Labor gets behind energy 'big stick' laws

Labor has agreed to support the government's "big stick" energy laws under a number of conditions.
Labor has agreed to support the government's "big stick" energy laws under a number of conditions.

Despite claiming the government's big stick energy laws will force power prices "up and up and up", Labor will wave them through parliament with some tweaks.

Labor has warned voters not to be fooled by the laws which are intended to ensure energy companies keep a lid on prices and maintain supply.

But the Labor caucus on Tuesday endorsed a decision by the shadow cabinet to back the bill in parliament provided it is amended to ensure state-owned electricity assets can't be fully or even partially privatised if forcibly divested.

It says this is a deal-breaker and if the change isn't made, it will oppose the legislation as a whole.

The Greens believe the government has already agreed to this amendment in separate negotiations with independent MP Bob Katter.

The government argues the bill will ensure energy companies play by the rules in the retail market by requiring them to pass on cost savings to consumers.

In the worst cases of misconduct by wholesale energy firms, the Federal Court will be empowered to issue divestiture orders.

Labor also wants a legislated review of the bill and its impacts on the energy sector, prices and consumers before it sunsets in January 2026.

Opposition Leader Anthony Albanese says the legislation has been fixed up - in Labor's view - from what was presented to the previous parliament.

"Whereas the previous legislation would allow Angus Taylor to intervene as a minister and make decisions, the decision-making processes in the new legislation have been changed," he told reporters in Canberra.

Despite the unanimous decision to back the bill, shadow treasurer Jim Chalmers and energy spokesman Mark Butler said no one should be fooled by the legislation.

"The 'Big Stick' bill will do nothing to provide the policy certainty needed to support investment in clean, reliable and affordable power, which lies at the heart of the energy crisis," they said in a joint statement.

"As a result, power prices will continue to go up and up and up."

Prime Minister Scott Morrison accused Labor of running a "climate fight club".

"The thing they have forgotten about climate fight club is you are not supposed to talk about it," he told parliament.

"But they can't help themselves talking about it.

"And now we've got the Leader of the Opposition who wants to come into this place and effectively engage in a protest and glue his hands to the dispatch box."

Mr Albanese said the prime minister had attacked children over caring for the planet following the recent school strikes and rallies.

"He's like a Scooby Doo villain, who's sure he would have gotten away with it if it wasn't for those meddling kids. That's his attitude," he told the chamber.

There are three basic provisions in the bill:

* a retail pricing measure requiring retailers to pass on 'sustained and substantial' reductions in costs;

* a contract liquidity prohibition penalising generators that withhold electricity contracts for the purpose of subduing competition; and

* a wholesale conduct prohibition banning generators from manipulating the spot market.

The competition watchdog will be able to issue warning and infringement notices and companies face court-ordered fines of at least $10 million.

The Greens say the bill is aimed primarily at forcing AGL to keep its coal-fired Liddell power station open longer than planned, and view Labor's support for the laws as reprehensible.

A coalition backbencher told their party room meeting: "Our policy remains to ensure that power stations are sweated for as long as they feasibly can be."

Australian Associated Press