Some of the biggest energy & business groups in Australia have reportedly come together in an effort to urge the Australian government to forgo its Big Stick approach in the matter of energy legislation.
Apparently, the businesses are warning the government that the divestiture powers it craves would act as a significant obstacle that would impede future investment and also create a sovereign risk.
According to a report by Xinhua News Agency, the policy, which was developed by the Prime Minister of Australia, Scott Morrison, as well as Australia’s Energy Minister, Angus Taylor, would grant the nation’s Treasurer the power to be able to break up Australia’s energy firms if it was discovered that a company has engaged in the practice of price gouging.
The proposal, reportedly tagged as an extreme measure by Australia’s energy sector, has already sent waves across the Coalition party room with dissenters becoming quite uncomfortable of the policy that is capable of such a drastic market intervention.
Reports claim that the move has prompted the Business Council of Australia, Australian Energy Council, the Australian Industry Group and others to unite and appeal to the Australian government to ditch its plans as it would, according to the group, specifically discourage severely needed investment in Australia’s energy sector.
The group, in an open letter addressed to the government, stated that the signatories of the statement are strongly opposed to the government’s policy that grants the Treasurer unilateral divestment powers, as such quasi-judicial & discretionary powers represent a genuine & deep sovereign risk. The letter further reads, that these powers are grossly inconsistent with the best practice for Australia’s modern economy and were also considered & rejected by the Harper competition policy review as well as the Australian Competition and consumer commission (ACCC).
These powers, if enacted would reportedly cast a pall over potential investments in all sections of the Australian economy, threatening the economic attractiveness of a nation that is highly dependent on foreign investment.