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2022
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
TREASURY LAWS AMENDMENT (ENERGY PRICE RELIEF PLAN) BILL 2022
EXPLANATORY MEMORANDUM
(Circulated by authority of the Treasurer, the Hon Jim Chalmers MP)
Table of Contents
Glossary.................................................................................................. ii
General outline and financial impact ...................................................... 3
Gas market .................................................................. 5
Temporary and targeted energy bill relief .................. 45
Statement of Compatibility with Human Rights .......... 49
Glossary
This Explanatory Memorandum uses the following abbreviations and acronyms.
Abbreviation Definition
ACCC Australian Competition and Consumer
Commission
ACL Australian Consumer Law as set out in
Schedule 2 to the Competition and
Consumer Act 2010
AIA Acts Interpretation Act 1901
Bill Treasury Laws Amendment (Energy
Price Relief Plan) Bill 2022
CCA Competition and Consumer Act 2010
Criminal Law Guide A Guide to Framing Commonwealth
Offences, Infringement Notices and
Enforcement Powers (Attorney
General's Department, September 2011)
FFR Act Federal Financial Relations Act 2009
Legislation Act Legislation Act 2003
Regulatory Powers Act Regulatory Powers (Standard
Provisions) Act 2014
Voluntary Code of Conduct Voluntary Code of Conduct for the
Negotiation and Development of Gas
Supply Agreements Between Gas
Suppliers and Gas Customers in
Australia, dated 8 August 2022,
contained in Annex C of the Heads of
Agreement: The Australian East Coast
Domestic Gas Supply Commitment1
1
https://www.industry.gov.au/sites/default/files/2022-
09/heads_of_agreement_the_australian_east_coast_domestic_gas_supply_commitment.pdf
Treasury Laws Amendment (Energy Price Relief Plan) Bill 2022
General outline and financial impact
Schedule 1--Gas market
Outline
Schedule 1 to the Bill establishes a new legislative framework to enhance the welfare
of Australians through the regulation of the Australian gas market, and in particular,
limitation of increases in gas prices.
Date of effect
Schedule 1 to the Bill commences on the day after Royal Assent.
Financial impact
Nil.
Human rights implications
Schedule 1 to the Bill raises human rights issues. To the extent that Schedule 1 to the
Bill engages with human rights it is compatible as any limitations are reasonable,
necessary and proportionate. See Statement of Compatibility with Human Rights--
Chapter 3.
Compliance cost impact
Schedule 1 to the Bill has a negligible compliance cost.
Schedule 2--Temporary and targeted energy
bill relief
Outline
Schedule 2 to the Bill amends the FFR Act to introduce a new type of payment to the
States and Territories to support temporary and targeted relief on energy bills for
eligible households and small businesses.
3
General outline and financial impact
Date of effect
Schedule 2 to the Bill commences on the day after Royal Assent.
Proposal announced
Schedule 2 to the Bill partially implements the Targeted Energy Bill Assistance
announced on 9 December 2022.
Financial impact
Schedule 2 to the Bill will lead to total additional expenditure of $1.5 billion in relation
to the 2022-23 and 2023-24 financial years.
Human rights implications
Schedule 2 to the Bill is compatible with human rights. See Statement of Compatibility
with Human Rights--Chapter 3.
Compliance cost impact
Schedule 2 to the Bill has a negligible compliance cost.
Gas market
Table of Contents:
Outline of chapter .................................................................................. 5
Context of amendments ......................................................................... 5
Summary of new law.............................................................................. 7
Detailed explanation of new law ............................................................ 8
Preliminary ...................................................................................... 8
Gas market instruments .................................................................. 9
Compliance ................................................................................... 25
Investigation powers...................................................................... 35
Other matters ................................................................................ 38
Consequential amendments ................................................................ 43
Amendments relating to enforcement and compliance.................. 43
Commencement, application, and transitional provisions .................... 44
Outline of chapter
1.1 Schedule 1 to the Bill amends the CCA to establish a new legislative
framework to enhance the welfare of Australians through the regulation of the
Australian gas market, and in particular, limitation of increases in gas prices
caused by disruptions in global energy markets.
1.2 All references in this Chapter are to the CCA unless otherwise stated.
Context of amendments
1.3 The Government is committed to reducing the impact of the global energy
shock on Australian households and businesses caused by Russia's invasion of
Ukraine. Over the course of 2022, the war in Ukraine has resulted in
significant volatility and record prices for gas on international markets. The
5
Gas market
current energy crisis was unforeseen and its economic impact on Australia is
severe.
1.4 Due to the links between the domestic gas market and export markets, wartime
prices for gas are driving high wholesale gas prices in Australia that affect
domestic customers and the wider economy. Energy price shocks affect
economic activity through a variety of direct and indirect channels, including
inflation and cost of living pressures. As a result, Australian households and
businesses (including manufacturers and commercial enterprises) are paying
significantly more for energy and energy-intensive goods and services.
1.5 As an emergency measure to address the current energy crisis, the Government
intends to implement a temporary price cap through a gas market emergency
price order. The gas market emergency price order would apply to
uncontracted gas offered on the wholesale market from currently operational
fields capable of supply during the period in which the order is in force. This
measure is intended to ensure that wholesale gas is offered at prices that are
affordable for domestic customers while still maintaining a reasonable return
for suppliers and maintaining incentives for future investment in the Australian
gas market.
1.6 The Government is also addressing longer-term issues in the wholesale gas
market to ensure that there is a reliable and affordable supply of gas to the
domestic market. Schedule 1 to the Bill allows mandatory codes (known as gas
market codes) to be made to regulate conduct in relation to the supply and
acquisition of gas. The Government intends to implement a gas market code in
relation to wholesale gas to address bargaining power imbalances and systemic
issues which may limit buyers' ability to negotiate gas supply contracts on
reasonable terms.
1.7 The proposed gas market code for the wholesale gas market will be mandatory
and improve upon the current Voluntary Code of Conduct by strengthening
requirements related to transparency, reporting, pricing and timeframes for
negotiating. It is intended that the gas market code will include a reasonable
pricing framework and formal dispute resolution process, with binding
arbitration, for the resolution of pre-contractual disputes. While the gas market
code will place obligations on both suppliers and buyers, greater obligations
will be placed on suppliers to address imbalances in bargaining power in
current market conditions.
1.8 This measure, together with several measures announced in the October
2022-23 Budget, will strengthen the framework available to meet the
challenges that arise in energy markets. These Budget measures include a
package of reforms to modernise energy market regulation, increase
monitoring and oversight of gas markets, improve the functioning of the
Australian Domestic Gas Security Mechanism and an ACCC review of the
current industry-led Voluntary Code of Conduct for gas producers and
exporters.
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Treasury Laws Amendment (Energy Price Relief Plan) Bill 2022
Summary of new law
1.9 Schedule 1 to the Bill inserts Part IVBB into the CCA to create an overarching
framework to enable the Government to regulate the gas market. Two kinds of
legislative instruments will underpin the new framework; gas market codes and
gas market emergency price orders. These instruments are collectively referred
to as gas market instruments.
1.10 First, the Governor-General may, through regulations, make gas market codes.
Gas market codes may prescribe a broad range of matters relating to the supply
and acquisition of gas commodities, including:
• regulating dealings between persons who supply or acquire a gas
commodity, including negotiations between them; and
• dealing with and resolving disputes or complaints between persons who
supply or acquire a gas commodity.
1.11 Second, the Minister may make gas market emergency price orders regulating
the terms on which gas commodities are supplied or acquired, specifically
including price. A gas market emergency price order is designed to provide
short-term relief from the current energy crisis. The Minister's power to make
gas market emergency price orders sunsets 12 months after the commencement
of any order, or 12 months after commencement of the enabling provision in
Schedule 1 to the Bill if no order is made. The Minister must consult the
ACCC prior to making a gas market emergency price order, and an order is
automatically repealed after 12 months. Gas market emergency price orders
provide the basis for emergency price regulation of gas, primarily to reduce
domestic prices and address the current energy crisis.
1.12 Schedule 1 to the Bill includes a range of mechanisms that are aimed at
detecting, deterring and addressing non-compliance with Part IVBB and gas
market instruments. The ACCC has the power to require the production of
certain information and documents, investigate suspected non-compliance and
utilise a range of sanctions that are appropriate and proportionate to the
non-compliance.
1.13 The consequences of contravening relevant provisions of Part IVBB or a gas
market instrument include civil penalties, infringement notices, warning
notices and orders under Part VI.
1.14 Schedule 1 to the Bill prohibits avoidance schemes that are designed to avoid
the application of a civil penalty provision of a gas market instrument.
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Gas market
Detailed explanation of new law
Preliminary
Object and simplified outline
1.15 The object of Part IVBB is to enhance the welfare of Australians through the
regulation of the Australian gas market, and in particular, limitation of
increases in gas prices.
[Schedule 1, item 2, section 53]
1.16 As section 15AA of the AIA provides that statutes should be interpreted in
accordance with their objects, all other provisions in Part IVBB are to be read,
as far as is possible, as being designed to carry out its object.
1.17 The simplified outline of Part IVBB includes an outline of gas market codes
and gas market emergency price rules orders that may be made under Part
IVBB.
[Schedule 1, item 2, section 53A]
Gas market provision
1.18 Each of the following provisions is a 'gas market provision':
• a provision of Part IVBB;
• a provision of regulations made for the purposes of a provision of Part
IVBB (including a gas market code);
• a provision of a gas market emergency price order;
• another provision of the CCA to the extent that it relates to one of the above
provisions.
[Schedule 1, item 1, subsection 4(1) (definition of 'gas market provision')]
1.19 The term 'gas market provision' refers to all provisions that are in, or relate to,
Part IVBB as a whole. It is used in relation to constitutional application under
section 53ZZA and external territorial operation under section 53F among
other matters.
Gas commodity
1.20 A gas commodity means gas (including gas in a liquid state) or goods or
services relating to supplying or acquiring gas.
[Schedule 1, item 2, section 53B (definition of 'gas' and 'gas commodity')]
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Treasury Laws Amendment (Energy Price Relief Plan) Bill 2022
Gas market instruments
What are gas market instruments?
1.21 A gas market instrument is a gas market code or gas market emergency price
order. A gas market instrument may deal with the matters outlined below under
the heading 'What may a gas market instrument deal with?'.
[Schedule 1, item 1, subsection 4(1) (definition of 'gas market instrument')]
Gas market code
1.22 The Governor-General may make regulations prescribing matters required or
permitted by the CCA to be prescribed by a gas market code. Subdivision B of
Division 2 of Part IVBB sets out the key matters that a gas market code may
deal with. Subdivision D of Division 2 of Part IVBB also sets out incidental
matters that a gas market code may deal with.
[Schedule 1, item 1, subsection 4(1) (definition of 'gas market code'); item 2,
subsection 53L(1)]
1.23 The regulation-making power to make a gas market code does not limit the
general regulation-making power in section 172.
[Schedule 1, item 2, subsection 53L(2)]
Gas market emergency price orders
1.24 The Minister may, by legislative instrument, make a gas market emergency
price order. A gas market emergency price order may prescribe matters
required or permitted by the CCA to be prescribed by a gas market emergency
price order. Subdivision C of Division 2 of Part IVBB sets out key matters that
a gas market emergency price order may deal with. This primarily allows a gas
market emergency price order to regulate the terms (including prices) on which
gas is supplied or acquired. Subdivision D of Division 2 of Part IVBB also sets
out incidental matters that a gas market emergency price order may deal with.
[Schedule 1, item 1, subsection 4(1) (definition of 'gas market emergency
price order'); item 2, subsection 53M(1)]
1.25 If a gas market emergency price order is inconsistent with the regulations, the
order has no effect to the extent of the inconsistency. A gas market emergency
price order, however, is taken to be consistent with the regulations to the extent
that the order is capable of operating concurrently with the regulations.
