Source: The Conversation (Au and NZ) – By Michelle Grattan, Professorial Fellow, University of Canberra

If anyone needs further evidence of the self-defeating weird places the Liberals seem to find themselves in, consider what happened on Tuesday.

Malcolm Turnbull made another intervention in the political debate, this time talking about the National Energy Guarantee, when he spoke at an energy conference on Tuesday morning.

“I’ve strongly encouraged my colleagues to work together to revive the National Energy Guarantee. It was a vital piece of economic policy and had strong support, and none stronger I might say, than that of the current Prime Minister and the current Treasurer,” he said.

This and the rest of Turnbull’s observations on energy policy provided abundant material for a question time attack by a Labor party bloated from dining on the unending manna that’s been flowing its way from some political heaven.

As Morrison sought to counter this latest attack by concentrating on Labor’s substantial emissions reduction target (45% on 2005 levels by 2030), suddenly a tweet appeared from Turnbull.

“I have not endorsed “Labor’s energy policy”. They have adopted the NEG mechanism,“ Turnbull said – adding a tick of approval – “but have not demonstrated that their 45% emissions reduction target will not push up prices. I encouraged all parties to stick with Coalition’s NEG which retains wide community support.”

Here was the former PM effectively inserting himself into Question Time – in real time.

Morrison quickly quoted from the tweet, but it couldn’t repair the damage done by Turnbull’s earlier comments.

All round, it was another difficult day for the government on the energy front.

The Coalition parties meeting discussed its controversial plan providing for divestiture when energy companies misuse market power, with conduct that is “fraudulent, dishonest or in bad faith” in the wholesale market.

The government has put more constraints on its plan than originally envisaged. Notably, rather than a divestiture decision resting with the treasurer, it would lie with the federal court (although precisely what this would mean is somewhat unclear).

Frydenberg told a news conference: “This power will be on the advice of the ACCC [the Australian Competition and Consumer Commission] to the Treasurer, and then the Treasurer will make a referral to the Federal Court. The Federal Court will then be empowered to make that judicial order.”

There had already been backbench criticisms expressed to Treasurer Josh Frydenberg last week; the changes dealt with some of these.

But the plan is still leaving some in Coalition ranks uneasy.

According to the official government version, in the party room 18 speakers had a say, with 14 supporting (though a couple of them were concerned about the interventionism involved) and four expressing varying degrees of reservation. No one threatened to cross the floor.

Backbench sources said the strongest critics were Jason Falinski, Russell Broadbent, Tim Wilson and former deputy leader Julie Bishop, while milder criticisms came from Craig Laundy, Scott Ryan and Jane Prentice.

There were two main worries about the measure – the potential negative impact on business investment and its inconsistency with Liberal party free market principles.

Bishop – who, it might be recalled, was recently saying there should be a bipartisan deal with Labor on the NEG – highlighted the investment implications and the issue of sovereign risk.

She said: “This is not orthodox Liberal policy. We need to do more consultation with the industry and we need to be cautious of unintended consequences of forced divestiture”.

Addressing the concerns, Morrison told the party room that a variety of principles were at play.

The energy sector was not “a free market nirvana” but rather “a bastardised market,” he said. The law was targeted at situations where sweetheart deals came at the expense of consumers.

Energy minister Angus Taylor said governments of the centre-right, including the Menzies and the Thatcher governments, had acted to ensure markets operated for consumers.

Taylor invoked an example of the beer drinkers against the brewers, when Thatcher had been on the side of the beers drinkers.

Frydenberg produced a quote from Menzies’ “Forgotten People” broadcasts about the need to balance the requirements of industry with social responsibilities.

The legislation, which is opposed by Labor even with the changes, is being introduced this week. But there is no guarantee that it can be passed by the time of the election – not least because there are so few sitting days next year.

So the most controversial part of the government’s “big stick”, which has caused so much angst with business, may never become a reality.

ref. View from The Hill: Malcolm Turnbull and his NEG continue to haunt the government – http://theconversation.com/view-from-the-hill-malcolm-turnbull-and-his-neg-continue-to-haunt-the-government-108200

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