❓ Opposition questions the government's transparency regarding electricity price increases, referencing a prior election promise. The Minister defends the increases as necessary to address a legacy of underfunding and debt from the previous Labor government.
AnsweredQoN 240Legislative Council
QuestionView source ↗
ELECTRICITY PRICES — INCREASES
240. Hon LINDA
SAVAGE to the Minister for Energy:
Given that the Liberal Party did not disclose before the
previous state election that the increase in electricity prices would be 57 per
cent in its first three years of office, will the minister now give an
undertaking that prior to the next election he will provide the actual
electricity price path for the next four years?
240. Hon LINDA
SAVAGE to the Minister for Energy:
Given that the Liberal Party did not disclose before the
previous state election that the increase in electricity prices would be 57 per
cent in its first three years of office, will the minister now give an
undertaking that prior to the next election he will provide the actual
electricity price path for the next four years?
AnswerView source ↗
I thank the honourable member for some notice of the
question.
Again, this is a legacy of that tapestry of failure that I
inherited as energy minister when I came into the portfolio. That was the fact
that there had been —
Hon Kate Doust : The tapestry of failure?
Hon PETER COLLIER : It is a very valid analogy, I can tell
her; she has no idea!
Hon Ed Dermer : Are you responsible for anything at all?
Hon PETER COLLIER : Of course! If the member was watching the
news yesterday, he would know that I always take responsibility. I would love
to have a debate on this one; I really would.
Several members
interjected.
The PRESIDENT : Order! The minister is responsible for a
concise and relevant answer.
Hon PETER COLLIER : As far as the tariffs are concerned, Hon
Linda Savage, as a member of the Labor Party, would know that there had been no
increase whatsoever under the former Labor government. That left a legacy of
debt in terms of tariffs, because, as I have said —
Hon Kate Doust : It goes all the way back to the
Court government.
Hon PETER COLLIER : No, no. Let me give members a bit of
background on why we needed to make these changes. It is very valid and very
pertinent.
The previous Labor Premier was given a document in April 2008 which
suggested increases of 77 per cent were needed to meet the costs of providing
and generating electricity. Hon Alan Carpenter said, ''We will have an
increase of 10 per cent in April next year,'' which coincidentally would
have been after the election. He made the decision to have an early election
and of course Labor lost government. That was the draft report. Immediately
after that, I got the final report in January 2009. It was one of the first
documents I got. I thought that a 77 per cent increase was terrible, but it was
not 77 per cent, it was 116 per cent.
Members are sitting
there and saying we have to get to a point whereby we have to increase
electricity charges by 116 per cent to the Western Australian public or
continue to bail out the corporations to the tune of hundreds upon hundreds of
millions of dollars. Hon Linda Savage needs to remember that she cannot have it
both ways; she has to have it one way or the other. We can either get to a
point where we have a user-choice system for electricity, or we can as a
government pay for it out of consolidated revenue, which we continue to do as a
government to make up the shortfall. I am sure members opposite who have been
ministers will know what it is like sitting around the cabinet table and saying
to the Minister for Education and the Minister for Health, ''We cannot
provide you with any more schools or with any more hospitals because of the
fact that it is costing us $2 billion to $3 billion to bail out the electricity
corporations to pay for our electricity.'' We therefore made the
decision to make the significant increases that we have made, and they have
amounted to around 57 per cent over that period.
I have to be honest: possibly in retrospect we went a little
fast; certainly in that second year we could have slowed it down. Certainly by
the third year we were getting to the point where it was clearly evident that
members of the community needed a break in proceedings, and that is what we
gave them last year with the five per cent increase. As I have said and
continue to say, a very modest increase will be announced on Thursday. We have
slowed down the process. At the same time, given all of those significant
increases, we have been very cognisant of those who are least able to pay. That
is why we have increased the hardship allowance to the tune of tens of millions
of dollars to assist those who are least able to pay. We are still not at
cost-reflective levels; we are still not paying for our electricity. Believe it
or not, we are still one of the cheapest jurisdictions in the nation for
electricity. The cost of electricity continues to skyrocket because, of course,
we have an ageing network that we need to invest billions of dollars in, and
because generation costs, particularly fuel costs, continue to accelerate. We
have an ageing generation network that we have to replace. The retail costs and
labour costs throughout all the sectors mean that there will be increased
pressure on charges. As I keep saying—it is a good clich—we
are not ''Nigel no friends'' in this space. Electricity charges
in Western Australia are not just out on a limb; they are not out on an island.
Western Australia cannot stand alone as the only jurisdiction that has had
significant increases in electricity charges; they have been not just across
all other jurisdictions in Australia, but internationally. As we move towards a
much cleaner and more sustainable energy future, those costs will continue to
skyrocket. We will have another increase of around nine per cent on 1 July as a
result of the carbon tax. We are not going to impose that upon the people of
Western Australia; that is coming from the federal government. That certainly
will not be our increase. Suffice to say, the increases we have had have been
difficult decisions, they have been necessary decisions and I think they have
been the right decisions. There is the financial component, but also there is
the very clear message to the public of Western Australia that people cannot
have five plasmas and all the lights and all the computers on in their homes.