[Schedule 1, item 2, subsection 53M(3)]
9
Gas market
What may a gas market instrument deal with?
Gas market code
1.26 Subdivision B of Division 2 of Part IVBB sets out matters that may be
prescribed in a gas market code.
Gas market code may regulate gas market conduct
1.27 A gas market code may include rules regulating (including prohibiting) gas
market conduct. This provision is not limited by other provisions that set out
matters that a gas market instrument may deal with.
[Schedule 1, item 2, sections 53B (definition of 'regulating'), 53P and 53ZF]
1.28 Schedule 1 to the Bill outlines specific conduct that is 'gas market conduct',
which may occur inside or outside Australia and relates to supplying or
acquiring a gas commodity, or to the potential supply of acquisition of a gas
commodity. Gas market conduct includes (but is not limited to) the following:
• supplying or acquiring a gas commodity;
• issuing or receiving an expression of interest in relation to supplying or
acquiring a gas commodity;
• responding to an expression of interest in relation to supplying or acquiring
a gas commodity, or receiving such an offer;
• offering, or responding to an offer, to supply or acquire a gas commodity;
• agreeing to supply or acquire a gas commodity;
• refusing to do anything mentioned above;
• operating a gas exchange;
• conduct prescribed by the regulations as 'gas market conduct'.
[Schedule 1, item 2, subsections 53C(1) and (4)]
1.29 The constitutional application of gas market provisions in relation to gas
market conduct is set out in section 53ZZA. Conduct has an extended meaning
given by subsection 4(2).
1.30 Conduct engaged in by the Minister, the ACCC or a member of the ACCC, or
the exercise of a power or performance of a function conferred by a gas market
provision, or conduct engaged in by a mediator or arbiter of a dispute between
gas market participants is not 'gas market conduct'.
[Schedule 1, item 2, subsections 53C(2) and (3)]
Gas market code may regulate gas market participants
1.31 A gas market code may regulate gas market participants. A 'gas market
participant' is any of the following:
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Treasury Laws Amendment (Energy Price Relief Plan) Bill 2022
• a person who engages, or is capable of engaging, in gas market conduct;
• a body corporate that is related (within the meaning of section 4A) to a
body corporate that is a gas market participant;
• any of the persons who carry on a joint venture if subparagraph 4J(a)(i)
applies to the joint venture, or the joint venture is, or includes, gas market
conduct;
• a person who has previously been a gas market participant in any of the
scenarios described above.
[Schedule 1, item 2, section 53B (definition of 'gas market participant') and
paragraphs 53D(1)(a) to (d)]
1.32 The regulations may also:
• provide that a person or body is a gas market participant, and
• provide that a person or body is not a gas market participant (including a
person or body mentioned above).
[Schedule 1, item 2, subsections 53D(2) and (3) and paragraph 53D(1)(e)]
Dealing, negotiating and reaching agreements
1.33 Schedule 1 to the Bill provides that a gas market code may outline obligations
for gas market participants when dealing, negotiating or reaching agreements
with other participants in a gas market. These obligations are designed to
ensure that there is a fair and transparent process for gas market participants
entering into commercial arrangements for the supply or acquisition of a gas
commodity.
Dealings
1.34 A gas market code may include rules in relation to a gas market participant
dealing with another participant, if the dealing is (or relates to) gas market
conduct. The rules may require a gas market participant to deal with other
participants in a specified manner, which includes dealing in good faith. The
rules may set out matters that must, may or must not be taken into account to
determine whether a gas market participant is dealing in good faith. A gas
market code may also include rules about the period within which a gas market
participant does something when dealing with another participant (including
responding to a request).
[Schedule 1, item 2, section 53Q]
Negotiations, expressions of interest and offers
1.35 A gas market code may include rules about negotiations relating to supplying
or acquiring a gas commodity, and expressions of interest and offers relating to
supplying or acquiring a gas commodity. This includes rules requiring a gas
market participant to make, or not to make, an expression of interest or an offer
in specified circumstances, and rules about any of the following matters:
11
Gas market
• the matters to which a gas market participant must have regard before
issuing an expression of interest or making an offer;
• the manner in which an expression of interest is issued, or an offer is made;
• information that is included in an expression of interest or an offer, or made
available in connection with an expression of interest or an offer (including
the manner in which the information is made available);
• the content of an expression of interest or an offer;
• the period during which an expression of interest or an offer is open;
• responding to an expression of interest or an offer;
• dealing with a response to an expression of interest or an offer (including by
providing information), making an offer or entering into an agreement;
• withdrawing an expression of interest or an offer.
[Schedule 1, item 2, subsection 53R]
1.36 An 'expression of interest' is a non-binding expression of interest or invitation
issued for the purpose of ascertaining whether a person is interested in
acquiring or supplying a gas commodity.
[Schedule 1, item 2, section 53B (definition of 'expression of interest')]
1.37 An 'offer' includes a counter-offer and a bid on a gas exchange.
[Schedule 1, item 2, section 53B (definition of 'offer')]
Agreements
1.38 A gas market code may include rules about agreements (including contracts)
relating to supplying or acquiring a gas commodity, including rules requiring a
gas market participant to enter, or not to enter, into an agreement in specified
circumstances, the manner in which an agreement is made, the matters dealt
with in an agreement and withdrawing from or ending an agreement.
[Schedule 1, item 2, section 53B (definition of 'agreement') and paragraphs
53S(1)(a) and (b)]
1.39 Matters in an agreement that may be dealt with in a gas matter code include:
• how much of the gas commodity to be supplied or acquired;
• flexibility of the volume of the gas commodity to be supplied or acquired;
• where or when the gas commodity is to be supplied or acquired;
• payment terms;
• a communication protocol for major interruptions to the supply of the gas
commodity;
• the period of the agreement;
• the consequences of a breach of the agreement;
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Treasury Laws Amendment (Energy Price Relief Plan) Bill 2022
• dispute resolution.
[Schedule 1, item 2, subparagraph 53S(1)(b)(ii) and subsection 53S(2)]
1.40 Further information on rules about terms (including terms relating to price) is
covered in paragraphs 1.41 to 1.45.
Terms and price
1.41 A gas market code may include rules about the terms on which a gas market
participant offers to supply or acquire, agrees to supply or acquire, or supplies
or acquires a gas commodity. This includes rules about how such terms are
expressed, fees payable in relation to an offer, agreement, supply or
acquisition, and terms specified in an expression of interest relating to supply
or acquiring a gas commodity.
[Schedule 1, item 2, section 53B (definition of 'price') and subsection
53T(1)]
1.42 A gas market code may include rules about the price at which a gas market
participant offers to supply or acquire, agrees to supply or acquire or supplies
or acquires a gas commodity. This includes setting a price, such as a maximum
price, minimum price, or maximum and minimum price. The rules may also
require a price to be reasonable and provide for matters that must, may or must
not be taken into account in determining whether a price is reasonable. The
rules may prescribe matters about determining a price (including matters to be
taken into account in determining a price) and how a price is expressed. In
setting a price, the rules may refer to the price of any gas commodity inside or
outside Australia or any published information about any market; or require a
price to be equal to the amount worked out by using a specified formula or
method.
[Schedule 1, item 2, subsections 53T(2) and 53ZE(3)]
1.43 A gas market code may require a gas market participant not to offer to supply
or acquire, or not to agree to supply or acquire or not to supply or acquire a gas
commodity if rules relating to terms and price are not complied with in relation
to the offer, agreement, supply or acquisition.
[Schedule 1, item 2, subsection 53T(3)]
1.44 A gas market code may confer on the Minister, the ACCC or any other person
or body the function of setting a price. Further information on powers in the
rules to give a person or body the function of determining a price is outlined
below at paragraphs 1.77 to 1.81.
[Schedule 1, item 2, subsection 53ZB]
1.45 It is intended that a gas market code will place obligations on both suppliers
and purchasers in the wholesale gas market to adhere to a reasonable price
framework and provide a pathway for binding dispute resolution in relation to
a reasonable price. Greater obligations will be placed on suppliers to address
imbalances in bargaining power in current market conditions.
13
Gas market
Regulating gas exchanges
1.46 A gas market code may include rules regulating (including prohibiting) the
operation of a gas exchange. A gas exchange is an exchange or other trading
system, platform or facility (including an electronic exchange, system,
platform or facility) on which:
• expressions of interest are issued, received or responded to;
• offers are made, received or responded to; or
• agreements are entered into;
• in relation to supplying or acquiring gas commodities.
[Schedule 1, item 2, sections 53B (definitions of 'regulating' and 'gas
exchange') and 53U]
Disputes and complaint resolution
1.47 Schedule 1 to the Bill provides a framework for gas market codes to deal with
complaints and disputes between gas market participants relating to gas market
conduct. This is intended to address the imbalance in bargaining power
between suppliers and purchasers of gas commodities.
Disputes
1.48 A gas market code may contain rules about disputes between gas market
participants relating to gas market conduct, including disputes or complaints
arising under, or in relation to, a gas market code. A code may also contain
rules about disputes arising during negotiations between gas market
participants relating to gas market conduct including disputes relating to a
prospective agreement between participants or price disputes. A price dispute
is a dispute between gas market participants arising because the participants do
not agree to the terms (including terms relating to price) on which they are to
supply or acquire gas commodities to or from each other.
[Schedule 1, item 2, section 53B (definition of 'price dispute') and subsection
53V(1)]
1.49 A gas market code may include rules requiring a gas market participant to have
internal or external dispute resolution processes for disputes between
participants relating to gas market conduct and require those processes to meet
specified criteria.
[Schedule 1, item 2, subsection 53V(2)]
Complaints to Minister or ACCC
1.50 A gas market code may provide for a gas market participant to make
complaints to the Minister or ACCC about a contravention of a gas market
instrument or dispute between participants. The rules in a code may set out the
manner in which such complaints are made and how the Minister or ACCC
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Treasury Laws Amendment (Energy Price Relief Plan) Bill 2022
deals with them.
[Schedule 1, item 2, subsection 53V(3)]
Mediation and Arbitration
1.51 Schedule 1 to the Bill provides a framework for mediation and arbitration
between gas market participants relating to gas market conduct. This is
intended to ensure the imbalance in bargaining power between suppliers and
purchasers of gas commodities can be addressed, whilst providing the basis for
efficient and binding resolution of pre-contractual disputes.
Mediation
1.52 A gas market code may provide for the mediation of disputes between gas
market participants relating to gas market conduct. To ensure that mediation of
disputes is fit-for-purpose, Schedule 1 to the Bill outlines a non-exhaustive list
of matters that may be covered in a code in relation to mediation.
[Schedule 1, item 2, subsection 53W(1)]
1.53 A gas market code may determine that mediation is compulsory and provide
for consequences of not participating in mediation. The powers and functions
of a mediator and process for appointing a mediator may be set out in a code.
[Schedule 1, item 2, paragraphs 53W(1)(a), (b), (e) and (f)]
1.54 A gas market code may establish a process for commencing mediation, and the
mediation process more broadly, including rules about a party giving
information to another party (including on request) or a mediator and
terminating a mediation. A gas market code may also provide an express
requirement for a mediator to provide a party with an opportunity to be heard.
[Schedule 1, item 2, paragraphs 53W(1)(c) and (d)]
1.55 A gas market code may provide for administrative matters related to mediation
including reporting, generating and keeping records, confidentiality and the
costs of mediation (including determining costs or liability for paying costs).
[Schedule 1, item 2, paragraphs 53W(1)(g) to (j)]
Arbitration
1.56 A gas market code may provide for the arbitration of disputes between gas
market participants relating to gas market conduct. To ensure that arbitration of
disputes is fit-for-purpose, Schedule 1 to the Bill specifies a non-exhaustive list
of matters that may be covered in a code in relation to arbitration.
