❓ Question on Notice regarding the potential impact of rising coal prices on Verve Energy and electricity tariffs, and whether the Premier misled the public about coal contract price reductions. The Premier denies misleading anyone and argues the opposition misunderstands the complexities of tariff setting.
AnsweredQoN 213Legislative Assembly
QuestionView source ↗
FRONTIER ECONOMICS REPORT — COAL PRICES
I refer to the Frontier Economics report of April 2008 entitled “Electricity Retail Market Review — Electricity Tariffs”, which the Premier’s government is using to support significant electricity price increases and to support injecting $780 million of taxpayers’ money substantially into Verve Energy. The executive summary in the report states — · coal prices are likely to increase to reflect increases in gas prices, also increasing the costs of fuel for electricity generation; I ask — (1) Does this statement apply to Verve Energy? (2) Will coal prices paid by Verve Energy increase significantly in the near future? (3) If so, did the Premier mislead this house and the Western Australian community when he claimed credit on 1 April 2008 for cutting the price of the 20-year coal contract commencing in 2010 from $65 to $30? Mr A.J. CARPENTER
I refer to the Frontier Economics report of April 2008 entitled “Electricity Retail Market Review — Electricity Tariffs”, which the Premier’s government is using to support significant electricity price increases and to support injecting $780 million of taxpayers’ money substantially into Verve Energy. The executive summary in the report states — · coal prices are likely to increase to reflect increases in gas prices, also increasing the costs of fuel for electricity generation; I ask — (1) Does this statement apply to Verve Energy? (2) Will coal prices paid by Verve Energy increase significantly in the near future? (3) If so, did the Premier mislead this house and the Western Australian community when he claimed credit on 1 April 2008 for cutting the price of the 20-year coal contract commencing in 2010 from $65 to $30? Mr A.J. CARPENTER
AnswerView source ↗
I thank the member for the question. (1)-(3) No, I did not mislead the Parliament then or at any other time. I do not think anyone seriously thinks I did. I really think we have a problem, in that I do not think the member understands what has happened here. I really do not. However, I will use this informal note I have as the basis for my response, if I may. The key point is that tariffs cannot be set, this note tells me, using a coal price assumption based on a contract that Western Power Corporation signed in August 2005—the contract that was assigned to Verve Energy at disaggregation. There are multiple generators in the market and the tariffs need to be set based on market prices for fuel. Verve Energy is but one generator using coal, and the tariff must reflect the market price for coal. The tariff review was based on the market price for coal that assumes coal producers will shadow price to gas. Can I try to sort out the opposition’s position? Does the shadow Treasurer believe there is substantial upward pressure on power prices? Dr S.C. Thomas : I believe there is upward pressure on power prices. Mr A.J. CARPENTER : If he were in government, would he not support Verve Energy in the interim until it can achieve cost-reflective pricing? Dr S.C. Thomas : If we were in government, we would provide an honest report that gives an honest position about where coal prices are heading and what electricity prices should be. We would not be hiding behind a report that you cannot even verify in here. If you think that statement is accurate, say it. Mr A.J. CARPENTER : While I am on my feet, may I acknowledge and welcome the students in the public gallery from Kolbe Catholic College. I apologise for not having already done so. There is a sort of convoluted logic in what the shadow Treasurer is suggesting. He is suggesting that the government is using sleight of hand to slug the taxpayer. Is that what he is saying? Dr S.C. Thomas : I am saying that you have to explain whether Verve Energy will be losing more like $375 million a year because you have an extra $2 billion effectively going into the budget over that period. Mr A.J. CARPENTER : Two million? Dr S.C. Thomas : Two billion dollars is effectively going into the budget over that period. Read the MPI from yesterday and find out where the government is putting the money. Either Verve Energy is losing a lot more than you are telling the Western Australian public or you are pulling a fiddle. I think you might be pulling a fiddle on the people of Western Australia. It would not be the first one the Labor party has been playing. Mr A.J. CARPENTER : I think I would be a foolish leader to be telling people that they are going to have to pay higher electricity prices than what we think they really need to pay. If the shadow Treasurer looks at the strategy we have adopted to address the situation, he will see that the underlying logic is that we do not want people to have to pay more for their energy bills in huge jumps all at once. Dr S.C. Thomas : You are spreading the huge jumps over a longer period. Mr A.J. CARPENTER : So we are spreading the pain over a more reasonable period. Dr S.C. Thomas : I’m not arguing with that. Mr A.J. CARPENTER : It would be a strange logic, would it not, for me to impose economic pain on the people of Western Australia and, before the next election, tell them that is what I am going to do, even though that change will not occur until well after the next election? Why would I come out well in advance of the next election and tell people that, after the next election, we will have to substantially increase energy prices, if that is not necessary?
(1) Does this statement apply to Verve Energy? (2) Will coal prices paid by Verve Energy increase significantly in the near future? (3) If so, did the Premier mislead this house and the Western Australian community when he claimed credit on 1 April 2008 for cutting the price of the 20-year coal contract commencing in 2010 from $65 to $30? Mr A.J. CARPENTER replied: I thank the member for the question. (1)-(3) No, I did not mislead the Parliament then or at any other time. I do not think anyone seriously thinks I did. I really think we have a problem, in that I do not think the member understands what has happened here. I really do not. However, I will use this informal note I have as the basis for my response, if I may. The key point is that tariffs cannot be set, this note tells me, using a coal price assumption based on a contract that Western Power Corporation signed in August 2005—the contract that was assigned to Verve Energy at disaggregation. There are multiple generators in the market and the tariffs need to be set based on market prices for fuel. Verve Energy is but one generator using coal, and the tariff must reflect the market price for coal. The tariff review was based on the market price for coal that assumes coal producers will shadow price to gas. Can I try to sort out the opposition’s position? Does the shadow Treasurer believe there is substantial upward pressure on power prices? Dr S.C. Thomas : I believe there is upward pressure on power prices. Mr A.J. CARPENTER : If he were in government, would he not support Verve Energy in the interim until it can achieve cost-reflective pricing? Dr S.C. Thomas : If we were in government, we would provide an honest report that gives an honest position about where coal prices are heading and what electricity prices should be. We would not be hiding behind a report that you cannot even verify in here. If you think that statement is accurate, say it. Mr A.J. CARPENTER : While I am on my feet, may I acknowledge and welcome the students in the public gallery from Kolbe Catholic College. I apologise for not having already done so. There is a sort of convoluted logic in what the shadow Treasurer is suggesting. He is suggesting that the government is using sleight of hand to slug the taxpayer. Is that what he is saying? Dr S.C. Thomas : I am saying that you have to explain whether Verve Energy will be losing more like $375 million a year because you have an extra $2 billion effectively going into the budget over that period. Mr A.J. CARPENTER : Two million? Dr S.C. Thomas : Two billion dollars is effectively going into the budget over that period. Read the MPI from yesterday and find out where the government is putting the money. Either Verve Energy is losing a lot more than you are telling the Western Australian public or you are pulling a fiddle. I think you might be pulling a fiddle on the people of Western Australia. It would not be the first one the Labor party has been playing. Mr A.J. CARPENTER : I think I would be a foolish leader to be telling people that they are going to have to pay higher electricity prices than what we think they really need to pay. If the shadow Treasurer looks at the strategy we have adopted to address the situation, he will see that the underlying logic is that we do not want people to have to pay more for their energy bills in huge jumps all at once. Dr S.C. Thomas : You are spreading the huge jumps over a longer period. Mr A.J. CARPENTER : So we are spreading the pain over a more reasonable period. Dr S.C. Thomas : I’m not arguing with that. Mr A.J. CARPENTER : It would be a strange logic, would it not, for me to impose economic pain on the people of Western Australia and, before the next election, tell them that is what I am going to do, even though that change will not occur until well after the next election? Why would I come out well in advance of the next election and tell people that, after the next election, we will have to substantially increase energy prices, if that is not necessary?
