Mr TAYLOR (Hume—Minister for Energy) (15:24): Well, I don't know when lower prices became ideological, but I accept that I am absolutely committed to lower prices, getting them down, down, and down. But it's clear that Labor's reckless policies at both state and federal level are why power prices are where they are today. The member for Port Adelaide has written a book on this. It was published in 2017. The reviews are mixed, I would say, to be kind. One of them described it as 'longwinded and boring, don't bother', but I will put that aside for the moment. In his book Climate Wars, he admitted that Labor made many mistakes on energy. He said:
… we've made mistakes in both the design of our policies and their presentation … In hindsight, it's also clear to most that the carbon price introduced under the Clean Energy Act was too high …
We abolished it, and prices came down 10 per cent. During six years of Labor government, power prices doubled and went up each and every year. It was Labor who gave us pink batts, cash for clunkers, a citizen's assembly and of course the carbon tax, which I've already referred to. But they haven't learned from their mistakes, their errors of judgement. They're itching to have another crack. They want to implement a 50 per cent renewable energy target.
That's going to mean more subsidies and higher prices paid for by every single hardworking household and business in this country. I'll come back to what the 50 per cent will mean in a moment.
Let me talk about our track record as a government in this area. Under my predecessor, now the Treasurer, prices came down. On 1 July we saw retail price reductions—as he said only about an hour ago—in Queensland, South Australia and New South Wales. To take examples, in South-East Queensland we've seen price reductions of up to 14 per cent, $1,400 a year, off the bills of small businesses. In South-East Queensland we've seen price reductions for residential users of up to nine per cent, $140 a year. That's $140 a year for hardworking Queensland households. We've seen similar reductions across the other states that I mentioned.
Wholesale prices have also turned a corner. They're up to 25 per cent down this year on the previous year. We've secured more gas for Australia. We've seen prices up to 50 per cent down from their peak, from $20 a gigajoule down to $10 a gigajoule in 2018, and of course that's been a big part of what's been responsible for a reduction in prices.
We have reined in the power of the networks. We saw investment increase by 100 per cent in the assets of the network companies and the charges of the network companies under Labor between 2007 and 2014. We've abolished the limited merits review, and we're seeing those charges come down. But the impact of those charges has been over $1 billion a year on Australia and hardworking Australian businesses and households. As the member for Port Adelaide himself acknowledged, past overinvestment in networks has been a big part of the problem here. They had six years to deal with this, and they failed to do that.
We have taken action, and we're taking action in three areas. One is stopping the price gouging by big energy companies. It has happened, unfortunately. We saw significant increases in the bids made in the wholesale market after the closure of Hazelwood. Bids increased by over 100 per cent at the time of the closure of Hazelwood. This is what happens when you take reliable, fair dinkum, base-load power out of the system.
Secondly, we're providing customers with a price safety net. We've already seen 1.8 million households better off because of the work of the government to bring down retail prices, and we have accepted the recommendation of the ACCC to establish a default market price, which will ensure that those Australians who are least positioned to negotiate a better price will get a better price. The ACCC itself has estimated that the price savings for a typical Australian household will be between $200 and $400.
We have said that we will back investment in reliable generation, encouraging more competition. That means we need to have base-load power in the system, and we're going to back it in. Already, we're seeing a number of projects coming forward to be supported—to make sure we have the affordable base-load power that everyone in Australia wants. We have turned the corner. There is more work to do, and, with that suite of measures in those three areas—stopping the price gouging, providing customers with a price safety net, and backing in investment in reliable generation—we believe we will do that work.
There is an alternative: Labor's 50 per cent renewable energy target and 45 per cent emissions reduction target. If you look at Labor's national platform, what I like to call 'Bill's little red book', you will see that they have a plan to reshape the economy, and it will be expensive. Labor's true thinking was revealed by their environment action network, a group called LEAN, which said, 'Higher prices are not market failure; they're proof of the market working well.' They want higher prices. They believe that's a good outcome. The member for Port Adelaide endorsed LEAN. He commended them for their work. Not even the unions support this Green-left ideology. The CFMEU president said that a 50 per cent RET by 2030 will increase the cost of electricity for manufacturing and households while being a 'poor tool' to reduce Australia's overall emissions. Ben Davis, secretary of Bill Shorten's branch of the AWU, said:
The rush away from coal and gas-fired electricity power stations to renewables is a little unseemly in its haste, because we are potentially crucifying hundreds of thousands of manufacturing workers.
They are the people you used to stand up for but clearly don't anymore.
The unions aren't the only ones who have seen through this shady Leader of the Opposition and his crony, the member for Port Adelaide. You mentioned Tony Wood from the Grattan Institute earlier. On Labor's claims that prices would go down as a result of a higher emissions reduction target, what has Tony got to say? He said that it is 'unlikely to be sustainable' and will 'accelerate plant closures'. Which coal-fired power stations do you want to shut down early? Is it in Gladstone? Is it in the member for Flynn's electorate? Is it Tomago that you want to shut down? Do you want to make sure every aluminium smelter worker in Australia is out of a job? Tony Wood goes on to say that it 'requires higher consumer prices' and would be 'inherently uncertain'. That's your 50 per cent renewable energy policy.
The Business Council of Australia has described Labor's 45 per cent emissions reduction target as 'economy wrecking'. We want the subsidies to phase out, and they will. They want the pork to continue forever. Labor want to stuff the system with an intermittent generation, forcing the closure of reliable base-load generation. The fact is that Australians will pay higher power bills under Labor and will be left in the dark. Their ideologically driven plan is for higher prices and less security. Our plan is for lower prices.
We know exactly what a 50 per cent renewable energy target will do, because we've seen it in South Australia. In South Australia we've seen electricity prices amongst the highest in the world, at 47.8c per kilowatt hour. Compare that with Latvia, at 25.6c per kilowatt hour; Estonia at half that—23.4c per kilowatt hour; Romania, that energy powerhouse, at 21.2c per kilowatt hour; and Hungary at 19.3c.
The contrast could not be clearer. We've taken action. We're securing better deals for 1.8 million households, and prices are coming down. We will not be distracted from our goal of getting power prices down for Australian households and businesses by motions like this.