[Schedule 1, item 2, subsection 53W(2)]
1.57 A gas market code may determine that arbitration is compulsory and how the
decisions of an arbiter bind a party to an arbitration. A code may also provide
for consequences of not participating in an arbitration or not complying with a
decision of an arbiter.
[Schedule 1, item 2, paragraphs 53W(2)(f), (g), (k) and (l)]
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Gas market
1.58 A gas market code may set out the powers and functions of an arbiter and
decision-making by an arbiter, including decision-making processes. This
could include a requirement for an arbiter to adhere to price guidelines set by
experts. The powers or functions conferred on an arbiter by a code must not
involve the exercise of judicial power.
[Schedule 1, item 1, subsection 4(1) (definition of 'judicial power'); item 2,
paragraphs 53W(2)(c) and (h) and subsection 53W(3)]
1.59 A gas market code may give an arbiter the power to decide that a party to a
dispute relating to gas market conduct must supply a gas commodity and
provides that, if an arbiter does so, the arbiter may also decide any of the
following matters:
• how much of the gas commodity is to be supplied;
• where the gas commodity is to be supplied;
• when the gas commodity is to be supplied;
• the terms (including terms relating to price) on which the gas commodity is
to be supplied.
[Schedule 1, item 2, paragraphs 53W(2)(i) and (j)]
1.60 This is necessary as binding arbitration is intended to be a key feature of a gas
market code. For example, a gas market code may require a gas market
participant to comply with a binding decision of an arbiter to supply a gas
commodity to another participant on certain terms, in circumstances where a
pre-contractual dispute cannot be efficiently resolved.
1.61 A gas market code may also establish a process for commencing arbitration,
including rules requiring a party to a dispute to take reasonable steps (such as
mediation) to resolve a dispute before proceeding to arbitration, and
terminating an arbitration. The rules may also provide for how a party gives
information to another party or to an arbiter (including on request). The rules
may provide an express requirement for an arbiter to provide a party with an
opportunity to be heard.
[Schedule 1, item 2, paragraphs 53W(2)(d) and (e)]
1.62 A gas market code may provide for administrative matters related to arbitration
including the process for appointing an arbiter, establishing or maintaining a
register of arbiters, reporting, generating and keeping records, confidentiality
and the costs of arbitration (including determining costs or liability for paying
costs).
[Schedule 1, item 2, paragraphs 53W(2)(a) and (b) and (m) to (p)]
Gas market emergency price instrument
1.63 Subdivision C of Division 2 of Part IVBB sets out matters that may be dealt
with in a gas market emergency price instrument.
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Treasury Laws Amendment (Energy Price Relief Plan) Bill 2022
Terms and price
1.64 A gas market emergency price order may include rules about the terms on
which a gas market participant offers to supply or acquire, agrees to supply or
acquire, or supplies or acquires a gas commodity. This includes rules about
how such terms are expressed, fees payable in relation to an offer, agreement,
supply or acquisition, and terms specified in an expression of interest relating
to supplying or acquiring a gas commodity.
[Schedule 1, item 2, section 53B (definition of 'price') and subsection
53X(1)]
1.65 A gas market emergency price order may include rules about the price at which
a gas market participant offers to supply or acquire, agrees to supply or acquire
or supplies or acquires a gas commodity. This includes setting a price, such as
a maximum price, minimum price, or maximum and minimum price. The rules
may also require a price to be reasonable and provide for matters that must,
may or must not be taken into account in determining whether a price is
reasonable. The rules may prescribe matters about determining a price
(including matters to be taken into account in determining a price) and how a
price is expressed. In setting a price, the rules may refer to the price of any gas
commodity inside or outside Australia or any published information about any
market; or require a price to be equal to the amount worked out by using a
specified formula or method.
[Schedule 1, item 2, subsections 53X(2)and 53ZE(3)]
1.66 A gas market emergency price order may confer on the Minister, the ACCC or
any other person or body the function of setting a price. Further information on
powers in the rules to give a person or body the function of determining a price
is outlined below at paragraphs 1.77 to 1.81.
[Schedule 1, item 2, subsection 53ZB]
1.67 A gas market emergency price order may require a gas market participant not
to offer to supply or acquire, or not to agree to supply or acquire or not to
supply or acquire a gas commodity if rules relating to terms and price are not
complied with in relation to the offer, agreement, supply or acquisition.
[Schedule 1, item 2, subsection 53X(3)]
1.68 Matters relating to price are central to gas market emergency price orders, as
they are designed to provide the basis for emergency price regulation of gas,
primarily to reduce domestic prices and address the current energy crisis.
Regulating gas exchanges
1.69 A gas market emergency price order may include rules regulating (including
prohibiting) the operation of a gas exchange. A gas exchange is an exchange or
other trading system, platform or facility (including an electronic exchange,
system, platform or facility) on which:
• expressions of interest are issued, received or responded to;
• offers are made, received or responded to; or
17
Gas market
• agreements are entered into;
in relation to supplying or acquiring gas commodities.
[Schedule 1, item 2, sections 53B (definitions of 'regulating' and 'gas
exchange') and 53Y]
Incidental matters - gas market code and gas market emergency price
order
1.70 Subdivision D of Division 2 of Part IVBB sets out incidental matters that may
be prescribed in a gas market instrument (that is, a gas market code or gas
market emergency price order).
Transparency
1.71 A gas market instrument may include rules about gas market participants, the
Minister or the ACCC publishing information that relates to a gas market
matter, including about the type of information and the circumstances and
manner of publication. For example, a rule may require certain information to
be published periodically.
[Schedule 1, item 2, subsection 53Z(1)]
1.72 The rules in an instrument may require a gas market participant to give another
participant information or documents relevant to a gas market matter.
[Schedule 1, item 2, subsection 53Z(2)]
1.73 A gas market matter includes:
• gas market conduct;
• the operation, application or administration of a gas market instrument;
• compliance (including non-compliance) with a gas market instrument;
• a failure to supply a gas commodity; or
• a matter prescribed by the regulations as being or not being a gas market
matter.
[Schedule 1, item 2, section 53B (definition of 'gas market matter')]
Reporting, record keeping and auditing
1.74 A gas market instrument may include rules about reporting, generating and
keeping records or auditing in relation to a gas market matter.
[Schedule 1, item 2, subsection 53ZA(1)]
1.75 The rules in an instrument may require a gas market participant to give
financial or other reports, records or documents, or information, relating to a
gas market matter to the Minister or ACCC, including requiring such reports,
records, documents or information to be given periodically or on request.
[Schedule 1, item 2, subsection 53ZA(2)]
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Treasury Laws Amendment (Energy Price Relief Plan) Bill 2022
1.76 The rules in an instrument may also require a gas market participant to report
to the Minister or the ACCC the occurrence of a specified event relating to a
gas market matter or a price dispute and give to the Minister or the ACCC
specified information about that event.
[Schedule 1, item 2, subsection 53ZA(3)]
Conferral of powers or functions on a person or body
1.77 A gas market instrument may confer on a person or body a power to do, or
function of doing, any of the following:
• monitoring compliance with a gas market instrument;
• conducting investigations under, or in relation to a gas market matter;
• providing exemptions from a gas market instrument or a specified provision
of, or specified rule included in, a gas market instrument;
• reviewing or reporting on, the operation, application or administration of a
gas market instrument or activities under or in relation to a gas market
instrument;
• reviewing a decision under a gas market instrument, or in the exercise or
performance of a power or function conferred by a gas market instrument.
[Schedule 1, item 2, subsection 53ZB(1)]
1.78 A gas market code or gas market emergency price order may confer on a
person or body any of the following powers or functions:
• a power to determine, or a function of determining, any matters that made
be dealt with by a code or an order respectively;
• a power or function relating to the operation, application or administration
of a code or an order respectively.
[Schedule 1, item 2, subsections 53ZB(2) and (3)]
1.79 If a gas market code or a gas market emergency price order confers these
powers or functions, the code or order may provide that the power is to be
exercised, or the functioned performed, by legislative instrument, notifiable
instrument or other kind of written instrument. The power or function may be
delegated subject to the limitations discussed below.
[Schedule 1, item 2, subsections 53ZB(4) and (5)]
1.80 If a gas market instrument confers a power to make a legislative instrument,
the instrument-making power can only be conferred on a Minister, the ACCC,
a member of the staff of the ACCC, an APS employee or certain
Commonwealth government entities.
[Schedule 1, item 2, subsection 53ZI(1)]
1.81 A gas market instrument must not confer a power to delegate a power to make
a legislative instrument.
[Schedule 1, item 2, subsection 53ZI(2)]
19
Gas market
Fees
1.82 A gas market instrument may provide for a fee to be charged for anything done
by or in relation to the Commonwealth, the ACCC or any other person or body
in relation to a gas market instrument, including in the exercise of a power or
the performance of a function conferred by a gas market instrument. Such a fee
must not be such as to amount to taxation.
[Schedule 1, item 2, subsection 53ZC(1) and section 53ZH]
1.83 An instrument may provide for the amount of the fee (including a method to
work out the amount of the fee), who is liable to pay the fee, the consequences
of not paying the fee, when the fee becomes due and payable, and waiving or
refunding of a fee.
[Schedule 1, item 2, subsection 53ZC(2)]
Incidental or related matters
1.84 A gas market instrument may include rules on any of the following matters:
• rules about circumstances in which persons are, or may be, relieved from
complying with the requirements in a gas market instrument that would
otherwise apply to them;
• if a gas market instrument requires information or a document to be given
or published--exceptions to that requirement, including exceptions when
publishing the information would prejudice the commercial interests of a
person, or publishing the information is not in the public interest, or the
circumstances involve personal information;
• rules about the use, disclosure or publication or information or a document
by a person to whom the information or document is given under a gas
market instrument;
• rules about the manner or form in which persons or bodies may exercise
powers or perform functions conferred by a gas market instrument or must
comply with requirements of a gas market instrument (including requiring
use of a form approved by the Minister, the ACCC or another person or
body);
• rules providing for internal or external review of a decision made under a
gas market instrument, or in the exercise or performance of a power or
function conferred by a gas market instrument, including review by the
Australian Competition Tribunal or the Administrative Appeals Tribunal;
• rules requiring agents of a gas market participant to do or not to do
specified things when, within the agent's actual or apparent authority, the
agent is engaging in gas market conduct on behalf of the gas market
participant or otherwise acting on behalf of the participant in relation to gas
market conduct;
20
Treasury Laws Amendment (Energy Price Relief Plan) Bill 2022
• rules providing that, in specified circumstances, a partner in a partnership is
taken to contravene a specified provision of a gas market instrument if
another partner in the partnership contravenes that provision;
• rules providing that, in specified circumstances, a person who carries on a
joint venture is taken to contravene a specified provision of a gas market
instrument if another person who carries on the joint venture contravenes
that provision.
[Schedule 1, item 2, subsection 53ZD(1)]
1.85 A gas market code or gas market emergency price order may deal with matters
incidental or related to any matter that is or may be included in, or dealt with
by, a code or an order respectively. A gas market code or gas market
emergency price order may also deal with transitional matters related to the
making of a code or an order. A gas market code may include transitional
matters relating to the repeal of a gas market emergency price order.
[Schedule 1, item 2, subsections 53ZD(2) and (3)]
1.86 A gas market instrument may make provision in relation to any matter in a way
that depends on a person being satisfied of one or more specified matters.
[Schedule 1, item 2, subsection 53ZD(4)]
Incorporation by reference
1.87 Legislative instruments made under Part IVBB will deal with technical matters
related to the gas market. This may include the price of gas commodities on
domestic and international markets, which is likely to change at regular
intervals, and technical standards, procedures and processes related to the
supply or acquisition of gas commodities. For this reason, it is necessary for
these instruments to refer to other documents so that the framework is flexible
and able to adapt to changing market conditions.
