❓ WA parliamentary question reveals reviews of fees and charges across government agencies, identifying instances of over-recovery and subsequent fee reductions in some areas, particularly within Western Power, Synergy and the Government Employees Superannuation Board.
AnsweredQoN 4184Legislative Assembly
Asked
9 October 2018
Member
Portfolio
Treasurer; Minister for Finance; Energy; Aboriginal Affairs
QuestionView source ↗
For each agency, department, authority and Government Trading Enterprise under the Minister's portfolio: (a) how many reviews of their agencies’ fees and charges have been conducted since 17 March 2017; (b) did any of these reviews identify any fee or charge that is above cost recovery; (c) if yes to (b), could you please provide: (i) a list of the fees or charges identified; (ii) the amount the fee or charge was above cost recovery; and (iii) the reason for the fee or charge being above cost recovery; (d) did any of these reviews result in an increase in any fee or charge that was above cost recovery; and; (e) if yes to (d), could you please provide: (i) a list of the fees or charges that were increased; (ii) the amount that the fee or charge increased; (iii) how much above cost recovery was the new fee or charge; and; and (iv) the reason for the fee or charge being above cost recovery; and (f) if yes to (b) have any fees or charges been reduced as a result of the identification of over recovery: (i) if yes, what were the fees and charges that were reduced, and what was the amount each fee or charge was reduced?
AnswerView source ↗
Answered
20 November 2018
Response time
12 days
Department of Treasury
(a) Nil return. The Department of Treasury does not have any fees and charges.
(b-f) Not applicable.
Department of Finance
(a) Two
(b) No
(c) Not applicable.
(d) No
(e-f) Not applicable.
Western Australia Treasury Corporation
(a) Nil return. The Western Australia Treasury Corporation does not have any fees and charges.
(b)-(f) Not applicable.
Economic Regulation Authority
(a) One
(b) No
(c) Not applicable
(d) No
(e-f) Not applicable
Department of Planning, Lands and Heritage
Former Department of Aboriginal Affairs (17 March – 30 June 2017)
(a) Nil.
(b)-(f) Not applicable.
Department of Planning, Lands and Heritage (1 July 2017 – 9 October 2018)
Please refer to Legislative Assembly question on notice 4187.
Aboriginal Affairs Planning Authority (17 March 2017 – 9 October 2018)
(a)-(f) Not applicable as there are no fees or charges for the Aboriginal Affairs Planning Authority.
Aboriginal Policy and Coordination Unit
Please refer to the response to Legislative Assembly Question on Notice 4174.
Western Power
(a) Western Power has revised services that had not been reviewed in three years.
(b) Yes
(c)(i) See Table, Column 1
(ii) See Table
(iii) The cost for ‘fixed price’ services had not been reviewed in the last three years, so decrease in the cost of some services were not reflected in the price.
Fees & Charges with Price Changes since 17 March 2017
Name of fee / charge
Old price
New price (cost recovery price)
Process & Network assessment – Commercial Solar 150-999kW
$30,000
$15,000
Working near Transmission & Communication assets (WTC) – Isolation fee
$250
$6,500
Meter installation
$452.66
$455
Temp disconnection & reconnection (business hours)
$502.95
$625
Temp disconnection & reconnection (after hours)
$754.43
$655
Temporary overhead supply
$553.25
$555
Phase conversion (overhead business hours)
$553.25
$800
Phase conversion (overhead after hours)
$829.87
$830
Phase conversion (underground business hours)
$452.66
$570
Phase conversion (overhead after hours)
$628.60
$630
Isolation to add meter
$452.66
$455
Pole to Pillar (same side of road)
$681
$3,400
Pole to Pillar (opposite side of road)
$681
$4,900
(d) No. Western Power undertakes these services on a cost recovery only basis and does not make a profit from providing these services. The change in costs reflects changing prices to deliver these services.
(e) Not applicable
(f) See Table
Synergy
(a) One. Every year Synergy review all fees and charges to ensure that they are set at appropriate levels. Changes to fees are then implemented for 1 July after fees have been appropriately approved and gazetted. Synergy’s fees and charges recommendations were completed on 15 December 2017 for implementation starting from 1 July 2018.
(b) Yes.
(c)
(i) Dishonour fee.
(ii) Dishonour fees were reduced from $15.95 to $2.75 , which is a $13.20 reduction.
(iii) This reflected a change in pricing from Commonwealth Bank for WA State Government customers for both Inward Cheque and Direct Debit Dishonour fees.
(d) No.
(e) Not applicable.
(f) Yes.
(i) Cheque Dishonour fees were reduced from $15.95 to $2.75, which is a $13.20 reduction. This reflected a change in pricing from Commonwealth Bank for WA State Government customers for both Inward Cheque and Direct Debit Dishonour fees.
