Australia has some of the most expensive energy prices in the world, despite our abundance of natural resources.

The Australian Taxpayers’ Alliance 9 point “Cheap Energy Target” plan provides a realistic, sensible pathway to securing our future.




Scrap The Paris Mandate

Utilising Behavioural Economics – not mandates – to achieve Paris Targets.

It is proposed that the National Energy Guarantee would ensure 18% of energy emissions be sourced from renewable sources and that techniques learned from behavioural economics be used to ensure voluntary compliance to bridge the gap to 28%.

This is a significantly superior model to that currently proposed of leaving emissions reduction quotas to the discretion of future Energy or Environment ministers, a model which puts electricity consumers at risk and causes great investment uncertainty. Households and businesses who have a commitment to renewable energy would be able contribute additional funds to ensure Australia matches or exceeds its commitment under the Paris Accord, thereby offsetting their carbon emissions and even leaving a negative carbon footprint. This is more economically efficient and also matches liberal values of individual choice and personal responsibility.

A model based on the most cutting edge behavioural economics research will facilitate compliance.




Provide Certainty For Gas & Coal Investment

Ensuring investment certainty through codifying regulatory compensation.

 A key factor in increased prices is the barrier to investment due to regulatory uncertainty. As a result, investments in certain types of power generation is not made, and prices of existing generators are significantly inflated due to a perceived shorter lifespan. Codifying a system of regulatory compensation will guarantee companies significant payouts for losses if the regulatory environment is changed. This will provide certainty and will drive down costs in a manner that remains true to free market principles.



Abolish All Green Subsidies

Treat all sources of energy generation equally by 2020.

 Levelling the playing field by bringing forward the elimination of market-distorting subsidies and green energy programs to 2020 will save considerable taxpayer funds which may be invested elsewhere, while simultaneously stabilising investment opportunities driving down costs to consumers. While the federal government plans to abolish the Renewable Energy Target and phase out subsidies by 2020, states and territories including Queensland maintain their own Renewable Energy Targets.  

 These do not just hurt consumers within those jurisdictions, but hurt consumers in other states and territories who share the collective National Energy Market grid and have no say in the matter. Where these policies are proven to negatively impact electricity prices across the NEM, it is submitted that the federal government should impose appropriate penalties through a reduction in the state’s share of GST distribution. These savings can be used to fund rebates for electricity consumers across the NEM.

 Subsidies provided under the federal Smallscale Renewable Energy Scheme should also be abolished by 2020 instead of the planned 2030 phase-out date in line with the recommendations of the Australian Competition and Consumer Commission (ACCC).




Support Struggling Families, Pensioners & Businesses

Redirect savings from the elimination of renewable subsidies and green energy programs into rebates for individuals and businesses until prices stabilise in 2025.

 Short term relief may be provided to individuals and businesses through increasing assistance to low income households with funds sourced from savings in subsidies. Additionally, jurisdictions such as New South Wales are to be encouraged to narrow eligibility to existing schemes from higher income earners and redirect this to those more in need.

 Similarly, other cost savings could be channelled into the provision of targeted tax credits for energy intensive businesses (manufacturing, those that require refrigeration etc.) to boost economic growth while investment is undertaken.

 Economic modelling can facilitate this scheme by establishing a ‘revenue neutral’ level of tax credit whereby the costs of the credits will be offset by revenues generated through its facilitation of investment, job creation and economic activity.




Unleash Australia’s Natural Resources

Liberalise gas extraction.

 Australia abounds in rich resources of gas (both offshore and onshore; both conventional and unconventional including coal seam and shale) which has the potential to deliver long-term, clean, cheap, energy. The liberalisation of extraction will result in significant further downward pressure upon prices, especially over the medium-to-long term.




Supporting Land Owners

Encourage gas extraction through reforming our royalty system.

 Adopting a model similar to the United States, where a recent energy revolution has resulted in falling prices and greater energy independence. It is proposed that royalties from mineral extraction are diverted to land owners, a percentage of which is taxed.

 Any decrease in governmental revenues will be offset in the longer term through significant increases in extraction while such a policy would lead to a significant boost in support for exploration and thereby extraction leading to significant increases in supply.


Incentive state-based energy competition

Using the GST to improve state based policies.

 Use GST Distribution incentives to reward states who liberalise gas extraction and allow this to be exported to other states. For instance, Western Australia presently is hindering gas extraction, and reserves a portion of the gas it does extract for the domestic market, thereby lowering its own prices at the expense of other states. A system of GST-based incentives will increase investment, and allowing cross-border supply will increase competition with flow on effects to other states.



End Gold Plating & Boost Competition

Adopt sensible regulatory reforms to lower prices through increased competition.

 Multiple policies can be enacted that derive from ACCC recommendations to increase competition and end inflated prices through the process known as “gold plating”.

 Adopting best-practice regulatory models in states which have avoided increasing their electricity bills due to overinvestment in electricity network assets will assist in lowering prices in the long-term. Empowering regulators such as the AER and AEMO with further powers will also assist in narrowing the information gap which allows energy companies to game the system by convincing regulators that they need to invest in more assets than they need while passing costs to consumers.

 Competition can be boosted at a retail level by ensuring greater transparency in third party offer websites, allowing consumers to accurately compare all available offers in the market while preventing energy companies from taking advantage of an ‘inactive’ customer base who are paying more for their electricity than they need to. In jurisdictions with state-owned electricity generation portfolios and networks, these can be divided to increase competition and drive down prices per the ACCC recommendations.




Legalise Nuclear

Legalise cheap and clean nuclear energy. 

While debate surrounds the short term cost-effectiveness of nuclear power, a lifting of the moratorium allowing potential future market-driven responses will nevertheless provide greater clarify to investors placing downward pressure upon prices.


Authorised by Tim Andrews, Australian Taxpayers' Alliance.

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