1.88 Schedule 1 to the Bill provides that a gas market code, gas market emergency
price order and regulations made under Part IVBB (other than a gas market
code) may apply, adopt or incorporate (with or without modification) any
matter contained in any other instrument or writing as in force or existing at a
particular time or from time to time. Schedule 1 to the Bill disapplies
subsection 14(2) of the Legislation Act, which ordinarily restricts the ability of
a legislative or notifiable instrument to incorporate material as in force or
existing from time to time.
[Schedule 1, item 2, subsections 53ZE(1) and (2) and section 53ZZC]
1.89 A gas market instrument may refer to the price of a gas commodity or other
goods or services anywhere inside or outside Australia, or any published
information about any market whether inside or outside Australia. An
instrument may also refer to or provide a formula or method. A reference may
be made to any of these matters for the purpose of setting a price for a gas
commodity.
[Schedule 1, item 2, subsection 53ZE(3)]
21
Gas market
1.90 Additionally, in order to comply with paragraph 15J(2)(c) of the Legislation
Act, the explanatory statements for the instruments must contain a description
of the relevant incorporated material and indicate how it may be obtained.
While it is not known precisely what material may be necessary to incorporate
into regulations, it is intended that any external material incorporated by
reference, as existing from time to time, will be freely available, where
possible, and that the relevant explanatory material for regulations in those
circumstances will provide clear information about the document and how it
may be obtained.
Safeguards on gas market instruments
1.91 Schedule 1 to the Bill places safeguards on the making of gas market
instruments to ensure that there is an appropriate delegation of legislative
power. This helps to maintain the rule of law and ensure appropriate
accountability.
Tabling and disallowance
1.92 A gas market code and a gas market emergency price order are legislative
instruments subject to tabling, disallowance and sunsetting under the
Legislation Act. This ensures that Parliament can exercise an appropriate level
of scrutiny and oversight over the instruments. Such instruments are also
subject to consultation requirements under the Legislation Act (in addition to
the specific consultation requirements provided for in Schedule 1 to the Bill).
[Schedule 1, item 2, subsections 53L(1) and 53M(1)]
Limits on content of delegated legislation
1.93 Schedule 1 to the Bill provides that a gas market emergency price order may
not deal with certain matters that are more appropriately enacted in primary
legislation. This includes the creation of offences, provision of coercive
powers, imposition of taxes, setting amounts to be appropriated from the
Consolidated Revenue Fund and direct amendments of the CCA. Regulations
making a gas market code would also not deal with these matters that are more
appropriately enacted in primary legislation, in the absence of a specific power
in the Act for the regulations to do so. These limitations are consistent with the
guidance of the Senate Standing Committee for the Scrutiny of Bills and
Senate Standing Committee for the Scrutiny of Delegated Legislation.
[Schedule 1, item 2, subsections 53L(1) and 53M(2)]
Sunsetting of gas market emergency price order
1.94 A gas market emergency price order is repealed 12 months after the earliest
time any provision of any gas market emergency price order commences,
provided that the relevant provision commences during the 12 months starting
on the commencement of Schedule 1 to the Bill. Otherwise, an order is
repealed 12 months after the commencement of Schedule 1 to the Bill. The
22
Treasury Laws Amendment (Energy Price Relief Plan) Bill 2022
Minister may not make a gas market emergency price order after the applicable
period.
[Schedule 1, item 2, subsections 53M(6) to (8)]
1.95 This short sunsetting period for a gas market emergency price order is
appropriate as this instrument is designed to provide short-term relief from the
current energy crisis.
Consultation before making gas market emergency price order
1.96 A gas market emergency price order may deal with technical or detailed
matters, many of which require expert advice from the ACCC to make the
relevant order and are likely to be subject to change on a regular basis. For this
reason, the Minister must consult with the ACCC before making a gas market
emergency price order. The consultation requirements for rule-makers in the
Legislation Act also apply to making a gas emergency price order and a gas
market code.
[Schedule 1, item 2, subsections 53M(4) and (5)]
Other matters relating to gas market instruments
Geographical application of gas market provisions
1.97 The gas market provisions extend to every external Territory and a reference in
those provisions to Australia is taken to include a reference to the external
Territories. The provisions also extend to acts, omissions, matters and things
outside of Australia.
[Schedule 1, item 2, sections 53B (definition of 'Australia'), 53E and 53F]
1.98 Division 14 (Standard geographical jurisdiction) of the Criminal Code
(Schedule to the Criminal Code Act 1995) does not apply in relation to an
offence against the gas market provisions. The extended geographical
application of the gas market provisions in relation to acts, omissions, matters
and things outside Australia, applies to the offences against those provisions.
[Schedule 1, item 2, section 53G]
1.99 The gas market provisions apply in relation to supplying a gas commodity if
the supply occurs in Australia, is to a person in Australia (including by means
of importing the gas commodity into Australia) or is by means of exporting the
gas commodity from Australia.
[Schedule 1, item 2, subsection 53H(1)]
1.100 The gas market provisions apply in relation to acquiring a gas commodity if
the acquisition occurs in Australia or is the result of a supply mentioned in
paragraph 1.99.
[Schedule 1, item 2, subsection 53H(2)]
23
Gas market
Application of gas market provisions to government entities
1.101 The gas market provisions bind the Crown in each of its capacities. That is, the
provisions bind the Crown in right of the Commonwealth, of each of the
States, of the Australian Capital Territory and of the Northern Territory.
However, the provisions do not make the Crown:
• liable to a pecuniary penalty or to be prosecuted for an offence;
• subject to a remedy under Part VI (about enforcement) other than
section 87B (about enforceable undertakings); or
• subject to the search and seizure provisions in Part XID.
[Schedule 1, item 2, subsections 53J(1) and (2)]
1.102 The gas market provisions apply to certain government entities as if the entity
were a person. The regulations may modify the way the gas market provisions
apply to government entities.
[Schedule 1, item 2, subsections 53K(1)]
1.103 The gas market provisions apply to an entity that:
• is part of the Commonwealth;
• is a Commonwealth entity (within the meaning of the Public Governance,
Performance and Accountability Act 2013);
• is a body (whether or not incorporated) established for a public purpose by
or under a law of the Commonwealth;
• is holding or performing the duties of an office established by or under a
law of the Commonwealth, or holding an appointment made under a law of
the Commonwealth; or
• is prescribed by the regulations.
[Schedule 1, item 2, subsection 53K(3)]
1.104 The gas market provisions apply to an entity that:
• is part of a State or Territory;
• is a body (whether or not incorporated) established for a public purpose by
or under a law of a State or Territory;
• is holding or performing the duties of an office established by or under a
law of a State or Territory, or holding an appointment made under a law of
a State or Territory;
• is prescribed by the regulations in relation to a State or Territory.
[Schedule 1, item 2, subsection 53K(4)]
1.105 A gas market instrument may limit the application of the instrument, a
provision of the instrument or a rule included in the instrument in relation to a
Commonwealth government entity or a State or Territory government entity.
[Schedule 1, item 2, subsection 53K(2)]
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Treasury Laws Amendment (Energy Price Relief Plan) Bill 2022
Treatment of States
1.106 Schedule 1 to the Bill provides that a gas market instrument must not give
preference to one State or any part of a State within the meaning of section 99
of the Constitution. A power or function conferred by a gas market instrument
must not be excised or performed in a way that would give such a preference.
[Schedule 1, item 2, section 53ZG]
Gas market instruments may limit application
1.107 A gas market instrument may limit its application (or that of a specified
provision of, or rule in, the instrument) such that the instrument, provision or
rule applies only in relation to supplying or acquiring specified gas
commodities.
[Schedule 1, item 2, subsection 53N(1)]
1.108 A gas market instrument may also limit its application (or that of a specified
provision of, or rule in, the instrument) such that the instrument, provision or
rule applies only in relation to parts of Australia in relation to which specified
requirements are met, or in relation to all parts of Australia other than those
parts in relation to which specified requirements are met, subject to the rule
that an instrument must not give preference to a State or part of a State.
[Schedule 1, item 2, subsections 53N(2) and (3)]
1.109 A gas market instrument may also provide that its application (or that of a
specified provision of, or rule in, the instrument) applies at a specified time,
during a specified period or on an ongoing basis. This provision does not limit
the operation of the provisions of the Legislation Act governing the automatic
repeal (sunsetting) of legislative instruments.
[Schedule 1, item 2, subsections 53N(4) and (5)]
1.110 The provisions that allow for limited application of a gas market instrument (or
that of a specified provision of, or rule in, the instrument) do not limit the
operation of subsection 33(3A) of the AIA (which allows an instrument to
make different provision with respect to different matters or different classes of
matter).
[Schedule 1, item 2, subsection 53N(6)]
1.111 Schedule 1 to the Bill provides that certain provisions do not limit each other.
[Schedule 1, item 2, section 53ZF]
Compliance
Civil penalties
1.112 Civil penalties apply to contraventions of specified provisions of Part IVBB
and a civil penalty provision (as defined in the Regulatory Powers Act) of a gas
market instrument. The civil penalty regime established in the CCA applies to
those contraventions.
25
Gas market
[Schedule 1, item 2, subsections 4(1) (definition of 'civil penalty provision of
a gas market instrument') and 53ZJ(1)]
1.113 A person involved in a contravention of Part IVBB or a civil penalty provision
of a gas market instrument includes a person who:
• has aided, abetted, counselled or procured the contravention;
• has induced, whether by threats or promises or otherwise, the
contravention;
• has been in any way, directly or indirectly, knowingly concerned in, or
party to, the contravention; or
• has conspired with others to effect the contravention.
[Schedule 1, items 8 and 9, subsection 75B(1)]
1.114 A court may order a person to pay a pecuniary penalty for a contravention. The
maximum pecuniary penalties are set out in the table below.
Table 1: Maximum pecuniary penalties for a body corporate and person
other than a body corporate
Item Provision Maximum pecuniary Maximum pecuniary
penalty for a body penalty for a person
corporate other than a body
corporate
1 Subsections 53ZQ(1), The greater of: $2,500,000
(2) or (3)--anti- (a) $50 million;
avoidance schemes;
(b) if the court can
or determine the value of
a civil penalty the benefit
provision of a gas obtained--three times
market instrument the value of that benefit;
(other than a civil and
penalty provision of a (c) if the court cannot
gas market instrument determine the value of
that sets out at its foot the benefit
a pecuniary penalty). obtained--30% of the
body corporate's
adjusted turnover during
the breach turnover
period for the offence,
act or omission.
2 Section 53ZV--false 3,000 penalty units 600 penalty units
or misleading
information;
26
Treasury Laws Amendment (Energy Price Relief Plan) Bill 2022
Item Provision Maximum pecuniary Maximum pecuniary
penalty for a body penalty for a person
corporate other than a body
corporate
or
subsection
53ZW(1)--compliance
with notices.
3 A civil penalty The lesser of: The lesser of:
provision of a gas (a) the amount of the (a) the amount of the
market instrument that pecuniary penalty for a pecuniary penalty for a
sets out at its foot a body corporate set out person other than a
pecuniary penalty at the foot of the body corporate set out
provision; and at the foot of the
(b) the greater of: provision; and
(i) $50 million; (b) $2,500,000.
(ii) if the court can
determine the value
of the benefit
obtained--three times
the value of that
benefit; and
(iii) if the court
cannot determine the
value of the benefit
obtained--30% of the
body corporate's
adjusted turnover
during the breach
turnover period for
the offence, act or
omission.
[Schedule 1, items 10 to 13, subparagraph 76(1)(a)(iab), subsections
76(1A) and 76(1B) and paragraph 76(1B)(c)]
1.115 Further detail on the justification for the civil penalty provisions in sections
53ZQ, 53ZV and 53ZW of Part IVBB are set out below (see paragraphs 1.158,
1.167 and 1.173).
