Some Liberals are concerned about the power to break up big companies being extended economy-wide

This article is more than 1 year old

This article is more than 1 year old

The Morrison government’s backbench economics committee has signed off on the long telegraphed “big stick” package but MPs, already uncomfortable about the proposal, have expressed reservations about how it might be amended in the Senate.

The package, which contains a power to break up big energy companies if they engage in price gouging, will go to the Coalition party room for approval on Tuesday.

In an effort to quell internal and external doubts about the package, the government will sunset the legislation in 2026, and amend the proposal introduced and shelved during the previous parliament to ensure any forced divestiture cannot result in the privatisation of state-owned energy assets.

The government has now inserted a number of procedural steps to be undertaken before a divestiture can be ordered.

Coalition's 'big stick' energy laws a 'backdoor to privatisation', Labor says Read more

While the changes have mollified some Liberals discomfited about the principle of breaking up big companies, Nationals who have pursued the package vigorously both before and after the May election could have objections about the sunsetting and the additional procedural hurdles in the revised package.

Guardian Australia understands concerns were expressed during the backbench committee meeting on Monday morning about potential Senate amendments that would alter the package as it currently stands. The backbench committee also signed off the package based on a briefing from the treasurer, Josh Frydenberg, and the energy minister, Angus Taylor, rather than sighting the legislation, and some reservations were expressed.

MPs are concerned that too often amendments are added because of negotiations with the crossbench by the government Senate leadership, and the changes are never referred back to the backbench committee for approval.

Guardian Australia understands that to address the anxiety, Frydenberg gave an undertaking to bring the package back to the committee for a second approval if there were substantial amendments added during parliamentary debate.

Centre Alliance has been signalling for months it will attempt to amend the proposal once it reaches the Senate to extend the divestiture power, which is limited to the energy sector, to an economy-wide power.

The Centre Alliance senator Rex Patrick told Guardian Australia on Monday the proposed divestiture power “needs to be broadened” and should apply across the economy to prevent consistent, egregious misuse of market power by big companies, and he singled out the supermarket giants as potential examples.

Patrick said such powers existed in the United States, and should be implemented “as a deterrent”.

Because the National party has long championed powers to break up the big supermarkets, Liberals are concerned about the potential for the Centre Alliance amendments to succeed, assuming Labor continues to oppose the package.

Labor opposed the proposal during the last parliament, but is currently reviewing its position. On Sunday the shadow energy minister, Mark Butler, said Labor would consider changes introduced by the government, but still harboured “very serious concerns”.

“The Energy Users Association representing the biggest users of electricity in this country also said they were concerned this bill would simply smash investor confidence and force power prices up,” Butler told the ABC.