(2) Will coal prices paid by Verve Energy increase significantly in the near future? (3) If so, did the Premier mislead this house and the Western Australian community when he claimed credit on 1 April 2008 for cutting the price of the 20-year coal contract commencing in 2010 from $65 to $30? Mr A.J. CARPENTER replied: I thank the member for the question. (1)-(3) No, I did not mislead the Parliament then or at any other time. I do not think anyone seriously thinks I did. I really think we have a problem, in that I do not think the member understands what has happened here. I really do not. However, I will use this informal note I have as the basis for my response, if I may. The key point is that tariffs cannot be set, this note tells me, using a coal price assumption based on a contract that Western Power Corporation signed in August 2005—the contract that was assigned to Verve Energy at disaggregation. There are multiple generators in the market and the tariffs need to be set based on market prices for fuel. Verve Energy is but one generator using coal, and the tariff must reflect the market price for coal. The tariff review was based on the market price for coal that assumes coal producers will shadow price to gas. Can I try to sort out the opposition’s position? Does the shadow Treasurer believe there is substantial upward pressure on power prices? Dr S.C. Thomas : I believe there is upward pressure on power prices. Mr A.J. CARPENTER : If he were in government, would he not support Verve Energy in the interim until it can achieve cost-reflective pricing? Dr S.C. Thomas : If we were in government, we would provide an honest report that gives an honest position about where coal prices are heading and what electricity prices should be. We would not be hiding behind a report that you cannot even verify in here. If you think that statement is accurate, say it. Mr A.J. CARPENTER : While I am on my feet, may I acknowledge and welcome the students in the public gallery from Kolbe Catholic College. I apologise for not having already done so. There is a sort of convoluted logic in what the shadow Treasurer is suggesting. He is suggesting that the government is using sleight of hand to slug the taxpayer. Is that what he is saying? Dr S.C. Thomas : I am saying that you have to explain whether Verve Energy will be losing more like $375 million a year because you have an extra $2 billion effectively going into the budget over that period. Mr A.J. CARPENTER : Two million? Dr S.C. Thomas : Two billion dollars is effectively going into the budget over that period. Read the MPI from yesterday and find out where the government is putting the money. Either Verve Energy is losing a lot more than you are telling the Western Australian public or you are pulling a fiddle. I think you might be pulling a fiddle on the people of Western Australia. It would not be the first one the Labor party has been playing. Mr A.J. CARPENTER : I think I would be a foolish leader to be telling people that they are going to have to pay higher electricity prices than what we think they really need to pay. If the shadow Treasurer looks at the strategy we have adopted to address the situation, he will see that the underlying logic is that we do not want people to have to pay more for their energy bills in huge jumps all at once. Dr S.C. Thomas : You are spreading the huge jumps over a longer period. Mr A.J. CARPENTER : So we are spreading the pain over a more reasonable period. Dr S.C. Thomas : I’m not arguing with that. Mr A.J. CARPENTER : It would be a strange logic, would it not, for me to impose economic pain on the people of Western Australia and, before the next election, tell them that is what I am going to do, even though that change will not occur until well after the next election? Why would I come out well in advance of the next election and tell people that, after the next election, we will have to substantially increase energy prices, if that is not necessary?
(3) If so, did the Premier mislead this house and the Western Australian community when he claimed credit on 1 April 2008 for cutting the price of the 20-year coal contract commencing in 2010 from $65 to $30? Mr A.J. CARPENTER replied: I thank the member for the question. (1)-(3) No, I did not mislead the Parliament then or at any other time. I do not think anyone seriously thinks I did. I really think we have a problem, in that I do not think the member understands what has happened here. I really do not. However, I will use this informal note I have as the basis for my response, if I may. The key point is that tariffs cannot be set, this note tells me, using a coal price assumption based on a contract that Western Power Corporation signed in August 2005—the contract that was assigned to Verve Energy at disaggregation. There are multiple generators in the market and the tariffs need to be set based on market prices for fuel. Verve Energy is but one generator using coal, and the tariff must reflect the market price for coal. The tariff review was based on the market price for coal that assumes coal producers will shadow price to gas. Can I try to sort out the opposition’s position? Does the shadow Treasurer believe there is substantial upward pressure on power prices? Dr S.C. Thomas : I believe there is upward pressure on power prices. Mr A.J. CARPENTER : If he were in government, would he not support Verve Energy in the interim until it can achieve cost-reflective pricing? Dr S.C. Thomas : If we were in government, we would provide an honest report that gives an honest position about where coal prices are heading and what electricity prices should be. We would not be hiding behind a report that you cannot even verify in here. If you think that statement is accurate, say it. Mr A.J. CARPENTER : While I am on my feet, may I acknowledge and welcome the students in the public gallery from Kolbe Catholic College. I apologise for not having already done so. There is a sort of convoluted logic in what the shadow Treasurer is suggesting. He is suggesting that the government is using sleight of hand to slug the taxpayer. Is that what he is saying? Dr S.C. Thomas : I am saying that you have to explain whether Verve Energy will be losing more like $375 million a year because you have an extra $2 billion effectively going into the budget over that period. Mr A.J. CARPENTER : Two million? Dr S.C. Thomas : Two billion dollars is effectively going into the budget over that period. Read the MPI from yesterday and find out where the government is putting the money. Either Verve Energy is losing a lot more than you are telling the Western Australian public or you are pulling a fiddle. I think you might be pulling a fiddle on the people of Western Australia. It would not be the first one the Labor party has been playing. Mr A.J. CARPENTER : I think I would be a foolish leader to be telling people that they are going to have to pay higher electricity prices than what we think they really need to pay. If the shadow Treasurer looks at the strategy we have adopted to address the situation, he will see that the underlying logic is that we do not want people to have to pay more for their energy bills in huge jumps all at once. Dr S.C. Thomas : You are spreading the huge jumps over a longer period. Mr A.J. CARPENTER : So we are spreading the pain over a more reasonable period. Dr S.C. Thomas : I’m not arguing with that. Mr A.J. CARPENTER : It would be a strange logic, would it not, for me to impose economic pain on the people of Western Australia and, before the next election, tell them that is what I am going to do, even though that change will not occur until well after the next election? Why would I come out well in advance of the next election and tell people that, after the next election, we will have to substantially increase energy prices, if that is not necessary?
Mr A.J. CARPENTER replied: I thank the member for the question. (1)-(3) No, I did not mislead the Parliament then or at any other time. I do not think anyone seriously thinks I did. I really think we have a problem, in that I do not think the member understands what has happened here. I really do not. However, I will use this informal note I have as the basis for my response, if I may. The key point is that tariffs cannot be set, this note tells me, using a coal price assumption based on a contract that Western Power Corporation signed in August 2005—the contract that was assigned to Verve Energy at disaggregation. There are multiple generators in the market and the tariffs need to be set based on market prices for fuel. Verve Energy is but one generator using coal, and the tariff must reflect the market price for coal. The tariff review was based on the market price for coal that assumes coal producers will shadow price to gas. Can I try to sort out the opposition’s position? Does the shadow Treasurer believe there is substantial upward pressure on power prices? Dr S.C. Thomas : I believe there is upward pressure on power prices. Mr A.J. CARPENTER : If he were in government, would he not support Verve Energy in the interim until it can achieve cost-reflective pricing? Dr S.C. Thomas : If we were in government, we would provide an honest report that gives an honest position about where coal prices are heading and what electricity prices should be. We would not be hiding behind a report that you cannot even verify in here. If you think that statement is accurate, say it. Mr A.J. CARPENTER : While I am on my feet, may I acknowledge and welcome the students in the public gallery from Kolbe Catholic College. I apologise for not having already done so. There is a sort of convoluted logic in what the shadow Treasurer is suggesting. He is suggesting that the government is using sleight of hand to slug the taxpayer. Is that what he is saying? Dr S.C. Thomas : I am saying that you have to explain whether Verve Energy will be losing more like $375 million a year because you have an extra $2 billion effectively going into the budget over that period. Mr A.J. CARPENTER : Two million? Dr S.C. Thomas : Two billion dollars is effectively going into the budget over that period. Read the MPI from yesterday and find out where the government is putting the money. Either Verve Energy is losing a lot more than you are telling the Western Australian public or you are pulling a fiddle. I think you might be pulling a fiddle on the people of Western Australia. It would not be the first one the Labor party has been playing. Mr A.J. CARPENTER : I think I would be a foolish leader to be telling people that they are going to have to pay higher electricity prices than what we think they really need to pay. If the shadow Treasurer looks at the strategy we have adopted to address the situation, he will see that the underlying logic is that we do not want people to have to pay more for their energy bills in huge jumps all at once. Dr S.C. Thomas : You are spreading the huge jumps over a longer period. Mr A.J. CARPENTER : So we are spreading the pain over a more reasonable period. Dr S.C. Thomas : I’m not arguing with that. Mr A.J. CARPENTER : It would be a strange logic, would it not, for me to impose economic pain on the people of Western Australia and, before the next election, tell them that is what I am going to do, even though that change will not occur until well after the next election? Why would I come out well in advance of the next election and tell people that, after the next election, we will have to substantially increase energy prices, if that is not necessary?
