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Labor warns about big energy 'garage sale'

Labor warns about big energy 'garage sale'.jpg

Labor warns about big energy 'garage sale' (AAP Image/Julian Smith) 

Labor is urging the government to snap its "big stick" energy policy in fear of the impact it could have on state electricity sectors.

The bill could clear the lower house on Thursday in the final parliamentary sitting day of the year.

The coalition has signalled it could use the new powers to split up state-owned assets, such as in Queensland where the state government controls the electricity sector.

Labor's finance spokesman Jim Chalmers described the policy and the prospect of energy privatisation as a disaster for Australia.

"Stop poking Queenslanders in the eye with the 'big stick'," Mr Chalmers told reporters on Thursday.

"Don't turn the 'big stick' into a big garage sale of public energy assets in Queensland, and indeed in WA and in Tasmania and elsewhere in Australia

"(The government) should stand up today and say, look, we stuffed this up really badly, it's time for us to go back to the drawing board."

Treasurer Josh Frydenberg has sought to play down fears that state governments could be forced to sell off power companies.

"If you got that very extreme situation where a government was forced to divest an asset, it would only go to another government entity," he told ABC Radio on Thursday.

"This is a scare campaign from Labor."

Centre Alliance MP Rebekha Sharkie has indicated her support for the bill, which could see the coalition get it over the line in the lower house.

Business groups and energy companies have joined Labor to speak out against the proposal, saying it will stall investment and push up power prices.

Energy Minister Angus Taylor said the increased powers, which would ease pressure on prices through greater competition, are necessary as 80 per cent of the market is dominated by three major players.

© AAP 2018