are enough to ruin the week for the government in the Senate as it tries to get the centrepiece of its jobs and growth plan, the $50 billion corporate tax cut, through Parliament.

A taxing week ahead

This week will be a huge moment of truth for the struggling Turnbull government. All the signs are its enterprise tax plan will go down in flames.

Negotiations may save some of the edifice but not all of it. But as is the way with this government it has managed to create the impression that the Prime Minister and his Treasurer are at odds over what to do next.

The Tony Abbott cheer squad on Sky News, led by the former prime minister’s chief of staff Peta Credlin, has helpfully suggested if the budget abandons the plan to proceed beyond businesses with turnover beyond $10 million then Mr Turnbull is the loser.

That analysis is based on briefing notes from the Prime Minister’s office at the end of last week when Mr Turnbull sought to end speculation that the government’s commitment to its enterprise tax plan was waning.

Malcolm Turnbull in Parliament
Mr Turnbull has demanded Senate support for corporate tax cuts. Photo: AAP

Mr Turnbull insisted: “It is vitally important the Senate support our plan to keep investment and jobs in Australia.”

Australia’s corporate tax rate is increasingly uncompetitive internationally was the message of the briefing.

Mr Turnbull assured the Fairfax papers he would keep bowling up the full plan, despite its huge cost to the budget, and even hinted it could be a double dissolution election trigger.

Nothing would please Labor more.

Despite the Fairfax-Ipsos poll showing more Australians support the tax cut than don’t, it is not a majority.

Sticking with it allowed Bill Shorten to ask questions like this: “The Prime Minister is giving a $50 billion handout to big business and a tax cut for millionaires on July 1, whilst supporting pay cuts for nearly 700,000 Australians. Why does the Prime Minister have a plan for big business but always has an excuse to do nothing for Australian workers and their penalty rates?”

Mr Turnbull’s answer was to call Mr Shorten a hypocrite for doing deals with businesses when he was a union leader.

Labor Leader Bill Shorten agrees Australia is facing an energy crisis. Photo: AAP
The latest Ipsos poll showed Labor widening its lead. Photo: AAP

It’s no answer, and while many on the backbench love the blood sport of bashing the opposition leader, others are despondent.

The latest Ipsos poll found the government now trails Labor by 10 points, two-party preferred.

While it is no predictor of who will win the next election, due in two years, it is market research the government will ignore at its peril.

Polling analyst Andrew Catsaras says tracking all the polls since the election has seen Labor open up a lead close to seven points.

Something is definitely not working. Corporate tax cuts over a 10-year horizon and an electricity investigation with a year to run are hardly the remedy.

Paul Bongiorno AM is a veteran of the Canberra Press Gallery, with 40 years’ experience covering Australian politics. He tweets at @PaulBongiorno

For more columns from Paul Bongiorno, click here

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