I thank the member for the question. (1)-(3) No, I did not mislead the Parliament then or at any other time. I do not think anyone seriously thinks I did. I really think we have a problem, in that I do not think the member understands what has happened here. I really do not. However, I will use this informal note I have as the basis for my response, if I may. The key point is that tariffs cannot be set, this note tells me, using a coal price assumption based on a contract that Western Power Corporation signed in August 2005—the contract that was assigned to Verve Energy at disaggregation. There are multiple generators in the market and the tariffs need to be set based on market prices for fuel. Verve Energy is but one generator using coal, and the tariff must reflect the market price for coal. The tariff review was based on the market price for coal that assumes coal producers will shadow price to gas. Can I try to sort out the opposition’s position? Does the shadow Treasurer believe there is substantial upward pressure on power prices? Dr S.C. Thomas : I believe there is upward pressure on power prices. Mr A.J. CARPENTER : If he were in government, would he not support Verve Energy in the interim until it can achieve cost-reflective pricing? Dr S.C. Thomas : If we were in government, we would provide an honest report that gives an honest position about where coal prices are heading and what electricity prices should be. We would not be hiding behind a report that you cannot even verify in here. If you think that statement is accurate, say it. Mr A.J. CARPENTER : While I am on my feet, may I acknowledge and welcome the students in the public gallery from Kolbe Catholic College. I apologise for not having already done so. There is a sort of convoluted logic in what the shadow Treasurer is suggesting. He is suggesting that the government is using sleight of hand to slug the taxpayer. Is that what he is saying? Dr S.C. Thomas : I am saying that you have to explain whether Verve Energy will be losing more like $375 million a year because you have an extra $2 billion effectively going into the budget over that period. Mr A.J. CARPENTER : Two million? Dr S.C. Thomas : Two billion dollars is effectively going into the budget over that period. Read the MPI from yesterday and find out where the government is putting the money. Either Verve Energy is losing a lot more than you are telling the Western Australian public or you are pulling a fiddle. I think you might be pulling a fiddle on the people of Western Australia. It would not be the first one the Labor party has been playing. Mr A.J. CARPENTER : I think I would be a foolish leader to be telling people that they are going to have to pay higher electricity prices than what we think they really need to pay. If the shadow Treasurer looks at the strategy we have adopted to address the situation, he will see that the underlying logic is that we do not want people to have to pay more for their energy bills in huge jumps all at once. Dr S.C. Thomas : You are spreading the huge jumps over a longer period. Mr A.J. CARPENTER : So we are spreading the pain over a more reasonable period. Dr S.C. Thomas : I’m not arguing with that. Mr A.J. CARPENTER : It would be a strange logic, would it not, for me to impose economic pain on the people of Western Australia and, before the next election, tell them that is what I am going to do, even though that change will not occur until well after the next election? Why would I come out well in advance of the next election and tell people that, after the next election, we will have to substantially increase energy prices, if that is not necessary?
(1)-(3) No, I did not mislead the Parliament then or at any other time. I do not think anyone seriously thinks I did. I really think we have a problem, in that I do not think the member understands what has happened here. I really do not. However, I will use this informal note I have as the basis for my response, if I may. The key point is that tariffs cannot be set, this note tells me, using a coal price assumption based on a contract that Western Power Corporation signed in August 2005—the contract that was assigned to Verve Energy at disaggregation. There are multiple generators in the market and the tariffs need to be set based on market prices for fuel. Verve Energy is but one generator using coal, and the tariff must reflect the market price for coal. The tariff review was based on the market price for coal that assumes coal producers will shadow price to gas. Can I try to sort out the opposition’s position? Does the shadow Treasurer believe there is substantial upward pressure on power prices? Dr S.C. Thomas : I believe there is upward pressure on power prices. Mr A.J. CARPENTER : If he were in government, would he not support Verve Energy in the interim until it can achieve cost-reflective pricing? Dr S.C. Thomas : If we were in government, we would provide an honest report that gives an honest position about where coal prices are heading and what electricity prices should be. We would not be hiding behind a report that you cannot even verify in here. If you think that statement is accurate, say it. Mr A.J. CARPENTER : While I am on my feet, may I acknowledge and welcome the students in the public gallery from Kolbe Catholic College. I apologise for not having already done so. There is a sort of convoluted logic in what the shadow Treasurer is suggesting. He is suggesting that the government is using sleight of hand to slug the taxpayer. Is that what he is saying? Dr S.C. Thomas : I am saying that you have to explain whether Verve Energy will be losing more like $375 million a year because you have an extra $2 billion effectively going into the budget over that period. Mr A.J. CARPENTER : Two million? Dr S.C. Thomas : Two billion dollars is effectively going into the budget over that period. Read the MPI from yesterday and find out where the government is putting the money. Either Verve Energy is losing a lot more than you are telling the Western Australian public or you are pulling a fiddle. I think you might be pulling a fiddle on the people of Western Australia. It would not be the first one the Labor party has been playing. Mr A.J. CARPENTER : I think I would be a foolish leader to be telling people that they are going to have to pay higher electricity prices than what we think they really need to pay. If the shadow Treasurer looks at the strategy we have adopted to address the situation, he will see that the underlying logic is that we do not want people to have to pay more for their energy bills in huge jumps all at once. Dr S.C. Thomas : You are spreading the huge jumps over a longer period. Mr A.J. CARPENTER : So we are spreading the pain over a more reasonable period. Dr S.C. Thomas : I’m not arguing with that. Mr A.J. CARPENTER : It would be a strange logic, would it not, for me to impose economic pain on the people of Western Australia and, before the next election, tell them that is what I am going to do, even though that change will not occur until well after the next election? Why would I come out well in advance of the next election and tell people that, after the next election, we will have to substantially increase energy prices, if that is not necessary?
Mr A.J. CARPENTER : If he were in government, would he not support Verve Energy in the interim until it can achieve cost-reflective pricing? Dr S.C. Thomas : If we were in government, we would provide an honest report that gives an honest position about where coal prices are heading and what electricity prices should be. We would not be hiding behind a report that you cannot even verify in here. If you think that statement is accurate, say it. Mr A.J. CARPENTER : While I am on my feet, may I acknowledge and welcome the students in the public gallery from Kolbe Catholic College. I apologise for not having already done so. There is a sort of convoluted logic in what the shadow Treasurer is suggesting. He is suggesting that the government is using sleight of hand to slug the taxpayer. Is that what he is saying? Dr S.C. Thomas : I am saying that you have to explain whether Verve Energy will be losing more like $375 million a year because you have an extra $2 billion effectively going into the budget over that period. Mr A.J. CARPENTER : Two million? Dr S.C. Thomas : Two billion dollars is effectively going into the budget over that period. Read the MPI from yesterday and find out where the government is putting the money. Either Verve Energy is losing a lot more than you are telling the Western Australian public or you are pulling a fiddle. I think you might be pulling a fiddle on the people of Western Australia. It would not be the first one the Labor party has been playing. Mr A.J. CARPENTER : I think I would be a foolish leader to be telling people that they are going to have to pay higher electricity prices than what we think they really need to pay. If the shadow Treasurer looks at the strategy we have adopted to address the situation, he will see that the underlying logic is that we do not want people to have to pay more for their energy bills in huge jumps all at once. Dr S.C. Thomas : You are spreading the huge jumps over a longer period. Mr A.J. CARPENTER : So we are spreading the pain over a more reasonable period. Dr S.C. Thomas : I’m not arguing with that. Mr A.J. CARPENTER : It would be a strange logic, would it not, for me to impose economic pain on the people of Western Australia and, before the next election, tell them that is what I am going to do, even though that change will not occur until well after the next election? Why would I come out well in advance of the next election and tell people that, after the next election, we will have to substantially increase energy prices, if that is not necessary?
