Albanese postpones energy market intervention meeting with states after testing positive for Covid

<span>Photograph: Reuters</span>
Photograph: Reuters

A critical national cabinet meeting to resolve a stand-off between Canberra and the states over the Albanese government’s long-mooted energy market intervention has been delayed after the prime minister tested positive for Covid-19.

Anthony Albanese revealed he had Covid late on Monday and the prime minister’s office confirmed shortly after that the national cabinet meeting planned for Wednesday had been postponed.

Albanese had been due to dine with the premiers and chief ministers on Tuesday evening but the prime minister is now isolating at his official Sydney residence, Kirribilli House. Officials say the prime minister is up to date with his booster shots.

The prime minister’s second coronavirus infection in seven months comes amid a new surge of cases as Australians prepare for the summer break. In a statement, Albanese said: “I encourage anyone who is unwell to test and take any extra precautions to keep their families and neighbours well.”

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Earlier in the day, Albanese warned premiers and chief ministers that households and businesses would pay more for power, and manufacturers would go out of business, unless Canberra and the states and territories agreed to a cooperative intervention in the energy market in the coming days.

Deliberation around the Albanese government’s regulatory intervention to help lower power bills was a pressing issue on the national cabinet agenda this week. The prime minister faced questions during a radio interview in Adelaide on Monday about the costs of the intervention, given the premiers are currently playing hardball.

Before his diagnosis, Albanese said he was continuing to have cooperative discussions with the premiers of New South Wales and Queensland, and “we’ll have a dinner tomorrow night and then we’ll have a meeting on Wednesday”.

“We’ve said that we will act and we will act before Christmas,” the prime minister said on Monday. “And I don’t think that there is a premier or chief minister who will sit back and say, ‘yep, this is all OK’, for prices to continue to rise and projections which are there”.

Albanese predicted “common positions” would emerge “because we need to act on this”. But the prime minister also issued a clear warning. “What we know, and the premiers know this as well, is that unless we act there will be a considerable increase in the cost of power for both individuals, for households, but also for businesses”.

“And I don’t want manufacturers to go out of business”.

The government is looking at price cap options to assist industrial users of gas and households battling a surge in their power bills, but it is unclear how quickly the leaders will land an agreement given the unresolved squabble over who carries the costs.

Guardian Australia revealed last week the Albanese government may struggle to provide comprehensive energy price relief unless NSW and Queensland were prepared to cooperate with a plan to temporarily cap the wholesale price of coal.

During a briefing in a federal cabinet meeting last Monday, ministers heard the commonwealth has the regulatory levers to reduce gas prices for industrial users, but there was concern a replica intervention in the coal market might be more complex for Canberra to execute and could open the possibility of legal challenges, given producers will resist.

The NSW government has refuted this, saying it has a legal opinion that suggests Canberra can impose a cap on coal prices. The state energy minister, Matt Kean, has urged quick action.

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Last week, the Queensland premier, Annastacia Palaszczuk, declared the Albanese government needed to keep its “hands off our generators”. Palaszczuk then doubled down on Monday.

She told reporters in Brisbane there would “have to be adequate compensation” if she were to agree to Albanese’s price cap proposal.

“As I said in the parliament last week, and I’ve stuck to my guns in relation to this, we would have to be very, very convinced that no Queenslander would be worse off,” the premier said.

Asked to quantify the level of compensation Queensland was seeking, the premier said: “We’ll be working through all those issues as you can appreciate a lot of work has been going in on the weekend, and I can’t say anything further until we have the meeting on Wednesday.”

The Albanese government has been indicating it will intervene significantly in the energy market since budget week, when Treasury forecasts predicted power prices would increase by 56% by the end of next year.

The government has been pursuing price caps for coal and gas, and the intervention will also include making the gas industry code of conduct mandatory. Albanese said on Monday it was wrong for energy producers to bank a “massive windfall gain and that somehow that’s occurring at the same time as businesses and people are doing it tough”.

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Palaszczuk said on Monday east coast gas supply could be increased with better infrastructure if Albanese was prepared to pick up the tab. “We’ve suggested that a pipeline could be built, funded by the commonwealth, New South Wales and Victoria directly from the Bowen Basin to release more gas domestically,” she said.

“There’s an issue of supply that we know has been around for a long time. But like I said, these are very involved discussions and I’m not going to say anything further than what I’ve already said in the parliament last week.”

Federal cabinet was due to meet on Tuesday ahead of the national cabinet discussion on Wednesday. Prior to Monday’s positive test result, the prime minister was scheduled to travel to Western Australia for a full ministry meeting there later in the week.