Civil penalty of gas market instrument
1.116 A gas market instrument may specify that a civil penalty applies to breaches of
the rules. Where a civil penalty does apply to a breach of the rules, a gas
27
Gas market
market instrument may also specify a lower penalty amount than the default
maximum (see Table, item 3). If the rules do not specify an amount, then the
default maximum civil penalty for an individual is $2,500,000, while the
maximum for a body corporate is the greater of:
• $50 million;
• if the court can determine the value of the benefit obtained--three times the
value of that benefit; and
• if the court cannot determine the value of the benefit obtained--30% of the
body corporate's adjusted turnover during the breach turnover period for
the offence, act or omission (see Table, item 1).
1.117 This approach is necessary because gas market instruments are the key
mechanism through which the gas market is regulated, and the welfare of
Australians is protected. The maximum penalty available for breach of a civil
penalty provision of a gas market instrument aligns with the maximum penalty
for anti-competitive conduct and breaches of the ACL. The maximum penalty
reflects the potential consequences that contravening conduct could have on
other gas market participants and Australian consumers more broadly, and the
need for a strong deterrent to ensure compliance with the new framework. The
maximum penalty has been designed to provide an effective deterrent to
breaches of the law, whilst ensuring a penalty cannot be considered an
acceptable cost of doing business. It is expected that the maximum penalty
would only be made available if appropriate; otherwise, a lower penalty will be
prescribed for a civil penalty provision in a gas market instrument.
1.118 If an act or thing is required under a civil penalty provision of a gas market
instrument to be done within a particular period or before a particular time,
then the obligation to do that act or thing continues until the act or thing is
done. The obligation applies even if the period has expired or the time has
passed. A person commits a contravention of the relevant provision in respect
of each day during which the contravention occurs including the day that the
relevant order is made under subsection 76(1).
[Schedule 1, item 2, subsections 53ZJ(2) and (3)]
1.119 If a court considers that it is appropriate to order a person to pay a pecuniary
penalty due to a contravention of a gas market instrument, and also to pay
compensation to a person who has suffered loss or damage due to the
contravention, the court must preference an order for compensation if the
defendant does not have the financial resources to pay both the penalty and
compensation.
[Schedule 1, item 15, paragraph 79B(a)]
Infringement notices
1.120 The infringement notice regime in Division 5 of Part XI applies to certain
provisions of Part IVBB or a gas market instrument in the same way as it does
28
Treasury Laws Amendment (Energy Price Relief Plan) Bill 2022
to a provision of Part 2-2 of the ACL. Specifically, infringement notices may
be issued by the ACCC as an alternative to commencing proceedings in
relation to alleged contraventions of:
• the prohibition against entering into an avoidance scheme by a person,
constitutional corporation or a person in the course of constitutional trade or
commerce;
• the requirement to comply with a notice given to a person by the ACCC to
give information or produce a document;
• the prohibition against giving false or misleading information to the ACCC
in response to a notice to give information or produce a document; or
• a civil penalty provision of a gas market instrument (other than a provision
requiring a gas market participant to deal with another participant in good
faith).
[Schedule 1, item 2, subsections 53ZK(1) to (2)]
1.121 Infringement notices are an alternative to civil penalties. They allow the ACCC
to select from wider range of enforcement options to deter misconduct. This
approach is consistent with the Criminal Law Guide. If an infringement notice
is complied with, including payment of the penalty, no further action will be
taken against the person. The payment is not considered an admission of
criminal guilt. If an infringement notice is not complied with, the ACCC may
seek to enforce a civil penalty.
1.122 Schedule 1 to the Bill provides for a maximum of 600 penalty units for a body
corporate and 60 penalty units for a person that is not a body corporate in an
infringement notice. While this amount is higher than the maximum amount
recommended in the Criminal Law Guide, the higher amount is appropriate
and necessary in these circumstances given the significant possible financial
benefit that corporations stand to gain from potential breaches. An
infringement notice needs to deter large companies from non-compliance with
the provisions to which the infringement notice regime applies. The breach of
these provisions is likely to cause significant harm to Australian businesses and
consumers, and the functioning of the new gas market regime.
[Schedule 1, item 2, subsection 53ZK(3)]
1.123 It is appropriate that infringement notices are an available tool for use by the
ACCC in relation to contraventions against the prohibition against entering
into schemes for avoidance purposes because an infringement notice will
provide an efficient and timely means to deter and respond to non-compliance
and may assist in efficient and timely outcomes where there is an immediate
need for gas to be available at the required price in circumstances where, for
example, there is available evidence of an avoidance purpose or admission of a
contravention.
1.124 In relation to a failure to comply with a notice to provide information or
provision of false or misleading information in response to such a notice, an
infringement notice with higher penalties is appropriate because it is crucial for
29
Gas market
the ACCC to be able to access information in a timely way in order to prevent
avoidance behaviour or breaches of a civil penalty provision of a gas market
instrument. Higher penalties, in respect of infringement notices, are available
to the ACCC in relation to a failure to supply information relating to scheme
vehicles prepared by or for manufacturers for use in diagnosing faults, within a
certain period as contained in item 4 in the table in subsection 57GB(2).
1.125 Division 2 of Part XI is not intended to limit the application of section 53ZZA
(dealing with the constitutional support for Part IVBB) to the extended
application of Division 5 of Part XI, as described in section 53ZK.
[Schedule 1, item 2, subsection 53ZK(4)]
1.126 Division 5 of Part XI, and any other provision of the CCA that relates to that
Division, have no effect to the extent to which they would purport to confer
judicial power on the ACCC.
[Schedule 1, item 2, subsection 53ZK(5)]
Public warning notices
1.127 The ACCC may issue a public warning notice to a corporation for engaging in
prohibited conduct after providing the corporation with an opportunity to make
representations in relation to specified matters including the alleged conduct.
1.128 'Prohibited conduct' is conduct that contravenes the obligation to comply with
a notice, the prohibition on giving false or misleading information, or
producing documents that contain false or misleading information, in response
to a notice, or a civil penalty provision of a gas market instrument.]
[Schedule 1, item 2, section 53B (definition of 'prohibited conduct')]
Draft notice
1.129 The ACCC may give a person a draft public warning notice if it reasonably
believes that:
• the person has engaged, or is engaging, in conduct that contravenes a gas
market instrument (prohibited conduct);
• one or more persons has suffered, or will likely suffer, detriment due to the
prohibited conduct; and
• it is in the public interest to issue the notice.
[Schedule 1, item 2, subsection 53ZL(1)]
1.130 The notice must state the day on which it is given and identify the person who
has engaged, or is engaging, in the prohibited conduct and the particular
conduct. The notice must also explain the reasons why the ACCC holds a
reasonable belief in relation to the matters mentioned in paragraph 1.129.
[Schedule 1, item 2, paragraphs 53ZL(2)(a) to (c)]
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Treasury Laws Amendment (Energy Price Relief Plan) Bill 2022
1.131 The notice must also state that the person has 21 days to make representations
to the ACCC regarding the prohibited conduct, the detriment identified, and
whether it is in the public interest to publish the notice.
[Schedule 1, item 2, paragraph 53ZL(2)(d)]
1.132 A draft notice is not a legislative instrument within the meaning of subsection
8(1) of the Legislation Act.
[Schedule 1, item 2, subsection 53ZL(3)]
Final notice
1.133 The ACCC may issue a public warning notice if 21 days have passed after
issuing a draft notice and the ACCC still reasonably believes that:
• the person has engaged, or is engaging, in prohibited conduct;
• one or more persons has suffered, or will likely suffer, detriment due to the
prohibited conduct; and
• it is in the public interest to issue the notice.
[Schedule 1, item 2, subsections 53ZM(1) and (3)]
1.134 The ACCC cannot issue a public warning notice if more than 90 days have
passed since the ACCC gave the person the draft notice.
[Schedule 1, item 2, paragraph 53ZM(1)(c)]
1.135 The ACCC may issue a public warning notice without first issuing a draft
notice if it reasonably believes that:
• the person has engaged, or is engaging, in prohibited conduct;
• there is a significant risk of imminent, serious harm to the welfare of
Australians as a result of the prohibited conduct;
• it is reasonably necessary to issue a public warning notice without first
issuing a draft notice in order to prevent or reduce that harm or risk; and
• it is in the public interest to issue the notice.
[Schedule 1, item 2, subsections 53ZM(2) and (3)]
1.136 The public warning notice must state the date of issue and identify the person
and prohibited conduct.
[Schedule 1, item 2, subsection 53ZM(4)]
1.137 A public warning notice is not a legislative instrument within the meaning of
subsection 8(1) of the Legislation Act.
[Schedule 1, item 2, subsection 53ZM(5)]
Reasonable belief
1.138 The provisions require the ACCC to form a reasonable belief of the matters
detailed above. This is the standard 'reasonable belief' test that requires both
an objective and subjective assessment of the belief held.
31
Gas market
Defamation
1.139 No defamation proceedings may lie against the Commonwealth, the ACCC or
ACCC staff due to the issuing of a public warning notice.
[Schedule 1, item 2, section 53ZN]
Redress orders
1.140 The ACCC may apply to the court to seek redress for persons who are not
identified as a party to proceedings, to receive redress such as variation of a
contract.
1.141 If:
• a person has engaged in conduct that constitutes a contravention or related
contravention of a civil penalty provision of a gas market instrument;
• the contravening conduct caused, or is likely to cause, a class of persons
loss or damage; and
• the class includes persons who are not, or have not been, parties to a
proceeding instituted under Part VI in relation to the contravening conduct;
then any court with jurisdiction on the matter may make such orders as the
court thinks appropriate, on the application of the ACCC.
[Schedule 1, item 2, subsection 53ZO(1)]
1.142 A person engages in a related contravention of a civil penalty provision of a
gas market instrument if the person:
• aids, abets, counsels or procures another person to contravene the provision;
• induces, whether by threats or promises or otherwise, another person to
contravene the provision;
• is in any way, directly or indirectly, knowingly concerned in, or party to, a
contravention of the provision by another person; or
• conspires with others to effect a contravention of the provision.
[Schedule 1, item 2, section 53B (definition of 'related contravention') and
subsection 53ZO(9)]
1.143 Such an order may be against the person who engaged in the contravening
conduct or a person involved in the contravening conduct.
[Schedule 1, item 2, subsection 53ZO(2)]
1.144 The court may make all or any of the following orders:
• an order declaring the whole or part of a contract made between the
respondent and a non-party, or collateral arrangements relating to such a
contract, to be void and, if the court thinks fit, to have been void ab initio or
void at all times on and after such a date as specified in the order;
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Treasury Laws Amendment (Energy Price Relief Plan) Bill 2022
• an order varying a contract or arrangement and, if the court thinks fit,
declaring the contract or arrangement to have had effect as so varied on and
after such a date as is specified in the order;
• an order refusing to enforce any or all of the provisions of a contract or
arrangement;
• an order directing the respondent to refund money or return property to a
non-party;
• an order directing the respondent, at the respondent's own expense, to
supply specified services to a non-party.
[Schedule 1, item 2, section 53ZP]
1.145 The court must not make an order unless it considers that the order will
redress, in whole or in part, the lost or damage suffered by the non-parties in
relation to the contravening conduct, or prevent or reduce the loss or damage
suffered, or likely to be suffered, by the non-parties in relation to the
contravening conduct.
[Schedule 1, item 2, subsection 53ZO(3)]
1.146 The ACCC may apply for such an order at any time within 6 years after the
day on which the relevant cause of action accrues. The ACCC can make an
application even if it has not begun enforcement proceedings in relation to the
conduct.
[Schedule 1, item 2, subsections 53ZO(4) and (5)]
In determining whether to make an order, the court:
• may have regard to the conduct of the contravening person and the non-
parties since the contravention occurred; and
• does not need to make a finding about which persons are non-parties or the
nature of the loss or damage suffered, or likely to be suffered, by non-
parties.
[Schedule 1, item 2, subsection 53ZO(6) and (7)]
1.147 A non-party is bound by an order if they accept the redress, prevention or
reduction that has been ordered. The non-party may not make any claim, action
or demand against the contravening person in relation to the same loss or
damage. Any other order relating to that loss or damage has no effect in
relation to the non-party.