Dr S.C. Thomas : If we were in government, we would provide an honest report that gives an honest position about where coal prices are heading and what electricity prices should be. We would not be hiding behind a report that you cannot even verify in here. If you think that statement is accurate, say it. Mr A.J. CARPENTER : While I am on my feet, may I acknowledge and welcome the students in the public gallery from Kolbe Catholic College. I apologise for not having already done so. There is a sort of convoluted logic in what the shadow Treasurer is suggesting. He is suggesting that the government is using sleight of hand to slug the taxpayer. Is that what he is saying? Dr S.C. Thomas : I am saying that you have to explain whether Verve Energy will be losing more like $375 million a year because you have an extra $2 billion effectively going into the budget over that period. Mr A.J. CARPENTER : Two million? Dr S.C. Thomas : Two billion dollars is effectively going into the budget over that period. Read the MPI from yesterday and find out where the government is putting the money. Either Verve Energy is losing a lot more than you are telling the Western Australian public or you are pulling a fiddle. I think you might be pulling a fiddle on the people of Western Australia. It would not be the first one the Labor party has been playing. Mr A.J. CARPENTER : I think I would be a foolish leader to be telling people that they are going to have to pay higher electricity prices than what we think they really need to pay. If the shadow Treasurer looks at the strategy we have adopted to address the situation, he will see that the underlying logic is that we do not want people to have to pay more for their energy bills in huge jumps all at once. Dr S.C. Thomas : You are spreading the huge jumps over a longer period. Mr A.J. CARPENTER : So we are spreading the pain over a more reasonable period. Dr S.C. Thomas : I’m not arguing with that. Mr A.J. CARPENTER : It would be a strange logic, would it not, for me to impose economic pain on the people of Western Australia and, before the next election, tell them that is what I am going to do, even though that change will not occur until well after the next election? Why would I come out well in advance of the next election and tell people that, after the next election, we will have to substantially increase energy prices, if that is not necessary?
Mr A.J. CARPENTER : While I am on my feet, may I acknowledge and welcome the students in the public gallery from Kolbe Catholic College. I apologise for not having already done so. There is a sort of convoluted logic in what the shadow Treasurer is suggesting. He is suggesting that the government is using sleight of hand to slug the taxpayer. Is that what he is saying? Dr S.C. Thomas : I am saying that you have to explain whether Verve Energy will be losing more like $375 million a year because you have an extra $2 billion effectively going into the budget over that period. Mr A.J. CARPENTER : Two million? Dr S.C. Thomas : Two billion dollars is effectively going into the budget over that period. Read the MPI from yesterday and find out where the government is putting the money. Either Verve Energy is losing a lot more than you are telling the Western Australian public or you are pulling a fiddle. I think you might be pulling a fiddle on the people of Western Australia. It would not be the first one the Labor party has been playing. Mr A.J. CARPENTER : I think I would be a foolish leader to be telling people that they are going to have to pay higher electricity prices than what we think they really need to pay. If the shadow Treasurer looks at the strategy we have adopted to address the situation, he will see that the underlying logic is that we do not want people to have to pay more for their energy bills in huge jumps all at once. Dr S.C. Thomas : You are spreading the huge jumps over a longer period. Mr A.J. CARPENTER : So we are spreading the pain over a more reasonable period. Dr S.C. Thomas : I’m not arguing with that. Mr A.J. CARPENTER : It would be a strange logic, would it not, for me to impose economic pain on the people of Western Australia and, before the next election, tell them that is what I am going to do, even though that change will not occur until well after the next election? Why would I come out well in advance of the next election and tell people that, after the next election, we will have to substantially increase energy prices, if that is not necessary?
There is a sort of convoluted logic in what the shadow Treasurer is suggesting. He is suggesting that the government is using sleight of hand to slug the taxpayer. Is that what he is saying? Dr S.C. Thomas : I am saying that you have to explain whether Verve Energy will be losing more like $375 million a year because you have an extra $2 billion effectively going into the budget over that period. Mr A.J. CARPENTER : Two million? Dr S.C. Thomas : Two billion dollars is effectively going into the budget over that period. Read the MPI from yesterday and find out where the government is putting the money. Either Verve Energy is losing a lot more than you are telling the Western Australian public or you are pulling a fiddle. I think you might be pulling a fiddle on the people of Western Australia. It would not be the first one the Labor party has been playing. Mr A.J. CARPENTER : I think I would be a foolish leader to be telling people that they are going to have to pay higher electricity prices than what we think they really need to pay. If the shadow Treasurer looks at the strategy we have adopted to address the situation, he will see that the underlying logic is that we do not want people to have to pay more for their energy bills in huge jumps all at once. Dr S.C. Thomas : You are spreading the huge jumps over a longer period. Mr A.J. CARPENTER : So we are spreading the pain over a more reasonable period. Dr S.C. Thomas : I’m not arguing with that. Mr A.J. CARPENTER : It would be a strange logic, would it not, for me to impose economic pain on the people of Western Australia and, before the next election, tell them that is what I am going to do, even though that change will not occur until well after the next election? Why would I come out well in advance of the next election and tell people that, after the next election, we will have to substantially increase energy prices, if that is not necessary?
Dr S.C. Thomas : I am saying that you have to explain whether Verve Energy will be losing more like $375 million a year because you have an extra $2 billion effectively going into the budget over that period. Mr A.J. CARPENTER : Two million? Dr S.C. Thomas : Two billion dollars is effectively going into the budget over that period. Read the MPI from yesterday and find out where the government is putting the money. Either Verve Energy is losing a lot more than you are telling the Western Australian public or you are pulling a fiddle. I think you might be pulling a fiddle on the people of Western Australia. It would not be the first one the Labor party has been playing. Mr A.J. CARPENTER : I think I would be a foolish leader to be telling people that they are going to have to pay higher electricity prices than what we think they really need to pay. If the shadow Treasurer looks at the strategy we have adopted to address the situation, he will see that the underlying logic is that we do not want people to have to pay more for their energy bills in huge jumps all at once. Dr S.C. Thomas : You are spreading the huge jumps over a longer period. Mr A.J. CARPENTER : So we are spreading the pain over a more reasonable period. Dr S.C. Thomas : I’m not arguing with that. Mr A.J. CARPENTER : It would be a strange logic, would it not, for me to impose economic pain on the people of Western Australia and, before the next election, tell them that is what I am going to do, even though that change will not occur until well after the next election? Why would I come out well in advance of the next election and tell people that, after the next election, we will have to substantially increase energy prices, if that is not necessary?
Mr A.J. CARPENTER : Two million? Dr S.C. Thomas : Two billion dollars is effectively going into the budget over that period. Read the MPI from yesterday and find out where the government is putting the money. Either Verve Energy is losing a lot more than you are telling the Western Australian public or you are pulling a fiddle. I think you might be pulling a fiddle on the people of Western Australia. It would not be the first one the Labor party has been playing. Mr A.J. CARPENTER : I think I would be a foolish leader to be telling people that they are going to have to pay higher electricity prices than what we think they really need to pay. If the shadow Treasurer looks at the strategy we have adopted to address the situation, he will see that the underlying logic is that we do not want people to have to pay more for their energy bills in huge jumps all at once. Dr S.C. Thomas : You are spreading the huge jumps over a longer period. Mr A.J. CARPENTER : So we are spreading the pain over a more reasonable period. Dr S.C. Thomas : I’m not arguing with that. Mr A.J. CARPENTER : It would be a strange logic, would it not, for me to impose economic pain on the people of Western Australia and, before the next election, tell them that is what I am going to do, even though that change will not occur until well after the next election? Why would I come out well in advance of the next election and tell people that, after the next election, we will have to substantially increase energy prices, if that is not necessary?
Dr S.C. Thomas : Two billion dollars is effectively going into the budget over that period. Read the MPI from yesterday and find out where the government is putting the money. Either Verve Energy is losing a lot more than you are telling the Western Australian public or you are pulling a fiddle. I think you might be pulling a fiddle on the people of Western Australia. It would not be the first one the Labor party has been playing. Mr A.J. CARPENTER : I think I would be a foolish leader to be telling people that they are going to have to pay higher electricity prices than what we think they really need to pay. If the shadow Treasurer looks at the strategy we have adopted to address the situation, he will see that the underlying logic is that we do not want people to have to pay more for their energy bills in huge jumps all at once. Dr S.C. Thomas : You are spreading the huge jumps over a longer period. Mr A.J. CARPENTER : So we are spreading the pain over a more reasonable period. Dr S.C. Thomas : I’m not arguing with that. Mr A.J. CARPENTER : It would be a strange logic, would it not, for me to impose economic pain on the people of Western Australia and, before the next election, tell them that is what I am going to do, even though that change will not occur until well after the next election? Why would I come out well in advance of the next election and tell people that, after the next election, we will have to substantially increase energy prices, if that is not necessary?
