Liberal MP says party room not yet consulted and could put brakes on landmark energy policy

The chairman of the Coalition’s backbench committee on climate and energy has warned the energy minister, Josh Frydenberg, the party room might put the brakes on his emissions reduction legislation when parliament resumes next week.



Liberal Craig Kelly told Guardian Australia he did not know if federal legislation giving effect to the emissions reduction component of the national energy guarantee had been drafted yet, but he said the backbench committee had not yet been consulted about the government’s final position.

“I think realistically we would need more time to consider this,” Kelly said. “There is a lot of complex detail yet to be released.”

'Big call': minister refuses to link drought to climate change on Q&A Read more

Frydenberg wants to secure party room sign-off next Tuesday, once parliament returns after the winter recess, in order to push state and territory energy ministers in the direction of an in-principle sign off for the Neg.

But Kelly’s clear warning ahead of the resumption of parliament next week suggests the federal energy minister will face a new round of internal turbulence when he tries to lock down his colleagues in Canberra once they return.

The outspoken Liberal said he would be “very surprised” if the states would agree to the Neg mechanism this coming Friday and then federal legislation be ready the following Monday to be examined by the backbench committee ahead of a full party room discussion on Tuesday. “We need more time,” he said.

Both the Victorian and Queensland governments are now warning Frydenberg that they won’t sign off on the Neg until the federal energy minister secures party room sign-off from his Coalition colleagues – a game of brinkmanship that could become something of a Catch 22.

Cabinets in the three Labor jurisdictions with the power to make or break the Neg met on Monday, with Victoria and Queensland now signalling there will no state sign-off until Frydenberg secures a federal sign-off.

As well as the brinkmanship on the timing, the ACT cabinet has also explicitly referenced detailed concerns about the Neg as currently drafted. The ACT chief minister, Andrew Barr, and the climate change minister, Shane Rattenbury, identified three areas that would require improvement before the ACT would sign on.



The joint statement from Barr and Rattenbury said the emissions reduction target – currently 26% – needed to be increased, and the final design “should not unreasonably lock in targets”. It said the review of the target, which the commonwealth proposes to take place in 2024, “needs to be made more rigorous and occur earlier”.

Frydenberg on Monday declared he was not prepared to meet a demand for increased ambition in the emissions reduction component of the scheme, because it was up to the federal government to determine national policy, not the states.

Josh Frydenberg spurns emissions compromise in national energy guarantee Read more

In an interview with the ABC on Monday night, the prime minister rebuffed calls in the states for a higher emissions reduction target, and he also rejected arguments that the Neg was yet to clear the Coalition party room.

Malcolm Turnbull said the government party room had already endorsed the Neg and the pressure was on Bill Shorten and the Labor states to sign on to a policy that would deliver cheaper energy prices for consumers.

“It’s been endorsed by the party room already and will be endorsed again,” the prime minister said. “It’s got overwhelming support because my party ... wants Australians to pay less for electricity.

“We’ve already succeeded in turning the corner on electricity prices.

“We took strong action and got wholesale prices down, and we’ve started to see retail prices come down, and there’s more to go.”

Turnbull also suggested the implementation of the Neg would result in a $550 reduction of energy prices a year. The advice from the Energy Security Board is the Neg will save consumers $150.

“Annual average residential retail electricity bills are projected to be around $550 lower, on average, over the 2020-21 to 2029-30 period than in 2017-18,” it said. “The modelling suggests that around $150 of that saving is additional savings due to the implementation of the guarantee.”