"The Business Council supports lower electricity prices but does not believe this will be achieved by ad hoc and extreme intervention in the electricity market which brings new risks, unintended consequences and has never worked before," the BCA said in its submission to Treasury. 

 

The BCA takes a similar view to the Australian Energy Council (AEC) which took aim at the government's position last month, saying it was "plagued with problems". 

 

The Morrison government has been facing strong resistance to its latest energy policy, or lack thereof, which would grant sweeping powers to the Treasurer and ACCC allowing the government to re-regulate the market and break up power companies through forced divestment in an attempt to bring down power prices before next year's election. 

 

The BCA's submission came the same day Labor leader Bill Shorten announced a comprehensive energy platform that would see more than $15 billion invested in renewables and energy infrastructure modernisation should it win government at next year's election. 

 

The BCA believes the introduction of the "heavy-handed, intrusive" government remedies could set a "dangerous precedent" for other sectors of the economy and threaten international investor confidence. 

 

Last month, at a joint media conference, energy minister Angus Taylor (dubbed the "minister for getting prices down") stood shoulder-to-shoulder with PM Morrison to announce the government's "fair dinkum deal on energy" platform that would "stop big power companies ripping off loyal customers". 

 

The rhetoric by the federal government has done nothing to allay business concerns, and drew raised eyebrows from the BCA in its submission. 

 

"Inquiry after inquiry into retail prices, wholesale bidding and conduct and contract market liquidity has not found any evidence of fraudulent or dishonest behaviour, nor acts of bad faith with the purpose of distorting or manipulating prices," the BCA said.

 

"Consequently the government's rationale behind developing this intrusive legislative regime remains unclear and the policy case has not been made." 

 

Morrison and Taylor have previously said the rationale for their "Big Stick" approach lies within the Australian Competition and Consumer Commission report into the retail electricity market. The report followed two inquiries by the AER and Australian Energy Market Commission. 

 

All three inquiries recommended that anti-competitive behaviour would not lower energy prices and that the most significant reason behind the increase in wholesale prices was policy failure that undermined investment certainty in the market. 

 

Both the BCA and AEC have flagged the importance and merit of judicial review of the proposed legislative changes to award the ACCC and Treasurer divestment powers alongside re-regulation. 

 

The AEC sought legal advice from law firm Ashurst, which questioned the legitimacy and legality of the government's right to use its big stick break up energy retailers and companies. 

 

 The law firm's most serious concerns pertained to the framing and constitutionality of both the ACCC and Treasurer gaining new legislated powers that could impose price regulation on energy retailers and require generators to contract with third parties or be forced to divest assets. 

 

"Our view is that if these quasi-judicial powers are to be introduced then they should be exercised independently so that the decision-making process is not influenced by the potential for political interference," the advice said. 

 

The BCA submission was released just a day after the prime minister delivered a speech at the BCA annual dinner in Canberra.