Labor rearguard action to get divestiture powers delayed likely to fail as Wilkie and Katter join with Coalition

This article is more than 1 year old

This article is more than 1 year old

The Morrison government is hurtling towards a successful lower house vote on its controversial energy package despite a concerted rearguard action by Labor to defer a vote until the new year.

With fierce lobbying under way in the parliament on Wednesday night to try and derail the vote, the Coalition pushed forward, bringing on the second reading debate with the support of Bob Katter and Andrew Wilkie.

After nine divisions in the space of an hour, and the treasurer, Josh Frydenberg relocating to cajole various crossbenchers to support the government in bringing on the package, the shadow treasurer, Chris Bowen, objected to the government forcing substantive discussion on legislation which government MPs had not yet seen.

Bowen contended the legislation had been pulled together in “an all-nighter in the Treasury”. He said it was possible it had drafting errors, given the government had been forced by its own backbench to rework its original proposal, and experts hadn’t had a chance to examine it.

The shadow treasurer said there were orderly processes in place in the parliament “to stop bad law”.

Australia’s major power companies, who have foreshadowed a high court challenge against the divestiture regime, also urged the government to slow down.

“We are disappointed the government has introduced this bill into the parliament, not only because it represents unprecedented market intervention, but also because of the secretive way the bill has been developed without any reasonable consultation or consideration of its impacts,” said the chief executive of the Australian Energy Council, Sarah McNamara.

“This bill, if passed, will have far-reaching consequences beyond the energy industry, and yet, despite these ramifications and without the support of any industry body, consumer group or even its own regulator, the government is pressing on regardless.”

The government revised key components of its much vaunted “big stick” divestiture power after internal objections from more than 20 backbenchers. Government MPs argued breaking up private companies offended core Liberal values.

The redrafted proposal ensures that divestiture will only happen after a recommendation by Australia’s competition watchdog, which has first sanctioned poor corporate conduct.

The courts would also be the ultimate decision-makers, rather than a government minister – the original proposal that triggered an intense backlash in the business community, and arguments the regime may be unconstitutional.

Scott Morrison and the energy minister, Angus Taylor, defended the reworked package on Wednesday, saying critics of it had lined up with the power companies at the expense of consumers.

The Liberal Craig Kelly, whose preselection was saved by Morrison earlier this week, declared Labor was “aiding and abetting” the power companies at the expense of households and business. “That’s whose side they are on,” Kelly said.

Given its diminished majority in the House of Representatives, the government needs two crossbench votes to pass the legislation.

Katter seems a certainty, and Wilkie confirmed to Guardian Australia on Wednesday night he would vote for the package. He said it was important for the government to have the power “to rein in the energy giants when they act improperly”.

“Currently these companies have way too much market power, and just the threat of having to divest some assets in some circumstances will encourage them to improve their behaviour,” Wilkie said.

The Tasmanian independent said he had been concerned about aspects of the legislation but the adjustments the government made to keep the backbench in line had addressed the deficiencies.

“My initial reservations with the bill were largely addressed by the safeguards that are included, and in particular that any divestment can only be on the advice of the Australian Competition and Consumer Commission and at the order of the federal court.”

He said divestiture powers existed in other countries.

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But Wilkie said Australia was still devoid of a functional energy policy. “It needs to be clearly understood that this is a very narrowly-focused bill and nothing like the comprehensive energy policy the country so desperately needs.”

The Centre Alliance MP Rebekha Sharkie also confirmed on Wednesday night that she would support the bill.

While securing progress on divestiture, the Coalition has, however, triggered a major new political fight in Queensland. Taylor has demanded Queensland’s state-owned generators reduce their power prices, or face an order to sell assets.

With privatisation a sensitive issue in Queensland, Taylor’s threat was rebuked immediately by both Queensland Labor and by the LNP.