Mr A.J. CARPENTER : I think I would be a foolish leader to be telling people that they are going to have to pay higher electricity prices than what we think they really need to pay. If the shadow Treasurer looks at the strategy we have adopted to address the situation, he will see that the underlying logic is that we do not want people to have to pay more for their energy bills in huge jumps all at once. Dr S.C. Thomas : You are spreading the huge jumps over a longer period. Mr A.J. CARPENTER : So we are spreading the pain over a more reasonable period. Dr S.C. Thomas : I’m not arguing with that. Mr A.J. CARPENTER : It would be a strange logic, would it not, for me to impose economic pain on the people of Western Australia and, before the next election, tell them that is what I am going to do, even though that change will not occur until well after the next election? Why would I come out well in advance of the next election and tell people that, after the next election, we will have to substantially increase energy prices, if that is not necessary?
Dr S.C. Thomas : You are spreading the huge jumps over a longer period. Mr A.J. CARPENTER : So we are spreading the pain over a more reasonable period. Dr S.C. Thomas : I’m not arguing with that. Mr A.J. CARPENTER : It would be a strange logic, would it not, for me to impose economic pain on the people of Western Australia and, before the next election, tell them that is what I am going to do, even though that change will not occur until well after the next election? Why would I come out well in advance of the next election and tell people that, after the next election, we will have to substantially increase energy prices, if that is not necessary?
Mr A.J. CARPENTER : So we are spreading the pain over a more reasonable period. Dr S.C. Thomas : I’m not arguing with that. Mr A.J. CARPENTER : It would be a strange logic, would it not, for me to impose economic pain on the people of Western Australia and, before the next election, tell them that is what I am going to do, even though that change will not occur until well after the next election? Why would I come out well in advance of the next election and tell people that, after the next election, we will have to substantially increase energy prices, if that is not necessary?
Dr S.C. Thomas : I’m not arguing with that. Mr A.J. CARPENTER : It would be a strange logic, would it not, for me to impose economic pain on the people of Western Australia and, before the next election, tell them that is what I am going to do, even though that change will not occur until well after the next election? Why would I come out well in advance of the next election and tell people that, after the next election, we will have to substantially increase energy prices, if that is not necessary?
Mr A.J. CARPENTER : It would be a strange logic, would it not, for me to impose economic pain on the people of Western Australia and, before the next election, tell them that is what I am going to do, even though that change will not occur until well after the next election? Why would I come out well in advance of the next election and tell people that, after the next election, we will have to substantially increase energy prices, if that is not necessary?
(1) Does this statement apply to Verve Energy? (2) Will coal prices paid by Verve Energy increase significantly in the near future? (3) If so, did the Premier mislead this house and the Western Australian community when he claimed credit on 1 April 2008 for cutting the price of the 20-year coal contract commencing in 2010 from $65 to $30? Mr A.J. CARPENTER replied: I thank the member for the question. (1)-(3) No, I did not mislead the Parliament then or at any other time. I do not think anyone seriously thinks I did. I really think we have a problem, in that I do not think the member understands what has happened here. I really do not. However, I will use this informal note I have as the basis for my response, if I may. The key point is that tariffs cannot be set, this note tells me, using a coal price assumption based on a contract that Western Power Corporation signed in August 2005—the contract that was assigned to Verve Energy at disaggregation. There are multiple generators in the market and the tariffs need to be set based on market prices for fuel. Verve Energy is but one generator using coal, and the tariff must reflect the market price for coal. The tariff review was based on the market price for coal that assumes coal producers will shadow price to gas. Can I try to sort out the opposition’s position? Does the shadow Treasurer believe there is substantial upward pressure on power prices? Dr S.C. Thomas : I believe there is upward pressure on power prices. Mr A.J. CARPENTER : If he were in government, would he not support Verve Energy in the interim until it can achieve cost-reflective pricing? Dr S.C. Thomas : If we were in government, we would provide an honest report that gives an honest position about where coal prices are heading and what electricity prices should be. We would not be hiding behind a report that you cannot even verify in here. If you think that statement is accurate, say it. Mr A.J. CARPENTER : While I am on my feet, may I acknowledge and welcome the students in the public gallery from Kolbe Catholic College. I apologise for not having already done so. There is a sort of convoluted logic in what the shadow Treasurer is suggesting. He is suggesting that the government is using sleight of hand to slug the taxpayer. Is that what he is saying? Dr S.C. Thomas : I am saying that you have to explain whether Verve Energy will be losing more like $375 million a year because you have an extra $2 billion effectively going into the budget over that period. Mr A.J. CARPENTER : Two million? Dr S.C. Thomas : Two billion dollars is effectively going into the budget over that period. Read the MPI from yesterday and find out where the government is putting the money. Either Verve Energy is losing a lot more than you are telling the Western Australian public or you are pulling a fiddle. I think you might be pulling a fiddle on the people of Western Australia. It would not be the first one the Labor party has been playing. Mr A.J. CARPENTER : I think I would be a foolish leader to be telling people that they are going to have to pay higher electricity prices than what we think they really need to pay. If the shadow Treasurer looks at the strategy we have adopted to address the situation, he will see that the underlying logic is that we do not want people to have to pay more for their energy bills in huge jumps all at once. Dr S.C. Thomas : You are spreading the huge jumps over a longer period. Mr A.J. CARPENTER : So we are spreading the pain over a more reasonable period. Dr S.C. Thomas : I’m not arguing with that. Mr A.J. CARPENTER : It would be a strange logic, would it not, for me to impose economic pain on the people of Western Australia and, before the next election, tell them that is what I am going to do, even though that change will not occur until well after the next election? Why would I come out well in advance of the next election and tell people that, after the next election, we will have to substantially increase energy prices, if that is not necessary?
(2) Will coal prices paid by Verve Energy increase significantly in the near future? (3) If so, did the Premier mislead this house and the Western Australian community when he claimed credit on 1 April 2008 for cutting the price of the 20-year coal contract commencing in 2010 from $65 to $30? Mr A.J. CARPENTER replied: I thank the member for the question. (1)-(3) No, I did not mislead the Parliament then or at any other time. I do not think anyone seriously thinks I did. I really think we have a problem, in that I do not think the member understands what has happened here. I really do not. However, I will use this informal note I have as the basis for my response, if I may. The key point is that tariffs cannot be set, this note tells me, using a coal price assumption based on a contract that Western Power Corporation signed in August 2005—the contract that was assigned to Verve Energy at disaggregation. There are multiple generators in the market and the tariffs need to be set based on market prices for fuel. Verve Energy is but one generator using coal, and the tariff must reflect the market price for coal. The tariff review was based on the market price for coal that assumes coal producers will shadow price to gas. Can I try to sort out the opposition’s position? Does the shadow Treasurer believe there is substantial upward pressure on power prices? Dr S.C. Thomas : I believe there is upward pressure on power prices. Mr A.J. CARPENTER : If he were in government, would he not support Verve Energy in the interim until it can achieve cost-reflective pricing? Dr S.C. Thomas : If we were in government, we would provide an honest report that gives an honest position about where coal prices are heading and what electricity prices should be. We would not be hiding behind a report that you cannot even verify in here. If you think that statement is accurate, say it. Mr A.J. CARPENTER : While I am on my feet, may I acknowledge and welcome the students in the public gallery from Kolbe Catholic College. I apologise for not having already done so. There is a sort of convoluted logic in what the shadow Treasurer is suggesting. He is suggesting that the government is using sleight of hand to slug the taxpayer. Is that what he is saying? Dr S.C. Thomas : I am saying that you have to explain whether Verve Energy will be losing more like $375 million a year because you have an extra $2 billion effectively going into the budget over that period. Mr A.J. CARPENTER : Two million? Dr S.C. Thomas : Two billion dollars is effectively going into the budget over that period. Read the MPI from yesterday and find out where the government is putting the money. Either Verve Energy is losing a lot more than you are telling the Western Australian public or you are pulling a fiddle. I think you might be pulling a fiddle on the people of Western Australia. It would not be the first one the Labor party has been playing. Mr A.J. CARPENTER : I think I would be a foolish leader to be telling people that they are going to have to pay higher electricity prices than what we think they really need to pay. If the shadow Treasurer looks at the strategy we have adopted to address the situation, he will see that the underlying logic is that we do not want people to have to pay more for their energy bills in huge jumps all at once. Dr S.C. Thomas : You are spreading the huge jumps over a longer period. Mr A.J. CARPENTER : So we are spreading the pain over a more reasonable period. Dr S.C. Thomas : I’m not arguing with that. Mr A.J. CARPENTER : It would be a strange logic, would it not, for me to impose economic pain on the people of Western Australia and, before the next election, tell them that is what I am going to do, even though that change will not occur until well after the next election? Why would I come out well in advance of the next election and tell people that, after the next election, we will have to substantially increase energy prices, if that is not necessary?
