States asked to step up on power prices

Treasurer Jim Chalmers says Australia faces a series of complex productivity challenges.

Treasurer Jim Chalmers says Australia faces a series of complex productivity challenges. Photo: AAP

Treasurer Jim Chalmers remains confident state and territory leaders will be able to come to an agreement on how to ease the rising price of energy.

Leaders will meet with the prime minister virtually on Friday at national cabinet to discuss coal and gas price measures, with Prime Minister Anthony Albanese reportedly issuing a list of demands to NSW and Queensland to impose their own price caps on coal.

Treasury has projected tariffs will rise by 56 per cent for electricity and 44 per cent for gas by 2024 without government intervention.

Dr Chalmers said while the cost of the energy measures were still unknown, quick action was needed to deliver short-term relief for customers.

“We’re in discussions with not just the state governments but with the regulators and the various industries impacted by these high energy costs,” he told Sky News on Wednesday.

“We will work with all of the interested parties, including the states, to see if we can come up with something which is meaningful, but responsible and temporary as well.”

A face-to-face national cabinet meeting was postponed after Mr Albanese tested positive to COVID-19.

The treasurer has ruled out using a windfall tax on energy companies as a way of shifting energy prices.

However, he said other measures were on the table.

“If there’s a regulatory outcome here that requires us to be reasonable in other ways, then we’re prepared to explore it,” he said.

“Our priority is on regulation, rather than using the tax system, we’ve also said that we’d rather not interfere with international contracts if we can avoid that.”

Energy ministers will meet separately on Thursday in Brisbane to discuss reforms to the sector.

Federal Energy Minister Chris Bowen said the government was looking at easing pressures on households and businesses.

“(We’ve) methodically worked through, come up with options and ideas, which mean that the various jurisdictions use the powers best available to them for the most impact,” he told ABC Radio on Wednesday.

“There are some areas where the Commonwealth clearly has effective powers (and) other areas where the states might have more effective responses available to them, hence we’ve sat down … to talk those issues through in a very good faith manner.”

Shadow treasurer Angus Taylor said new ideas were being “leaked” almost every day and the states had no idea what the actual proposal was.

“It’s very hard to comment on something that is as amorphous and chaotic as what we’ve seen in recent weeks from the government. Every minister is running in a different direction,” he told ABC News.

Mr Taylor called on the government to put downward pressure on energy prices, but would not say if he supported a coal price cap.


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