Shadow energy minister Ted O’Brien declares Labor Government’s price cap mechanism ‘will fail’ and have ‘disastrous effects’ on Australian economy

Shadow climate and energy minister Ted O’Brien has said the government’s plan to cap coal and gas prices will have a “disastrous effect” on industry and the economy as the Coalition prepares to reject the proposal in Parliament.

Prime Minister Anthony Albanese unveiled the comprehensive package on Friday which will include a $125/tonne cap on coal and a $12/gigajoule limit on gas.

The measure will ensure the price producers can sell coal and gas cut by more than half, in a move which has enraged the gas industry and the Coalition.

The shadow energy minister continued the opposition’s attack line, again arguing the solution was to ramp up domestic supply.

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Mr O’Brien said the government’s proposal would “fail in the short term” and severely impact investment.

“The legislation that I read yesterday was yet to go through shadow cabinet yet to go through the party room I think is a disaster and it is a monster in the making,” Mr O’Brien told Sky News Australia on Sunday.

“It is going to have a disastrous effect on the industry over the longer term because it kills supply.”

The government will recall Parliament for a short and urgent session on Thursday to ram through the changes.

Labor will need the crucial support of the Greens and one more Senate crossbencher.

Parliament to be recalled next week to pass govt's $1.5 billion energy plan

Greens leader Adam Bandt lashed proposed compensation to “greedy coal and gas corporations” who already have the resources contracted at the extremely high existing price.

The party has not yet formalised its position and will consider the legislation on Tuesday, but Mr Bandt said the Greens would push for greater household subsidies and a super profits windfall tax.

Senator David Pocock has also not confirmed his position but said the proposed package did not address Australia’s exposure to “volatility” in the international fossil fuel market.

But the Coalition has explicitly refused to back in the changes.

“I doubt very much my colleagues are going to stand by and have the Australian economy ruined by a government that cannot explain this package, has not modelled this package and has no implementation plan for this package,” Mr O’Brien said.

Earlier on Sunday, Energy Minister Chris Bowen accused Mr O’Brien of being content with the resources companies raking in massive profits on the back of “wartime prices” while Australians were suffering through extremely energy bills.

Mr Bowen asked why it was “okay for gas companies to charge above the odds” as he claimed the opposition had no alternative solution.

“What’s their plan? Would they stand aside and do absolutely nothing? They continue to blame renewables and lie,” Mr Bowen told Sky News Australia.

“But what would they do on Thursday to reduce power prices over the next 12 months?

“They’ve got no plan, no clue, they think it’s just fine to let gas companies do whatever they want.”

Mr O’Brien hit back at the Energy Minister and said there was not a “difference in opinion” over the need to ease energy price pressure for businesses and households.

He continued that the government’s approach had “already failed” by attempting to limit supply of fossil fuels and urgently transition to renewables.

“(The government’s) plan to decarbonise the Australian economy is leading to in fact a decapitating of the Australian economy,” he said.

As part of the package the Commonwealth will provide up to $1.5 billion of support to households and businesses which will be paid through state governments by directly reducing people’s bills.

The relief measures are targeted at households receiving income support, pensioners and Commonwealth Seniors Card holders, Family Tax Benefit recipients and small business customers of electricity retailers. 

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