(3) If so, did the Premier mislead this house and the Western Australian community when he claimed credit on 1 April 2008 for cutting the price of the 20-year coal contract commencing in 2010 from $65 to $30? Mr A.J. CARPENTER replied: I thank the member for the question. (1)-(3) No, I did not mislead the Parliament then or at any other time. I do not think anyone seriously thinks I did. I really think we have a problem, in that I do not think the member understands what has happened here. I really do not. However, I will use this informal note I have as the basis for my response, if I may. The key point is that tariffs cannot be set, this note tells me, using a coal price assumption based on a contract that Western Power Corporation signed in August 2005—the contract that was assigned to Verve Energy at disaggregation. There are multiple generators in the market and the tariffs need to be set based on market prices for fuel. Verve Energy is but one generator using coal, and the tariff must reflect the market price for coal. The tariff review was based on the market price for coal that assumes coal producers will shadow price to gas. Can I try to sort out the opposition’s position? Does the shadow Treasurer believe there is substantial upward pressure on power prices? Dr S.C. Thomas : I believe there is upward pressure on power prices. Mr A.J. CARPENTER : If he were in government, would he not support Verve Energy in the interim until it can achieve cost-reflective pricing? Dr S.C. Thomas : If we were in government, we would provide an honest report that gives an honest position about where coal prices are heading and what electricity prices should be. We would not be hiding behind a report that you cannot even verify in here. If you think that statement is accurate, say it. Mr A.J. CARPENTER : While I am on my feet, may I acknowledge and welcome the students in the public gallery from Kolbe Catholic College. I apologise for not having already done so. There is a sort of convoluted logic in what the shadow Treasurer is suggesting. He is suggesting that the government is using sleight of hand to slug the taxpayer. Is that what he is saying? Dr S.C. Thomas : I am saying that you have to explain whether Verve Energy will be losing more like $375 million a year because you have an extra $2 billion effectively going into the budget over that period. Mr A.J. CARPENTER : Two million? Dr S.C. Thomas : Two billion dollars is effectively going into the budget over that period. Read the MPI from yesterday and find out where the government is putting the money. Either Verve Energy is losing a lot more than you are telling the Western Australian public or you are pulling a fiddle. I think you might be pulling a fiddle on the people of Western Australia. It would not be the first one the Labor party has been playing. Mr A.J. CARPENTER : I think I would be a foolish leader to be telling people that they are going to have to pay higher electricity prices than what we think they really need to pay. If the shadow Treasurer looks at the strategy we have adopted to address the situation, he will see that the underlying logic is that we do not want people to have to pay more for their energy bills in huge jumps all at once. Dr S.C. Thomas : You are spreading the huge jumps over a longer period. Mr A.J. CARPENTER : So we are spreading the pain over a more reasonable period. Dr S.C. Thomas : I’m not arguing with that. Mr A.J. CARPENTER : It would be a strange logic, would it not, for me to impose economic pain on the people of Western Australia and, before the next election, tell them that is what I am going to do, even though that change will not occur until well after the next election? Why would I come out well in advance of the next election and tell people that, after the next election, we will have to substantially increase energy prices, if that is not necessary?
Mr A.J. CARPENTER replied: I thank the member for the question. (1)-(3) No, I did not mislead the Parliament then or at any other time. I do not think anyone seriously thinks I did. I really think we have a problem, in that I do not think the member understands what has happened here. I really do not. However, I will use this informal note I have as the basis for my response, if I may. The key point is that tariffs cannot be set, this note tells me, using a coal price assumption based on a contract that Western Power Corporation signed in August 2005—the contract that was assigned to Verve Energy at disaggregation. There are multiple generators in the market and the tariffs need to be set based on market prices for fuel. Verve Energy is but one generator using coal, and the tariff must reflect the market price for coal. The tariff review was based on the market price for coal that assumes coal producers will shadow price to gas. Can I try to sort out the opposition’s position? Does the shadow Treasurer believe there is substantial upward pressure on power prices? Dr S.C. Thomas : I believe there is upward pressure on power prices. Mr A.J. CARPENTER : If he were in government, would he not support Verve Energy in the interim until it can achieve cost-reflective pricing? Dr S.C. Thomas : If we were in government, we would provide an honest report that gives an honest position about where coal prices are heading and what electricity prices should be. We would not be hiding behind a report that you cannot even verify in here. If you think that statement is accurate, say it. Mr A.J. CARPENTER : While I am on my feet, may I acknowledge and welcome the students in the public gallery from Kolbe Catholic College. I apologise for not having already done so. There is a sort of convoluted logic in what the shadow Treasurer is suggesting. He is suggesting that the government is using sleight of hand to slug the taxpayer. Is that what he is saying? Dr S.C. Thomas : I am saying that you have to explain whether Verve Energy will be losing more like $375 million a year because you have an extra $2 billion effectively going into the budget over that period. Mr A.J. CARPENTER : Two million? Dr S.C. Thomas : Two billion dollars is effectively going into the budget over that period. Read the MPI from yesterday and find out where the government is putting the money. Either Verve Energy is losing a lot more than you are telling the Western Australian public or you are pulling a fiddle. I think you might be pulling a fiddle on the people of Western Australia. It would not be the first one the Labor party has been playing. Mr A.J. CARPENTER : I think I would be a foolish leader to be telling people that they are going to have to pay higher electricity prices than what we think they really need to pay. If the shadow Treasurer looks at the strategy we have adopted to address the situation, he will see that the underlying logic is that we do not want people to have to pay more for their energy bills in huge jumps all at once. Dr S.C. Thomas : You are spreading the huge jumps over a longer period. Mr A.J. CARPENTER : So we are spreading the pain over a more reasonable period. Dr S.C. Thomas : I’m not arguing with that. Mr A.J. CARPENTER : It would be a strange logic, would it not, for me to impose economic pain on the people of Western Australia and, before the next election, tell them that is what I am going to do, even though that change will not occur until well after the next election? Why would I come out well in advance of the next election and tell people that, after the next election, we will have to substantially increase energy prices, if that is not necessary?
I thank the member for the question. (1)-(3) No, I did not mislead the Parliament then or at any other time. I do not think anyone seriously thinks I did. I really think we have a problem, in that I do not think the member understands what has happened here. I really do not. However, I will use this informal note I have as the basis for my response, if I may. The key point is that tariffs cannot be set, this note tells me, using a coal price assumption based on a contract that Western Power Corporation signed in August 2005—the contract that was assigned to Verve Energy at disaggregation. There are multiple generators in the market and the tariffs need to be set based on market prices for fuel. Verve Energy is but one generator using coal, and the tariff must reflect the market price for coal. The tariff review was based on the market price for coal that assumes coal producers will shadow price to gas. Can I try to sort out the opposition’s position? Does the shadow Treasurer believe there is substantial upward pressure on power prices? Dr S.C. Thomas : I believe there is upward pressure on power prices. Mr A.J. CARPENTER : If he were in government, would he not support Verve Energy in the interim until it can achieve cost-reflective pricing? Dr S.C. Thomas : If we were in government, we would provide an honest report that gives an honest position about where coal prices are heading and what electricity prices should be. We would not be hiding behind a report that you cannot even verify in here. If you think that statement is accurate, say it. Mr A.J. CARPENTER : While I am on my feet, may I acknowledge and welcome the students in the public gallery from Kolbe Catholic College. I apologise for not having already done so. There is a sort of convoluted logic in what the shadow Treasurer is suggesting. He is suggesting that the government is using sleight of hand to slug the taxpayer. Is that what he is saying? Dr S.C. Thomas : I am saying that you have to explain whether Verve Energy will be losing more like $375 million a year because you have an extra $2 billion effectively going into the budget over that period. Mr A.J. CARPENTER : Two million? Dr S.C. Thomas : Two billion dollars is effectively going into the budget over that period. Read the MPI from yesterday and find out where the government is putting the money. Either Verve Energy is losing a lot more than you are telling the Western Australian public or you are pulling a fiddle. I think you might be pulling a fiddle on the people of Western Australia. It would not be the first one the Labor party has been playing. Mr A.J. CARPENTER : I think I would be a foolish leader to be telling people that they are going to have to pay higher electricity prices than what we think they really need to pay. If the shadow Treasurer looks at the strategy we have adopted to address the situation, he will see that the underlying logic is that we do not want people to have to pay more for their energy bills in huge jumps all at once. Dr S.C. Thomas : You are spreading the huge jumps over a longer period. Mr A.J. CARPENTER : So we are spreading the pain over a more reasonable period. Dr S.C. Thomas : I’m not arguing with that. Mr A.J. CARPENTER : It would be a strange logic, would it not, for me to impose economic pain on the people of Western Australia and, before the next election, tell them that is what I am going to do, even though that change will not occur until well after the next election? Why would I come out well in advance of the next election and tell people that, after the next election, we will have to substantially increase energy prices, if that is not necessary?