That is what it was like. Electricity was cheap, so there was no incentive
whatsoever to turn off and conserve electricity. That has been one by-product
of the increase in electricity, but at the same time we are very mindful of the
significant impost that has been imposed on Western Australian householders. As
a result of that, we slowed it last year and it will be slowed again this year.
question.
Again, this is a legacy of that tapestry of failure that I
inherited as energy minister when I came into the portfolio. That was the fact
that there had been —
Hon Kate Doust : The tapestry of failure?
Hon PETER COLLIER : It is a very valid analogy, I can tell
her; she has no idea!
Hon Ed Dermer : Are you responsible for anything at all?
Hon PETER COLLIER : Of course! If the member was watching the
news yesterday, he would know that I always take responsibility. I would love
to have a debate on this one; I really would.
Several members
interjected.
The PRESIDENT : Order! The minister is responsible for a
concise and relevant answer.
Hon PETER COLLIER : As far as the tariffs are concerned, Hon
Linda Savage, as a member of the Labor Party, would know that there had been no
increase whatsoever under the former Labor government. That left a legacy of
debt in terms of tariffs, because, as I have said —
Hon Kate Doust : It goes all the way back to the
Court government.
Hon PETER COLLIER : No, no. Let me give members a bit of
background on why we needed to make these changes. It is very valid and very
pertinent.
The previous Labor Premier was given a document in April 2008 which
suggested increases of 77 per cent were needed to meet the costs of providing
and generating electricity. Hon Alan Carpenter said, ''We will have an
increase of 10 per cent in April next year,'' which coincidentally would
have been after the election. He made the decision to have an early election
and of course Labor lost government. That was the draft report. Immediately
after that, I got the final report in January 2009. It was one of the first
documents I got. I thought that a 77 per cent increase was terrible, but it was
not 77 per cent, it was 116 per cent.
Members are sitting
there and saying we have to get to a point whereby we have to increase
electricity charges by 116 per cent to the Western Australian public or
continue to bail out the corporations to the tune of hundreds upon hundreds of
millions of dollars. Hon Linda Savage needs to remember that she cannot have it
both ways; she has to have it one way or the other. We can either get to a
point where we have a user-choice system for electricity, or we can as a
government pay for it out of consolidated revenue, which we continue to do as a
government to make up the shortfall. I am sure members opposite who have been
ministers will know what it is like sitting around the cabinet table and saying
to the Minister for Education and the Minister for Health, ''We cannot
provide you with any more schools or with any more hospitals because of the
fact that it is costing us $2 billion to $3 billion to bail out the electricity
corporations to pay for our electricity.'' We therefore made the
decision to make the significant increases that we have made, and they have
amounted to around 57 per cent over that period.
I have to be honest: possibly in retrospect we went a little
fast; certainly in that second year we could have slowed it down. Certainly by
the third year we were getting to the point where it was clearly evident that
members of the community needed a break in proceedings, and that is what we
gave them last year with the five per cent increase. As I have said and
continue to say, a very modest increase will be announced on Thursday. We have
slowed down the process. At the same time, given all of those significant
increases, we have been very cognisant of those who are least able to pay. That
is why we have increased the hardship allowance to the tune of tens of millions
of dollars to assist those who are least able to pay. We are still not at
cost-reflective levels; we are still not paying for our electricity. Believe it
or not, we are still one of the cheapest jurisdictions in the nation for
electricity. The cost of electricity continues to skyrocket because, of course,
we have an ageing network that we need to invest billions of dollars in, and
because generation costs, particularly fuel costs, continue to accelerate. We
have an ageing generation network that we have to replace. The retail costs and
labour costs throughout all the sectors mean that there will be increased
pressure on charges. As I keep saying—it is a good clich—we
are not ''Nigel no friends'' in this space. Electricity charges
in Western Australia are not just out on a limb; they are not out on an island.
Western Australia cannot stand alone as the only jurisdiction that has had
significant increases in electricity charges; they have been not just across
all other jurisdictions in Australia, but internationally. As we move towards a
much cleaner and more sustainable energy future, those costs will continue to
skyrocket. We will have another increase of around nine per cent on 1 July as a
result of the carbon tax. We are not going to impose that upon the people of
Western Australia; that is coming from the federal government. That certainly
will not be our increase. Suffice to say, the increases we have had have been
difficult decisions, they have been necessary decisions and I think they have
been the right decisions. There is the financial component, but also there is
the very clear message to the public of Western Australia that people cannot
have five plasmas and all the lights and all the computers on in their homes.
That is what it was like. Electricity was cheap, so there was no incentive
whatsoever to turn off and conserve electricity. That has been one by-product
of the increase in electricity, but at the same time we are very mindful of the
significant impost that has been imposed on Western Australian householders. As
a result of that, we slowed it last year and it will be slowed again this year.
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