[Schedule 1, item 2, subsection 53ZO(8)]
1.148 As an order under this provision can void, alter, or render unenforceable any or
all of the provisions of a contract, an order under this provision can be an
exception to the general rule of severability in the Act.
[Schedule 1, item 4, section 4L]
33
Gas market
Avoidance schemes
1.149 Schedule 1 to the Bill prohibits schemes that are designed to avoid the
application of a civil penalty provision in a gas market instrument.
Prohibition on avoidance schemes
1.150 The general prohibition provides that a person must not enter into a scheme,
begin to carry out a scheme, or carry out a scheme if it would be reasonable to
conclude that the purpose of the person engaging in that conduct was to avoid
the application of a civil penalty provision of a gas market instrument.
[Schedule 1, item 2, subsection 53ZQ(1)]
1.151 In addition to the general prohibition on persons, Schedule 1 to the Bill
introduces prohibitions in similar terms that apply to:
• any constitutional corporations (either alone or with others) that enter into a
scheme, begin to carry out a scheme or carry out a scheme; and
• any person (either alone or with others) who enters into a scheme, begins to
carry out a scheme or carries out a scheme in the course of constitutional
trade or commerce.
[Schedule 1, item 2, subsections 53ZQ(2) and (3)]
1.152 A 'scheme' for the purpose of Part IVBB is defined broadly to capture:
• any agreement (including a contract), arrangement, understanding, promise
or undertaking whether express or implied; or
• any scheme, plan, proposal, action, course of action or course of conduct,
whether unilateral of otherwise; or
• any combination of the above.
[Schedule 1, item 2, section 53B (definitions of 'scheme' and 'agreement')]
1.153 The prohibitions are independent from and do not limit each other. While the
same conduct may engage more than one prohibition, a person can only be
ordered to pay one pecuniary penalty in respect of the same conduct.
[Schedule 1, items 2 and 14, subsections 53ZQ(4) and 76(3)]
1.154 The provisions dealing with avoidance schemes do not limit the provisions
dealing with gas market instruments (Division 2 of Part IVBB).
[Schedule 1, item 2, section 53ZS]
Non-compliance
1.155 The ACCC may issue an infringement notice in relation to any of the
avoidance prohibitions (see paragraph 1.120). An infringement notice is an
important tool to ensure timely outcomes, including in relation to gas
commodity price requirements set out in gas market instruments, particularly
34
Treasury Laws Amendment (Energy Price Relief Plan) Bill 2022
where there is clear evidence of purpose or where a party admits the
contravention.
1.156 Breach of an anti-avoidance provision attracts a maximum civil penalty of
$2,500,000 for an individual or, for a body corporate, the greater of:
• $50 million;
• if the court can determine the value of the benefit obtained--three times the
value of that benefit; or
• if the court cannot determine the value of the benefit obtained--30% of the
body corporate's adjusted turnover during the breach turnover period for
the offence, act or omission (see Table, item 1).
1.157 The maximum penalty for breach of an anti-avoidance provision aligns with
the maximum penalty for anti-competitive conduct and breaches of the ACL.
The maximum penalty reflects the seriousness engaging in avoidance
behaviour and the potential consequences that behaviour could have on other
gas market participants and Australian consumers more broadly. The
maximum penalty has been designed to provide adequate an effective deterrent
to breaches of the law, whilst ensuring a penalty cannot be considered an
acceptable cost of doing business.
Standard of reasonableness
1.158 The reference to whether it would be 'reasonable' to draw the conclusion that a
person has a relevant avoidance purpose ensures that the prohibition applies
objectively. Having to prove the subjective intention of the person in question
would otherwise not be feasible in many cases or would allow a person to
artificially document the purpose of a scheme as being other than for
avoidance. Using reasonableness ensures that the effectiveness of the anti-
avoidance provisions is not undermined.
1.159 The regulations may prescribe matters that must be considered in determining
whether it would be reasonable to conclude that the purpose of a person
entering into or carrying out a scheme was to avoid the application of a civil
penalty provision of a gas market instrument. This does not limit the matters to
which regard may be had in determining whether it would be reasonable to
conclude that a person entering into or carrying out a scheme did so in order to
avoid the application of a civil penalty provision of a gas market instrument.
[Schedule 1, item 2, section 53ZR]
Investigation powers
1.160 The investigation powers in Division 4 of Part IVBB do not limit the
provisions dealing with gas market instruments (Division 2 of Part IVBB) or
the general information-gathering powers of the ACCC under section 155.
[Schedule 1, item 2, section 53ZX]
35
Gas market
Notice to provide information
1.161 The ACCC may, by written notice, require a person who is required to keep, to
generate or to publish information or a document under a gas market
instrument to give the information, or produce the document, to the ACCC.
The notice may require the person to give the information, or produce the
document, within a specified period and in a specified manner.
[Schedule 1, item 2, subsections 53ZT(1) and (2)]
1.162 The notice must:
• name the person to which it is given;
• specify the information or document which is being sought by the ACCC;
• specify the provisions of the gas market instrument which require the
person to keep, to generate or to publish the information or document; and
• explain the person's right to apply for an extension of time to comply with
the notice, obligation to comply with the notice and the prohibition on
providing false or misleading information.
[Schedule 1, item 2, subsection 53ZT(3)]
1.163 A single notice may require the person to provide more than one piece of
information or relate to more than one document.
[Schedule 1, item 2, subsection 52ZT(4)]
Compliance with notices
1.164 A person that is given a notice must comply with the notice within a specified
period and in a specified manner, or within such longer time as agreed in
writing by the ACCC.
[Schedule 1, item 2, section 53ZV]
1.165 A person that fails to comply with a notice within the specified period is
subject to a maximum civil penalty of 3,000 penalty units (for a body
corporate) and 600 penalty units (for any other person) (also see Table, item 2).
[Schedule 1, items 2, 10 and 11, section 53ZV and subsections 76(1) and
76(1A)]
1.166 This penalty reflects the impact that failure to comply with a notice within a
specified period could have on the ability of the ACCC to investigate and
monitor obligations under a gas market instrument. The penalties reflect the
need for a strong deterrent and support the ACCC's ability to take effective
enforcement action in respect of these matters.
1.167 The ACCC may also issue an infringement notice if a person fails to comply
with a notice within a specified period (see paragraph 1.120).
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Treasury Laws Amendment (Energy Price Relief Plan) Bill 2022
Extending period for complying with notices
1.168 A person may apply in writing to the ACCC, within the specified period, for an
extension of time to comply. The ACCC may extend the time for compliance
with the notice by written notice to the person and has a discretion as to the
length of extension granted.
[Schedule 1, item 2, subsections 53ZU(1) and (2)]
1.169 The power to extend the period of compliance may be delegated by an ACCC
member in writing to an SES employee or an acting SES employee, who must
comply with any directions of the ACCC member in exercising the delegated
power.
[Schedule 1, item 2, subsections 53ZU(4) and (5)]
1.170 The ability to extend the period for compliance with a notice to provide
information or documents, as described above, does not affect any operation
that subsection 33(3) of the AIA has in relation to a notice. That subsection
provides that the power to make, grant or issue any instrument includes the
power to vary or revoke the instrument.
[Schedule 1, item 2, subsection 53ZU(3)]
False or misleading information
1.171 A person must not give false or misleading information, or produce documents
containing false or misleading information, in compliance or purported
compliance with a notice. A person that contravenes the prohibition is subject
to a maximum civil penalty of 3,000 penalty units (for a body corporate) and
600 penalty units (for any other person) (also see Table, item 2).
[Schedule 1, item 2, subsections 53ZW(1), 76(1) and 76(1A)]
1.172 This penalty reflects the impact that the provision of false or misleading
information or documents in response to a notice, could have on the ability of
the ACCC to investigate compliance with obligations under a gas market
instrument. They reflect the need for a strong deterrent and also support the
ACCC's ability to take effective enforcement action in respect of these matters.
1.173 A person does not contravene the prohibition if the person could not have
known the information was false or misleading or, if the person provides a
document containing false or misleading information, the document is
accompanied by a statement of the person that the information is false or
misleading.
[Schedule 1, item 2, subsection 53ZW(2)]
1.174 The ACCC may also issue an infringement notice if a person gives false or
misleading information, or produces documents containing false or misleading
information, in purported compliance with a notice (see paragraph 1.120).
37
Gas market
Other matters
Concurrent operation of certain provisions of the CCA
1.175 The gas market provisions operate concurrently and without limiting the
following provisions (and vice versa):
• Part IIIAA (the Australian Energy Regulator (AER));
• Part IIIA (Access to Services);
• Part IVB (Industry Codes);
• Part V (Carbon Tax Price Reduction Obligation);
• Part VIIA (Prices Surveillance);
• Part XICA (the Electricity Industry).
[Schedule 1, item 2, section 53ZY]
Concurrent operation of State and Territory laws
1.176 The gas market provisions are not intended to exclude or limit the operation of
a law of a State or Territory that is capable of operating concurrently with the
gas market provisions. However, a gas market instrument may provide that a
gas market instrument, or a specified provision, excludes or limits the
operation of a law of a State or Territory.
[Schedule 1, item 2, section 53ZZ]
Application of gas market provisions
1.177 The gas market provisions (other than provisions in relation to schemes for
avoidance purposes) apply in relation to gas market conduct if the conduct:
• is engaged in by a constitutional corporation;
• is engaged in by a person who is not a constitutional corporation, in a way
that affects, is capable of affecting or is taken with intent to affect the
activities, functions, relationships or business of a constitutional
corporation;
• occurs in the course of, or in relation to, constitutional trade or commerce;
or
• is engaged in by a Commonwealth government entity.
[Schedule 1, item 2, subsection 53ZZA(1)]
1.178 A 'constitutional corporation' is a corporation to which paragraph 51(xx) of
the constitution applies. 'Constitutional trade or commerce' is trade or
commerce among the States, trade or commerce between Australia and places
38
Treasury Laws Amendment (Energy Price Relief Plan) Bill 2022
outside of Australia, or trade or commerce within a Territory, between a State
and a Territory, or between two Territories.
[Schedule 1, item 2, section 53B (definitions of 'constitutional corporation'
and 'constitutional trade or commerce')]
1.179 Section 6 of the CCA, which extends the application of the CCA to persons
who are not corporations, does not apply in relation to the gas market
provisions.
[Schedule 1, item 2, subsection 53ZZA(2)]
Acquisition of property
1.180 Paragraph 51(xxxi) of the Constitution provides that the Commonwealth
Parliament may only legislate with respect to the acquisition of property by the
Commonwealth on just terms.
1.181 The gas market provisions have no effect to the extent (if any) to which they
would result in an acquisition of property (within the meaning of paragraph
51(xxxi) of the Constitution) other than on just terms (within the meaning of
that paragraph).
[Schedule 1, item 2, section 53ZZB]
Application of Part IVBB in relation to agreements
1.182 The provisions in Part IVBB apply in relation to agreements entered into
before, on or after commencement.
[Schedule 1, item 3]
Information gathering powers
1.183 Schedule 1 to the Bill extends the ACCC's existing information gathering
powers. Section 155 of the CCA is extended to apply to matters that may
constitute or that constitute contraventions of a gas market instrument, or to
matters relevant to a gas market instrument matter.
[Schedule 1, items 48 to 50, subsection 155(1) and subparagraphs
155(2)(a)(iiia) and 155(2)(b)(iaa)]
1.184 A 'gas market instrument matter' is defined as a reference to the performance
of a function or exercise of a power conferred on the ACCC by Part IVBB,
regulations made for the purposes of that Part (including a gas market code) or
a gas market emergency price order.
[Schedule 1, item 51, subsection 155(9AAA)]
1.185 Any written notice served on a person under subsection 155(1) may be served
in Australia or outside Australia (this is a general clarification and not specific
to Part IVBB).