(1)-(3) No, I did not mislead the Parliament then or at any other time. I do not think anyone seriously thinks I did. I really think we have a problem, in that I do not think the member understands what has happened here. I really do not. However, I will use this informal note I have as the basis for my response, if I may. The key point is that tariffs cannot be set, this note tells me, using a coal price assumption based on a contract that Western Power Corporation signed in August 2005—the contract that was assigned to Verve Energy at disaggregation. There are multiple generators in the market and the tariffs need to be set based on market prices for fuel. Verve Energy is but one generator using coal, and the tariff must reflect the market price for coal. The tariff review was based on the market price for coal that assumes coal producers will shadow price to gas. Can I try to sort out the opposition’s position? Does the shadow Treasurer believe there is substantial upward pressure on power prices? Dr S.C. Thomas : I believe there is upward pressure on power prices. Mr A.J. CARPENTER : If he were in government, would he not support Verve Energy in the interim until it can achieve cost-reflective pricing? Dr S.C. Thomas : If we were in government, we would provide an honest report that gives an honest position about where coal prices are heading and what electricity prices should be. We would not be hiding behind a report that you cannot even verify in here. If you think that statement is accurate, say it. Mr A.J. CARPENTER : While I am on my feet, may I acknowledge and welcome the students in the public gallery from Kolbe Catholic College. I apologise for not having already done so. There is a sort of convoluted logic in what the shadow Treasurer is suggesting. He is suggesting that the government is using sleight of hand to slug the taxpayer. Is that what he is saying? Dr S.C. Thomas : I am saying that you have to explain whether Verve Energy will be losing more like $375 million a year because you have an extra $2 billion effectively going into the budget over that period. Mr A.J. CARPENTER : Two million? Dr S.C. Thomas : Two billion dollars is effectively going into the budget over that period. Read the MPI from yesterday and find out where the government is putting the money. Either Verve Energy is losing a lot more than you are telling the Western Australian public or you are pulling a fiddle. I think you might be pulling a fiddle on the people of Western Australia. It would not be the first one the Labor party has been playing. Mr A.J. CARPENTER : I think I would be a foolish leader to be telling people that they are going to have to pay higher electricity prices than what we think they really need to pay. If the shadow Treasurer looks at the strategy we have adopted to address the situation, he will see that the underlying logic is that we do not want people to have to pay more for their energy bills in huge jumps all at once. Dr S.C. Thomas : You are spreading the huge jumps over a longer period. Mr A.J. CARPENTER : So we are spreading the pain over a more reasonable period. Dr S.C. Thomas : I’m not arguing with that. Mr A.J. CARPENTER : It would be a strange logic, would it not, for me to impose economic pain on the people of Western Australia and, before the next election, tell them that is what I am going to do, even though that change will not occur until well after the next election? Why would I come out well in advance of the next election and tell people that, after the next election, we will have to substantially increase energy prices, if that is not necessary?
Mr A.J. CARPENTER : If he were in government, would he not support Verve Energy in the interim until it can achieve cost-reflective pricing? Dr S.C. Thomas : If we were in government, we would provide an honest report that gives an honest position about where coal prices are heading and what electricity prices should be. We would not be hiding behind a report that you cannot even verify in here. If you think that statement is accurate, say it. Mr A.J. CARPENTER : While I am on my feet, may I acknowledge and welcome the students in the public gallery from Kolbe Catholic College. I apologise for not having already done so. There is a sort of convoluted logic in what the shadow Treasurer is suggesting. He is suggesting that the government is using sleight of hand to slug the taxpayer. Is that what he is saying? Dr S.C. Thomas : I am saying that you have to explain whether Verve Energy will be losing more like $375 million a year because you have an extra $2 billion effectively going into the budget over that period. Mr A.J. CARPENTER : Two million? Dr S.C. Thomas : Two billion dollars is effectively going into the budget over that period. Read the MPI from yesterday and find out where the government is putting the money. Either Verve Energy is losing a lot more than you are telling the Western Australian public or you are pulling a fiddle. I think you might be pulling a fiddle on the people of Western Australia. It would not be the first one the Labor party has been playing. Mr A.J. CARPENTER : I think I would be a foolish leader to be telling people that they are going to have to pay higher electricity prices than what we think they really need to pay. If the shadow Treasurer looks at the strategy we have adopted to address the situation, he will see that the underlying logic is that we do not want people to have to pay more for their energy bills in huge jumps all at once. Dr S.C. Thomas : You are spreading the huge jumps over a longer period. Mr A.J. CARPENTER : So we are spreading the pain over a more reasonable period. Dr S.C. Thomas : I’m not arguing with that. Mr A.J. CARPENTER : It would be a strange logic, would it not, for me to impose economic pain on the people of Western Australia and, before the next election, tell them that is what I am going to do, even though that change will not occur until well after the next election? Why would I come out well in advance of the next election and tell people that, after the next election, we will have to substantially increase energy prices, if that is not necessary?
Dr S.C. Thomas : If we were in government, we would provide an honest report that gives an honest position about where coal prices are heading and what electricity prices should be. We would not be hiding behind a report that you cannot even verify in here. If you think that statement is accurate, say it. Mr A.J. CARPENTER : While I am on my feet, may I acknowledge and welcome the students in the public gallery from Kolbe Catholic College. I apologise for not having already done so. There is a sort of convoluted logic in what the shadow Treasurer is suggesting. He is suggesting that the government is using sleight of hand to slug the taxpayer. Is that what he is saying? Dr S.C. Thomas : I am saying that you have to explain whether Verve Energy will be losing more like $375 million a year because you have an extra $2 billion effectively going into the budget over that period. Mr A.J. CARPENTER : Two million? Dr S.C. Thomas : Two billion dollars is effectively going into the budget over that period. Read the MPI from yesterday and find out where the government is putting the money. Either Verve Energy is losing a lot more than you are telling the Western Australian public or you are pulling a fiddle. I think you might be pulling a fiddle on the people of Western Australia. It would not be the first one the Labor party has been playing. Mr A.J. CARPENTER : I think I would be a foolish leader to be telling people that they are going to have to pay higher electricity prices than what we think they really need to pay. If the shadow Treasurer looks at the strategy we have adopted to address the situation, he will see that the underlying logic is that we do not want people to have to pay more for their energy bills in huge jumps all at once. Dr S.C. Thomas : You are spreading the huge jumps over a longer period. Mr A.J. CARPENTER : So we are spreading the pain over a more reasonable period. Dr S.C. Thomas : I’m not arguing with that. Mr A.J. CARPENTER : It would be a strange logic, would it not, for me to impose economic pain on the people of Western Australia and, before the next election, tell them that is what I am going to do, even though that change will not occur until well after the next election? Why would I come out well in advance of the next election and tell people that, after the next election, we will have to substantially increase energy prices, if that is not necessary?
Mr A.J. CARPENTER : While I am on my feet, may I acknowledge and welcome the students in the public gallery from Kolbe Catholic College. I apologise for not having already done so. There is a sort of convoluted logic in what the shadow Treasurer is suggesting. He is suggesting that the government is using sleight of hand to slug the taxpayer. Is that what he is saying? Dr S.C. Thomas : I am saying that you have to explain whether Verve Energy will be losing more like $375 million a year because you have an extra $2 billion effectively going into the budget over that period. Mr A.J. CARPENTER : Two million? Dr S.C. Thomas : Two billion dollars is effectively going into the budget over that period. Read the MPI from yesterday and find out where the government is putting the money. Either Verve Energy is losing a lot more than you are telling the Western Australian public or you are pulling a fiddle. I think you might be pulling a fiddle on the people of Western Australia. It would not be the first one the Labor party has been playing. Mr A.J. CARPENTER : I think I would be a foolish leader to be telling people that they are going to have to pay higher electricity prices than what we think they really need to pay. If the shadow Treasurer looks at the strategy we have adopted to address the situation, he will see that the underlying logic is that we do not want people to have to pay more for their energy bills in huge jumps all at once. Dr S.C. Thomas : You are spreading the huge jumps over a longer period. Mr A.J. CARPENTER : So we are spreading the pain over a more reasonable period. Dr S.C. Thomas : I’m not arguing with that. Mr A.J. CARPENTER : It would be a strange logic, would it not, for me to impose economic pain on the people of Western Australia and, before the next election, tell them that is what I am going to do, even though that change will not occur until well after the next election? Why would I come out well in advance of the next election and tell people that, after the next election, we will have to substantially increase energy prices, if that is not necessary?
