Poorly considered market interventions: an inefficient path to lower power prices

by Tony Wood and Guy Dundas

Australians want cheaper power, and they welcome governments taking on the big power companies to deliver that result. But hasty government intervention risks making things worse rather than better. In this submission to a Senate committee, Grattan Institute’s Energy Program Director Tony Wood and Fellow Guy Dundas warn that a short-term ‘company bashing’ approach may well prove counter-productive. In particular, the Federal Government’s Treasury Laws Amendment (Prohibiting Energy Market Misconduct) Bill 2018, although designed to prohibit misconduct in the electricity market that contributes to high consumer prices, focuses on issues that are not obviously driving high prices, or problems for which there are better solutions. As a result, the proposed legislation will not deliver significant cost savings.