[Schedule 1, item 48, subsection 155(1)]
39
Gas market
1.186 This is necessary as some gas market participants may be based overseas but
engage in gas market conduct in Australia. The ACCC therefore needs to be
able to serve information gathering notices overseas in order to be able to
effectively enforce gas market provisions. More generally, persons may carry
on a business in Australia while not being present in Australia for the purposes
of document service. It is important that overseas-based businesses operating
in Australia are not able to avoid the ACCC's enforcement powers. The
Competition and Consumer Regulations 2010 provide further detail on
methods for service in different cases.
1.187 Information given in confidence to the ACCC in relation to Part IVBB or a gas
market instrument cannot be disclosed except in limited circumstances. These
circumstances are where an ACCC official is performing their duties or
functions, or where an ACCC official or the ACCC is required by law to
disclose the information.
[Schedule 1, items 52 and 53, subsection 155AAA(21) (paragraph (a) of the
definition of 'core statutory provision']
Extension of existing enforcement provisions
1.188 In addition to the pecuniary penalties that may be applied for breach of the
CCA, Schedule 1 to the Bill extends existing enforcement and remedy
provisions, and associated powers of the ACCC, to Part IVBB, a gas market
instrument, or both.
Court orders and remedies
Injunctions
1.189 A person, including the ACCC, may apply to the court for an injunction where
another person is undertaking, or proposing to undertake, conduct which would
contravene parts of the CCA.
1.190 This provision has been extended to apply to contraventions of:
• the prohibition against entering into schemes for avoidance purposes by a
person, constitutional corporation or a person in the course of constitutional
trade or commerce;
• the requirement to comply with a notice given to a person by the ACCC to
provide information;
• the prohibition on giving false or misleading information, or producing
documents that contain false or misleading information, in response to a
notice; and
• a civil penalty provision of a gas market instrument.
[Schedule 1, item 16, subsection 80(1)]
40
Treasury Laws Amendment (Energy Price Relief Plan) Bill 2022
Action for damages
1.191 A person who suffers damage or loss as a result of a breach of Part IVBB, or a
civil penalty provision of a gas market instrument, is able to recover the
amount of the damage or loss sustained against that person or any person
involved in the contravention.
[Schedule 1, items 17 and 18, paragraphs 82(1)(a) and (ca)]
Findings and omissions of fact in proceedings to be evidence
1.192 A finding of fact established in earlier proceedings may be used in proceedings
by private litigants. This is extended to include where direct action is taken as a
result of a breach or contravention of Part IVBB or a civil penalty provision of
a gas market instrument.
[Schedule 1, items 19 to 21, subsection 83(1) and subparagraphs 83(1)(b)(i)
and (iia)]
Conduct of directors, employees or agents
1.193 If it is necessary to establish the state of mind of a body corporate or a person
other than a body corporate in proceedings under Part VI for conduct covered
by Part IVBB or a civil penalty provision of a gas market instrument, it is
sufficient to show that:
• a director, employee or agent of the body corporate or the person engaged
in that conduct;
• the director, employee or agent, in engaging in that conduct, was acting
within the scope of their actual or apparent authority; and
• the director, employee or agent had that statement of mind.
[Schedule 1, items 22, 23, 25 and 26, paragraphs 84(1)(b) and (3)(b)]
1.194 Any conduct engaged in on behalf of a body corporate or a person other than a
body corporate by a director, employee or agent, or any other person at the
direction or with the consent or agreement of a director, employee or agent of
the body corporate or the person, is deemed for the purposes of the CCA and a
gas market instrument to have been engaged in by the body corporate or the
person.
[Schedule 1, items 24 and 27, subsections 84(2) and (4)]
Non-punitive orders
1.195 Non-punitive orders are extended to enable the ACCC to seek application of a
non-punitive order for a breach of Part IVBB or a civil penalty provision of a
gas market instrument.
[Schedule 1, items 35 and 36, subsection 86C(4) (paragraph (a) of the
definition of 'contravening conduct')]
41
Gas market
Order disqualifying a person from managing corporations
1.196 The ability to apply for an order disqualifying a person from managing
corporations is extended to contraventions of a civil penalty provision of a gas
market instrument.
[Schedule 1, item 37, paragraph 86E(1)(a)]
1.197 In a civil or criminal proceeding arising out of the CCA or a civil penalty
provision of a gas market instrument, a person is not entitled to refuse to
comply with a requirement to answer a question or provide information on the
basis that it might expose the person to a penalty by way of an order under
section 86E.
[Schedule 1, item 38, subsections 86F(1) and (3)]
Other orders
1.198 There are a variety of orders that a court can make in proceedings relating to an
alleged contravention of the CCA. This list is extended to contraventions of a
civil penalty provision of a gas market instrument.
[Schedule 1, items 39 to 43, subsections 87(1) and 87(1A), paragraphs
87(1A)(a), (b) and (baa) and subsection 87(1C)]
Declarations
1.199 A person or the ACCC may, in relation to a matter arising under a gas market
instrument, institute a proceeding seeking a court to make a declaration.
[Schedule 1, items 56 to 59, subsection 163A(1), paragraphs 163A(1)(a) and
(aa), subsection 163A(3) and paragraph 163A(4)(a)]
Jurisdiction of courts
1.200 Jurisdiction is given to the following courts:
• in relation to Part IVBB and a gas market instrument--the Federal Court;
• in relation to civil proceedings instituted by a person other than the
Minister--the Federal Circuit and Family Court;
• in relation to civil proceedings instituted by a person other than the Minister
or ACCC--courts of the States or Territories.
[Schedule 1, items 28 to 32, subsections 86(1), (1A) and (2)]
1.201 A civil proceeding under Part IVBB or a civil penalty provision of a gas
market instrument instituted by a person other than the Minister or ACCC
which is pending in the Federal Court may be transferred to a court of a State
or Territory.
[Schedule 1, items 33 and 34, paragraph 86A(1)(b)]
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Treasury Laws Amendment (Energy Price Relief Plan) Bill 2022
ACCC powers
Enforcement of undertakings
1.202 The ACCC can accept written undertakings relating to a gas market
instrument.
[Schedule 1, item 44, subsection 87B(1)]
Search and seizure powers
1.203 The ACCC's search and seizure powers are extended to contravention of a gas
market instrument.
[Schedule 1, items 45 to 47, sections 154 and 154A (paragraph (a) of the
definition of 'evidential material') and paragraph 154V(2)(a)]
Disclosure of documents and information
1.204 If an application is made under section 53ZO for an order against a person, the
ACCC must, at the request of that person, provide them with a copy of any
relevant documents (other than those obtained from the person).
[Schedule 1, item 54, paragraph 157(1)(d)]
1.205 To assist the functions and powers of the Australian Energy Regulator and
Australian Energy Market Commission, the ACCC may disclose any
information obtained under the CCA or a gas market instrument to the
Australian Energy Regulator, Australian Energy Market Commission or any
staff or consultant assisting these regulators in their functions.
[Schedule 1, item 55, subsection 157A(1)]
Consequential amendments
Amendments relating to enforcement and compliance
1.206 Schedule 1 to the Bill makes minor amendments to the CCA to implement the
new framework in relation to enforcement and compliance.
1.207 The term 'gas market instrument' is added to several provisions in the CCA to
reflect that certain powers or functions under the CCA should also refer to
powers and functions in a gas market instrument due to the insertion of Part
IVBB.
1.208 In particular:
• the Chairperson of the ACCC may, for the purposes of exercising the
powers of the ACCC under a gas market instrument, direct that an associate
member of the ACCC be deemed to be a member of the ACCC;
[Schedule 1, item 5, subsection 8A(4)]
43
Gas market
• the Chairperson may direct that the powers of the ACCC under a gas
market instrument be exercised by a Division of the ACCC (more than one
Division may exercise powers of the ACCC under a gas market instrument
at the same time);
[Schedule 1, item 5, subsections 19(1) and (7)]
• the ACCC may delegate any of its powers under a gas market instrument to
a member of the ACCC, except the power to delegate powers and to grant,
revoke or vary an authorisation.
[Schedule 1, item 6, subsection 25(1)]
1.209 The Minister cannot use the general directions power under the CCA to direct
the ACCC regarding the performance of its functions or the exercise of its
powers under Part IVBB.
[Schedule 1, item 7, paragraph 29(1A)(a)]
Commencement, application, and transitional
provisions
1.210 Schedule 1 to the Bill commences on the day after Royal Assent.
44
Temporary and targeted
energy bill relief
Table of Contents:
Outline of chapter ................................................................................ 45
Context of amendments ....................................................................... 45
Summary of new law............................................................................ 46
Detailed explanation of new law .......................................................... 46
Appropriation of funds ................................................................... 46
Payment of funds .......................................................................... 47
Payment determination ................................................................. 47
Commencement, application, and transitional provisions .................... 48
Outline of chapter
2.1 Schedule 2 to the Bill amends the FFR Act to introduce a new type of payment
to the States and Territories to support temporary and targeted relief on energy
bills for eligible households and small businesses.
2.2 All references in this Chapter are to the FFR Act unless otherwise stated.
Context of amendments
2.3 The Government is committed to reducing the impact of the global energy
shock on Australian households and businesses caused by Russia's invasion of
Ukraine. Over the course of 2022, the war in Ukraine has resulted in
significant volatility and record energy prices on international markets. The
current energy crisis was unforeseen and its economic impact on Australia is
severe.
2.4 Energy price shocks affect economic activity through a variety of direct and
indirect channels, including inflation and cost of living pressures. As a result,
Australian households and businesses are paying significantly more for energy
and energy-intensive goods and services.
45
Temporary and targeted energy bill relief
2.5 In response to the current energy crisis, the Government is partnering with
States and Territories to deliver temporary and targeted relief on power bills to
eligible Australian households and small businesses that are customers of
electricity retailers. Schedule 2 to the Bill facilitates payments to States and
Territories for this purpose.
Summary of new law
2.6 Schedule 2 to the Bill introduces a new payment to States and Territories to
support temporary energy bill relief for households and small businesses by:
• providing an appropriation for $1.5 billion to be paid as financial assistance
to the States and Territories; and
• ensuring the payments are subject to the temporary energy bill relief
agreement, as well as governance arrangements that exist for similar
payments.
Detailed explanation of new law
2.7 Schedule 2 to the Bill provides that an object of the FFR Act is to provide
financial support for the delivery by the States and Territories of temporary and
targeted relief from high energy bills for households and small businesses.
[Schedule 2, items 1 and 2, section 3]
Appropriation of funds
2.8 The FFR Act appropriates funds and establishes payment arrangements in
accordance with the Federation Funding Agreements framework, agreed to by
the Commonwealth and States and Territories.
2.9 The amendments use the existing appropriation in the FFR Act. The
Commonwealth will be entering into temporary energy bill relief agreements
with each of the States and Territories to provide financial assistance of $1.5
billion in total. As the amount payable to each State and Territory will be
subject to individual temporary energy bill relief agreements, the amendments
provide flexibility in the overall amount payable, reflecting that when each of
the agreements are added together, they may not result in financial assistance
of exactly $1.5 billion.
[Schedule 2, items 4 and 7, sections 15F and 22]
46
Treasury Laws Amendment (Energy Price Relief Plan) Bill 2022
Payment of funds
2.10 Payments to support energy bill relief for households and small businesses are
temporary and only apply in relation to the 2022-23 and 2023-24 financial
years.
[Schedule 2, item 4, subsection 15E(1)]
2.11 To receive these payments, States and Territories must be party to the
temporary energy bill relief agreement and meet the conditions set out in that
agreement. The State or Territory must also spend the payments in accordance
with the temporary energy bill relief agreement and any additional terms or
conditions (if any) as set out in the agreement.
