A ragged Council of Australian Governments (COAG) meeting has ended with a split over a new competition agreement and public swipes at Malcolm Turnbull and his government.
At a news conference where first ministers freely aired their disgruntlement on a range of issues, Turnbull reinforced the message that he is immovable on his refusal to consider an emissions intensity scheme (EIS) for the electricity sector, even if the evidence to inquiries in coming months says it is the best option.
He said an EIS had “exactly the same purpose as a carbon tax” and would increase the cost of electricity to households and businesses.
Usually there is some gloss of unity when the first ministers appear together after COAG meetings, but Friday saw a blunter approach.
The Labor premiers of Victoria, South Australia and Queensland had refused to sign an agreement on reforms to enhance competition and productivity. Victoria’s Daniel Andrews told the news conference that a number of past agreements hadn’t been honoured and there was no money attached to this one.
Andrews also complained that, despite some progress, “we could have gone further” on the issue of domestic violence. In particular, he had been pushing for support for family violence leave. “I think we need to do more than talk about family violence leave. We need to deliver it in full.”
On energy policy, South Australia’s Jay Weatherill said the chief scientist, Alan Finkel – who briefed the meeting on his preliminary report – had quoted with approval findings that the most cost-effective option for reducing emissions was an EIS.
An EIS establishes an emissions intensity baseline for the generation section – power stations operating above that have to buy credits, while those below it receive credits which they can sell.
Weatherill criticised Turnbull for earlier this week ruling out an EIS, and invoked Turnbull’s past sentiments, when he had said that “mature evidence-based policy” communicated “through sophisticated explanation rather than infantile slogans” would mark his leadership. “That’s simply all we’re asking for here,” Weatherill said.
Turnbull said the most striking observation from Finkel had been that in the last six years household energy prices had risen 61%, while inflation had only been 14%. “This is a massive increase in the burden on Austrlaian households,” he said. “We need to ensure that we do everything we can to keep energy prices as low as we can.”
Asked whether he’d change his opposition to an EIS if compelling evidence for it came forward to two inquiries running over coming months, Turnbull said an EIS involved imposing a cost – “a tax, if you like” – on coal-fired generators to subsidise lower emission generators. So, it had “exactly the same purpose as a carbon tax … it’s a form of emissions trading scheme”.
“It is an additional cost on the electricity system. And it will increase the cost of electricity to households and businesses.” The government’s focus was on putting downward pressure on prices.
Turnbull said Australia would meet the emissions reduction target it had signed up to in the Paris agreement. But the Finkel report says: “While the electricity sector must play an important role in reducing emissions, current policy settings do not provide a clear pathway to the level of reduction required to meet Australia’s Paris commitments”.
Meanwhile the Business Council of Australia has said all options should be open in the transition to a lower emissions future.
“The categorical ruling out of mechanisms to achieve this transition, or imposing arbitrary moratoriums on lower-emissions fuels such as onshore gas limits Australia’s options,” it said in a statement after COAG.
“Without all the policy options on the table, Australia risks relying on expensive subsidies to renewable energy or blunt regulatory instruments which would increase costs for industry and their customers.”
The first ministers did settle the long-running issue of reclassifying the Adler lever action shotguns.
The lever action shotgun with a magazine capacity of no greater than five rounds will be moved from category A to the tougher category B. Those with greater than five rounds capacity will be put in category D, the most restrictive, making them only available to professional shooters. This means the federal government can now lift its import ban on this weapon.
But the decision will bring pressure on Nationals MPs, who recently lost a NSW state seat to the Shooters, Fishers and Farmers Party.
Liberal Democrat senator David Leyonhjelm, who has led the push to overturn the import ban, said in a statement: “There are now 800,000 firearms owners in this country who feel they have been placed in the deplorables basket. They won’t be voting for the major parties at the next election.”
Authors: Michelle Grattan, Professorial Fellow, University of Canberra