States revolt over Anthony Albanese’s plan for coal price caps

Feeling the heat on energy … Anthony Albanese during question time in the House of Representatives on Wednesday. Picture: Martin Ollman

• Exclusive

  By SIMON BENSON

  Political Editor

  and GEOFF CHAMBERS

  Chief Political Correspondent

  
  
• 10:00PM November 30, 2022
• 
  

Anthony Albanese’s national plan to lower energy prices is under threat amid an eleventh-hour request for the NSW and Queensland governments to impose their own domestic coal price caps, in a move that would avoid the commonwealth having to pay tens of billions of dollars in compensation to producers.

The Albanese government gave the two state governments an initial briefing this week on its plan to bring down energy prices, requesting they impose their own price caps on coal.

The NSW government is understood to have received legal advice from the crown solicitor that, under the Constitution, the commonwealth could legally set its own national price cap on coal but would need to compensate coal producers.

The legal advice stated that the commonwealth could implement a coal price cap itself on the condition it pay compensation on “just terms”. To lower the price enough for consumers to receive a tangible benefit, it is estimated that tens of billions of dollars in compensation would need to be paid.

Ahead of next Wednesday’s national cabinet meeting, where leaders will discuss the final plan, the Albanese government appears to be seeking to use a loophole in Queensland and NSW laws that doesn’t require compensation to be paid if the states imposed the caps themselves.

The Australian understands the NSW government is unlikely to sign up to any commonwealth deal requiring the states to impose caps without discussions over what compensation the federal government would provide. So far little detail is understood to have been provided.

The pushback from NSW comes after Queensland Premier Annastacia Palaszczuk on Tuesday fired a shot across the bow of the Albanese government, publicly rejecting a price cap on coal.