[Schedule 2, item 4, subsections 15E(1), (4) and (5)]
2.12 The temporary energy bill relief agreement is an agreement that:
• is entered into between the Commonwealth and one or more of the States;
and
• relates to the delivery by the State or States of temporary relief from high
energy bills for households and small businesses; and
• provides that the State or States must not deliver that relief to a household
or small business unless criteria specified in the agreement in relation to the
household or small business are met;
• is expressed to be a temporary energy bill relief agreement for the purposes
of the FFR Act; and
• is entered into on or after 9 December 2022.
[Schedule 2, item 3, section 4 (definition of 'temporary energy bill relief
agreement')]
2.13 The temporary energy bill relief agreement will be supported by the existing
Federation Funding Agreement framework which provides the appropriate
governance and accountability framework.
2.14 Part 5 of the FFR Act provides administrative and reconciliation processes to
support the payments, including for advance payments, overpayment and
underpayments and repayment if a condition is not fulfilled.
[Schedule 2, item 5, paragraphs 17(b), 18(1)(b) and 18(2)(b)]
Payment determination
2.15 The amendments provide that the Minister will determine the amount to be
paid to the States and Territories for a financial year for the purposes of these
grants by way of a determination.
[Schedule 2, item 4, subsection 15E(2)]
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Temporary and targeted energy bill relief
2.16 The determination is a legislative instrument but is not subject to disallowance.
This is because the determinations facilitate the operation of an
intergovernmental scheme involving the Commonwealth and States and
Territories and are made for the purpose of that scheme. In this instance, the
scheme is the temporary energy bill relief agreement and payments made by
the Commonwealth are for the purpose of that agreement.
[Schedule 2, item 4, subsection 15E(3)]
2.17 In making the determination, the amendments ensure the Minister has regard
for the Intergovernmental Agreement on Federal Financial Relations. This
agreement provides an overarching framework for financial transfers between
the Commonwealth and the States and related collaboration on policy
development and service delivery
[Schedule 2, item 6, paragraph 21(ad)]
Commencement, application, and transitional
provisions
2.18 Schedule 2 to the Bill commences on the day after Royal Assent.
48
Statement of
Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny)
Act 2011.
Treasury Laws Amendment (Energy Price Relief Plan) Bill 2022
Table of Contents:
Schedule 1--Gas Market ..................................................................... 49
Overview .............................................................................................. 49
Human rights implications .................................................................... 50
Conclusion ........................................................................................... 53
Schedule 2--Temporary and targeted energy bill relief ....................... 53
Overview .............................................................................................. 53
Human rights implications .................................................................... 54
Conclusion ........................................................................................... 54
Schedule 1--Gas Market
Overview
3.1 Schedule 1 to the Bill is compatible with the human rights and freedoms
recognised or declared in the international instruments listed in section 3 of the
Human Rights (Parliamentary Scrutiny) Act 2011.
3.2 Schedule 1 to the Bill empowers the Government to regulate the Australian gas
market for the purposes of enhancing the welfare of Australians.
3.3 Schedule 1 to the Bill primarily enables two kinds of legislative instrument
(known as gas market instruments) to be made that may set out certain
requirements and obligations.
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Statement of Compatibility with Human Rights
3.4 First, the Governor-General may make rules through regulations (known as gas
market codes), which prescribe a broad range of matters relating to the supply
and acquisition of gas commodities, including:
• regulating dealings between persons who supply or acquire gas
commodities, including negotiations between them;
• dealing with and resolving disputes or complaints between persons who
supply or acquire gas commodities.
3.5 Second, the Minister may make rules through an order (known as gas market
emergency price orders) regulating the terms on which gas commodities are
supplied or acquired, specifically including price. A gas market emergency
price order is intended to be temporary, and provide the basis for emergency
price regulation, primarily to reduce domestic gas prices and address the
current energy crisis.
3.6 A person must not enter into a scheme for the purpose of avoiding the
application of a gas market instrument.
3.7 Consequences of contravening a gas market instrument include civil penalties,
infringement notices, warning notices and orders under Part VI. The ACCC
has investigation and enforcement powers in relation to a gas market
instrument.
Human rights implications
3.8 Schedule 1 to the Bill promotes the right to an adequate standard of living.
3.9 The gas market participants that may be regulated by a gas market code or a
gas market emergency price order are mainly expected to be bodies corporate,
which do not have human rights. To the extent that it is possible that an
individual may be regulated by a gas market instrument, Schedule 1 to the Bill
engages the following human rights:
• the right to protection from arbitrary or unlawful interference with privacy;
and
• the right to a fair trial and presumption of innocence.
Right to an adequate standard of living
3.10 Schedule 1 to the Bill promotes the right to an adequate standard of living,
including food, water and housing under Article 11 of the International
Covenant on Economic, Social and Cultural Rights (ICESCR).
3.11 The right to an adequate standard of living provides that Australia must take
appropriate steps towards the realisation of this right in its jurisdiction, and that
the relevant standard must be continuously improving.
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Treasury Laws Amendment (Energy Price Relief Plan) Bill 2022
3.12 Schedule 1 to the Bill improves the standard of living in Australia by
facilitating the regulation of gas markets to enhance the welfare of Australians,
including by reducing or mitigating the impact of rising energy prices.
Right to protection from arbitrary or unlawful interference with privacy
3.13 Schedule 1 to the Bill engages the right to protection from unlawful or
arbitrary interference with privacy under Article 17 of the International
Covenant on Civil and Political Rights (ICCPR).
3.14 The right in Article 17 may be subject to permissible limitations, where these
limitations are authorised by law and are not arbitrary. In order for an
interference with the right to privacy to be permissible, the interference must
be authorised by law, be for a reason consistent with the ICCPR and be
reasonable in the particular circumstances. The UN Human Rights Committee
has interpreted the requirement of 'reasonableness' to imply that any
interference with privacy must be proportional to the end sought and be
necessary in the circumstances of any given case.
Information gathering powers
3.15 Amendments to section 155 provide the ACCC with the ability to obtain
information, documents and evidence in order to determine whether there has
been a breach of a gas market instrument or of matters relevant to a gas market
instrument matter.
3.16 This interference is reasonable and proportionate to ensuring transparency in
the sector because providing the ACCC with these information-gathering
powers helps ensure that a gas market instrument does not develop in a manner
that could harm consumers or undermine the stability of other systems.
Further, section 155AAA ensures the protection of information arising under
Part IVBB and a gas market instrument from being disclosed, except in limited
circumstances. This is intended to protect the privacy of information disclosed,
consistent with the right to privacy under Article 17.
Notices to provide information or documents
3.17 Schedule 1 to the Bill provides the ACCC with the ability to inspect documents
or records that are required to be kept, generated or published under a gas
market instrument. This interference is reasonable and proportionate because it
helps to ensure that gas market participants are complying with a gas market
instrument by allowing the ACCC to monitor compliance.
Public warning notices
3.18 The right to privacy under Article 17 includes the right to protection of one's
reputation. Schedule 1 to the Bill engages this right because it allows the
ACCC to issue a public warning notice in relation to an alleged contravention
of a gas market instrument.
3.19 However, the interference is reasonable and proportionate because the new
provisions only allow the ACCC to issue a public warning notice if it
51
Statement of Compatibility with Human Rights
reasonably believes that one or more persons is likely to suffer detriment as a
result of the alleged contravention and it is in the public interest to issue the
notice. Additionally, the ACCC must provide a draft of the notice to the person
and allow them at least 21 days to respond.
3.20 The new provisions are therefore appropriate in light of the requirements the
ACCC must meet and the harm that contraventions of a gas market instrument
could cause to gas market participants in the gas market and to the broader
public.
Right to a fair trial and presumption of innocence
3.21 Schedule 1 to the Bill may engage criminal process rights under Articles 14
and 15 of the ICCPR.
Infringement notices
3.22 Schedule 1 to the Bill may be considered to engage the right to a fair and
public hearing under Article 14 of the ICCPR as it extends the existing
infringement notice provisions in the CCA so that an infringement notice may
be given in response to a contravention of certain provisions relating to
schemes for avoidance purposes, a failure to comply with a notice to produce
information to the ACCC or provision of false or misleading information in
response to a notice, or a contravention of certain civil penalty provisions of
Schedule 1 to the Bill or a gas market instrument.
3.23 However, the right to a fair and public hearing by a competent, independent
and impartial hearing is not limited by Schedule 1 to the Bill because the
person may still elect to have the matter heard by a court rather than pay the
amount specified in the infringement notice. This right will be stated in any
infringement notice.
3.24 Infringement notices are an administrative tool that the ACCC can use to deter
misconduct. They can also act as an alternative to criminal or civil
proceedings. Infringement notices function like a fine or financial penalty. If
an infringement notice is complied with, including payment of the penalty, no
further action will be taken against the person. The payment is not considered
an admission of criminal guilt.
3.25 The provisions of Schedule 1 to the Bill which relate to infringement notices
are therefore not considered to limit the rights to a fair and public hearing and
presumption of innocence.
Civil penalties
3.26 Civil penalty provisions may engage criminal process rights under Articles 14
and 15 of the ICCPR regardless of the distinction between criminal and civil
penalties in domestic law. When a provision imposes a civil penalty, an
assessment is therefore required as to whether it amounts to a 'criminal'
penalty for the purposes of Articles 14 and 15 of the ICCPR.
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Treasury Laws Amendment (Energy Price Relief Plan) Bill 2022
3.27 The civil penalty provisions contained in Schedule 1 to the Bill are not
'criminal' for the purposes of human rights law. While a criminal penalty is
deterrent or punitive, these provisions are regulatory and disciplinary, and they
aim to encourage compliance with Schedule 1 to the Bill. Further, the
provisions do not apply to the general public, but to a sector or class of people
who should reasonably be aware of their obligations under the Act - suppliers
and purchasers of specified gas commodities. Therefore, imposing these civil
penalties will enable an effective disciplinary response to non-compliance.
3.28 The judiciary continues to have discretion to consider the seriousness of the
contravention and impose a penalty that is appropriate in the circumstances.
The civil courts are experienced in making civil penalty orders at appropriate
levels having regard to the maximum penalty amount, taking into account a
range of factors including the nature of the contravening conduct and the size
of the organisation involved.
3.29 The nature and severity of the potential civil penalties for breaches of the
prohibition against schemes for avoidance purposes, failure to comply with a
notice to product information to the ACCC or provision of false or misleading
information, and the civil penalty provisions of a gas market instrument are
therefore not 'criminal' for the purposes of human rights law and so these
provisions do not engage the criminal process rights under Articles 14 and 15
of the ICCPR.
Conclusion
3.30 Schedule 1 to the Bill is compatible with human rights because to the extent
that Schedule 1 to the Bill may limit human rights, those limitations are
reasonable, necessary and proportionate. Schedule 1 to the Bill also promotes
the right to an adequate standard of living.
Schedule 2--Temporary and targeted energy
bill relief
Overview
3.31 Schedule 2 to the Bill is compatible with the human rights and freedoms
recognised or declared in the international instruments listed in section 3 of the
Human Rights (Parliamentary Scrutiny) Act 2011.
3.32 Schedule 2 amends the FFR Act to introduce a new type of payment to the
States and Territories to support temporary and targeted relief on energy bills
for eligible households and small businesses.
53
Statement of Compatibility with Human Rights
Human rights implications
3.33 Schedule 2 to the Bill promotes the right to an adequate standard of living,
including food, water and housing under Article 11 of the ICESCR.
3.34 The right to an adequate standard of living provides that Australia must take
appropriate steps towards the realisation of this right in its jurisdiction, and that
the relevant standard must be continuously improving.
3.35 Schedule 2 to the Bill improves the standard of living in Australia by
supporting temporary and targeted relief on energy bills for eligible households
and small businesses. This will assist in enhancing the welfare of Australians,
including by reducing or mitigating the impact of rising energy prices.
Conclusion
3.36 Schedule 2 to the Bill is compatible with human rights as it promotes the right
to an adequate standard of living.
54