There is a sort of convoluted logic in what the shadow Treasurer is suggesting. He is suggesting that the government is using sleight of hand to slug the taxpayer. Is that what he is saying? Dr S.C. Thomas : I am saying that you have to explain whether Verve Energy will be losing more like $375 million a year because you have an extra $2 billion effectively going into the budget over that period. Mr A.J. CARPENTER : Two million? Dr S.C. Thomas : Two billion dollars is effectively going into the budget over that period. Read the MPI from yesterday and find out where the government is putting the money. Either Verve Energy is losing a lot more than you are telling the Western Australian public or you are pulling a fiddle. I think you might be pulling a fiddle on the people of Western Australia. It would not be the first one the Labor party has been playing. Mr A.J. CARPENTER : I think I would be a foolish leader to be telling people that they are going to have to pay higher electricity prices than what we think they really need to pay. If the shadow Treasurer looks at the strategy we have adopted to address the situation, he will see that the underlying logic is that we do not want people to have to pay more for their energy bills in huge jumps all at once. Dr S.C. Thomas : You are spreading the huge jumps over a longer period. Mr A.J. CARPENTER : So we are spreading the pain over a more reasonable period. Dr S.C. Thomas : I’m not arguing with that. Mr A.J. CARPENTER : It would be a strange logic, would it not, for me to impose economic pain on the people of Western Australia and, before the next election, tell them that is what I am going to do, even though that change will not occur until well after the next election? Why would I come out well in advance of the next election and tell people that, after the next election, we will have to substantially increase energy prices, if that is not necessary?
Dr S.C. Thomas : I am saying that you have to explain whether Verve Energy will be losing more like $375 million a year because you have an extra $2 billion effectively going into the budget over that period. Mr A.J. CARPENTER : Two million? Dr S.C. Thomas : Two billion dollars is effectively going into the budget over that period. Read the MPI from yesterday and find out where the government is putting the money. Either Verve Energy is losing a lot more than you are telling the Western Australian public or you are pulling a fiddle. I think you might be pulling a fiddle on the people of Western Australia. It would not be the first one the Labor party has been playing. Mr A.J. CARPENTER : I think I would be a foolish leader to be telling people that they are going to have to pay higher electricity prices than what we think they really need to pay. If the shadow Treasurer looks at the strategy we have adopted to address the situation, he will see that the underlying logic is that we do not want people to have to pay more for their energy bills in huge jumps all at once. Dr S.C. Thomas : You are spreading the huge jumps over a longer period. Mr A.J. CARPENTER : So we are spreading the pain over a more reasonable period. Dr S.C. Thomas : I’m not arguing with that. Mr A.J. CARPENTER : It would be a strange logic, would it not, for me to impose economic pain on the people of Western Australia and, before the next election, tell them that is what I am going to do, even though that change will not occur until well after the next election? Why would I come out well in advance of the next election and tell people that, after the next election, we will have to substantially increase energy prices, if that is not necessary?
Mr A.J. CARPENTER : Two million? Dr S.C. Thomas : Two billion dollars is effectively going into the budget over that period. Read the MPI from yesterday and find out where the government is putting the money. Either Verve Energy is losing a lot more than you are telling the Western Australian public or you are pulling a fiddle. I think you might be pulling a fiddle on the people of Western Australia. It would not be the first one the Labor party has been playing. Mr A.J. CARPENTER : I think I would be a foolish leader to be telling people that they are going to have to pay higher electricity prices than what we think they really need to pay. If the shadow Treasurer looks at the strategy we have adopted to address the situation, he will see that the underlying logic is that we do not want people to have to pay more for their energy bills in huge jumps all at once. Dr S.C. Thomas : You are spreading the huge jumps over a longer period. Mr A.J. CARPENTER : So we are spreading the pain over a more reasonable period. Dr S.C. Thomas : I’m not arguing with that. Mr A.J. CARPENTER : It would be a strange logic, would it not, for me to impose economic pain on the people of Western Australia and, before the next election, tell them that is what I am going to do, even though that change will not occur until well after the next election? Why would I come out well in advance of the next election and tell people that, after the next election, we will have to substantially increase energy prices, if that is not necessary?
Dr S.C. Thomas : Two billion dollars is effectively going into the budget over that period. Read the MPI from yesterday and find out where the government is putting the money. Either Verve Energy is losing a lot more than you are telling the Western Australian public or you are pulling a fiddle. I think you might be pulling a fiddle on the people of Western Australia. It would not be the first one the Labor party has been playing. Mr A.J. CARPENTER : I think I would be a foolish leader to be telling people that they are going to have to pay higher electricity prices than what we think they really need to pay. If the shadow Treasurer looks at the strategy we have adopted to address the situation, he will see that the underlying logic is that we do not want people to have to pay more for their energy bills in huge jumps all at once. Dr S.C. Thomas : You are spreading the huge jumps over a longer period. Mr A.J. CARPENTER : So we are spreading the pain over a more reasonable period. Dr S.C. Thomas : I’m not arguing with that. Mr A.J. CARPENTER : It would be a strange logic, would it not, for me to impose economic pain on the people of Western Australia and, before the next election, tell them that is what I am going to do, even though that change will not occur until well after the next election? Why would I come out well in advance of the next election and tell people that, after the next election, we will have to substantially increase energy prices, if that is not necessary?
Mr A.J. CARPENTER : I think I would be a foolish leader to be telling people that they are going to have to pay higher electricity prices than what we think they really need to pay. If the shadow Treasurer looks at the strategy we have adopted to address the situation, he will see that the underlying logic is that we do not want people to have to pay more for their energy bills in huge jumps all at once. Dr S.C. Thomas : You are spreading the huge jumps over a longer period. Mr A.J. CARPENTER : So we are spreading the pain over a more reasonable period. Dr S.C. Thomas : I’m not arguing with that. Mr A.J. CARPENTER : It would be a strange logic, would it not, for me to impose economic pain on the people of Western Australia and, before the next election, tell them that is what I am going to do, even though that change will not occur until well after the next election? Why would I come out well in advance of the next election and tell people that, after the next election, we will have to substantially increase energy prices, if that is not necessary?
Dr S.C. Thomas : You are spreading the huge jumps over a longer period. Mr A.J. CARPENTER : So we are spreading the pain over a more reasonable period. Dr S.C. Thomas : I’m not arguing with that. Mr A.J. CARPENTER : It would be a strange logic, would it not, for me to impose economic pain on the people of Western Australia and, before the next election, tell them that is what I am going to do, even though that change will not occur until well after the next election? Why would I come out well in advance of the next election and tell people that, after the next election, we will have to substantially increase energy prices, if that is not necessary?
Mr A.J. CARPENTER : So we are spreading the pain over a more reasonable period. Dr S.C. Thomas : I’m not arguing with that. Mr A.J. CARPENTER : It would be a strange logic, would it not, for me to impose economic pain on the people of Western Australia and, before the next election, tell them that is what I am going to do, even though that change will not occur until well after the next election? Why would I come out well in advance of the next election and tell people that, after the next election, we will have to substantially increase energy prices, if that is not necessary?
Dr S.C. Thomas : I’m not arguing with that. Mr A.J. CARPENTER : It would be a strange logic, would it not, for me to impose economic pain on the people of Western Australia and, before the next election, tell them that is what I am going to do, even though that change will not occur until well after the next election? Why would I come out well in advance of the next election and tell people that, after the next election, we will have to substantially increase energy prices, if that is not necessary?
Mr A.J. CARPENTER : It would be a strange logic, would it not, for me to impose economic pain on the people of Western Australia and, before the next election, tell them that is what I am going to do, even though that change will not occur until well after the next election? Why would I come out well in advance of the next election and tell people that, after the next election, we will have to substantially increase energy prices, if that is not necessary?
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