❓ Mr. Johnston questions the Minister for Energy about Western Power's tax equivalent payments. The Minister clarifies that Western Power hasn't made these payments due to offsetting losses, as detailed in budget papers.
AnsweredQoN 304Legislative Assembly
QuestionView source ↗
WESTERN
POWER — TAX EQUIVALENT PAYMENTS
304. Mr W.J. JOHNSTON to the
Minister for Energy:
I refer to the minister's statement in the house
yesterday that Western Power has not paid tax equivalent payments to the
government during the time he has been Minister for Energy.
(1) Has the
minister read the Western Power annual reports for the years 2013, 2014 and
2015—the years he has been minister?
(2) Does the
minister accept that each report shows the payment of tax equivalents by
Western Power for each year?
(3) If these
payments were not made to the WA consolidated fund, where were they sent?
POWER — TAX EQUIVALENT PAYMENTS
304. Mr W.J. JOHNSTON to the
Minister for Energy:
I refer to the minister's statement in the house
yesterday that Western Power has not paid tax equivalent payments to the
government during the time he has been Minister for Energy.
(1) Has the
minister read the Western Power annual reports for the years 2013, 2014 and
2015—the years he has been minister?
(2) Does the
minister accept that each report shows the payment of tax equivalents by
Western Power for each year?
(3) If these
payments were not made to the WA consolidated fund, where were they sent?
AnswerView source ↗
(1)–(3)
I thank the member very much for those questions. Yes, people on the opposite
side are of the central tenet that Western Power is a very large cash cow for
the government, which is based on the idea of whether or not it pays tax
equivalent income payments to the state. There are three major payments listed
in the budget papers, and if the member read the budget paper, he would
understand that. The first is tax equivalent payments; the second is payments
to local governments, which are not large and are stated there; and the third
is dividends. Western Power does pay dividends, but under my watch it makes no,
and has made no, income tax equivalent payments to the state. The reason for
that is that it has large offsetting losses that have accumulated. As a result
of those large offsetting losses and discussion with Treasury, Western Power
has been exempt from making any income tax equivalent payments to the state.
This is identified in full and detailed in appendix 8 on page 275 of budget
paper No 3, which lists Horizon Power, Synergy and Western Power. Let us take
Synergy as an example. As I indicated, it has three sources of flow: income
tax, local government and dividends. Synergy pays all—income tax,
payments to local government and dividends. Western Power pays local government
and dividends, but no income tax. That is the issue. Read the budget papers. I know
that Labor has this pet consultant from Queensland who the Electrical Trades
Union has hired, as it did in the Queensland debate, and he concocted a story
that the state received income tax payments—receipts. The annual report
does have income tax payments in it, but they are not transferred to the state
government. They are used to offset accumulating losses in Western Power. The
reason that Western Power does not pay any income tax payments at all is that
it has huge ongoing losses against it. Why? Because year after year it has not
been a cash cow, but a cash drain, both in the operating and capital sense, to
the general government sector.
I thank the member very much for those questions. Yes, people on the opposite
side are of the central tenet that Western Power is a very large cash cow for
the government, which is based on the idea of whether or not it pays tax
equivalent income payments to the state. There are three major payments listed
in the budget papers, and if the member read the budget paper, he would
understand that. The first is tax equivalent payments; the second is payments
to local governments, which are not large and are stated there; and the third
is dividends. Western Power does pay dividends, but under my watch it makes no,
and has made no, income tax equivalent payments to the state. The reason for
that is that it has large offsetting losses that have accumulated. As a result
of those large offsetting losses and discussion with Treasury, Western Power
has been exempt from making any income tax equivalent payments to the state.
This is identified in full and detailed in appendix 8 on page 275 of budget
paper No 3, which lists Horizon Power, Synergy and Western Power. Let us take
Synergy as an example. As I indicated, it has three sources of flow: income
tax, local government and dividends. Synergy pays all—income tax,
payments to local government and dividends. Western Power pays local government
and dividends, but no income tax. That is the issue. Read the budget papers. I know
that Labor has this pet consultant from Queensland who the Electrical Trades
Union has hired, as it did in the Queensland debate, and he concocted a story
that the state received income tax payments—receipts. The annual report
does have income tax payments in it, but they are not transferred to the state
government. They are used to offset accumulating losses in Western Power. The
reason that Western Power does not pay any income tax payments at all is that
it has huge ongoing losses against it. Why? Because year after year it has not
been a cash cow, but a cash drain, both in the operating and capital sense, to
the general government sector.
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