Horizon Power
(a) One
(b) No
(c) Not applicable
(d) No
(e-f) Not applicable
Government Employees Superannuation Board
(a) One
(b) Yes
(c)(i) Account Expense Ratio on accumulation schemes
(ii) Revenue was projected to be 14.7% above costs for accumulation schemes in 18-19 (as defined in the 18-19 SCI Surplus deficit).
(iii) Reduction in Administration costs in recent years, primarily due to administration outsourcing and accommodation expense.
(d) No
(e) Not applicable
(f) Yes
(i) Reduction on the Account Expense Ratio, reductions as follows -
GESB Super 0.28% to 0.20%
West State 0.06% to 0.04%
RI Tap 0.70% to 0.28%
RI and RI TTR 0.20% to 0.12%
Fire and Emergency Services Superannuation Fund
(a) One
(b) No
(c) Not applicable
(d) No
(e-f) Not applicable
(f) Not applicable
Insurance Commission of Western Australia
(a) Insurance premium rates are assessed annually. Two reviews of motor injury insurance premiums have been undertaken since March 2017.
(b) No. The Insurance Commission aims to set insurance premium rates to ensure sufficient revenue is available to meet claims costs and scheme running expenses. Premiums are set based on actuarial forecasts of future claims expenses. These forecasts are based on various factors such as the estimated number of new claims, claims size, and future economic assumptions for inflation and discount rates. Movements in actuarial valuations of claims liabilities can have a significant impact on the underwriting position and can therefore result in premiums being either sufficient or insufficient in any year. This is only established after the end of the financial year and can result in an underwriting profit or loss. For example, a 1% movement in the wrong direction for discount or inflation rates would increase the Third Party Insurance Fund’s outstanding claims liabilities (and reduce the Fund’s underwriting result) by approximately $78 million.
The Third Party Insurance Fund has recorded an underwriting loss in 15 of the last 20 years. This reflects that premium revenue has not met the cost of claims and scheme costs in those years. In 2017 and 2018 the Third Party Insurance Fund recorded underwriting profits of $20 million and $26 million. This is equivalent to approximately 4.4% of premium revenue or 1.1% of outstanding claims liabilities.
The pricing philosophy of the Insurance Commission is based on regular WA inflation-linked average weekly earnings increases to link prices with cost growth. Average weekly earnings is the most relevant index for motor injury insurance as the majority of claims costs (i.e. claims for loss of income, medical and allied health costs) are directly linked to wage inflation.
Western Australian motorists pay one of the most affordable motor injury insurance premium rates in Australia.
(c) Not applicable
(d) No. See response (b)
(e-f) Not applicable
Office of the Auditor General
(a) One
(b) No
(c) Not applicable
(d) No
(e-f) Not applicable
(a) Nil return. The Department of Treasury does not have any fees and charges.
(b-f) Not applicable.
Department of Finance
(a) Two
(b) No
(c) Not applicable.
(d) No
(e-f) Not applicable.
Western Australia Treasury Corporation
(a) Nil return. The Western Australia Treasury Corporation does not have any fees and charges.
(b)-(f) Not applicable.
Economic Regulation Authority
(a) One
(b) No
(c) Not applicable
(d) No
(e-f) Not applicable
Department of Planning, Lands and Heritage
Former Department of Aboriginal Affairs (17 March – 30 June 2017)
(a) Nil.
(b)-(f) Not applicable.
Department of Planning, Lands and Heritage (1 July 2017 – 9 October 2018)
Please refer to Legislative Assembly question on notice 4187.
Aboriginal Affairs Planning Authority (17 March 2017 – 9 October 2018)
(a)-(f) Not applicable as there are no fees or charges for the Aboriginal Affairs Planning Authority.
Aboriginal Policy and Coordination Unit
Please refer to the response to Legislative Assembly Question on Notice 4174.
Western Power
(a) Western Power has revised services that had not been reviewed in three years.
(b) Yes
(c)(i) See Table, Column 1
(ii) See Table
(iii) The cost for ‘fixed price’ services had not been reviewed in the last three years, so decrease in the cost of some services were not reflected in the price.
Fees & Charges with Price Changes since 17 March 2017
Name of fee / charge
Old price
New price (cost recovery price)
Process & Network assessment – Commercial Solar 150-999kW
$30,000
$15,000
Working near Transmission & Communication assets (WTC) – Isolation fee
$250
$6,500
Meter installation
$452.66
$455
Temp disconnection & reconnection (business hours)
$502.95
$625
Temp disconnection & reconnection (after hours)
$754.43
$655
Temporary overhead supply
$553.25
$555
Phase conversion (overhead business hours)
$553.25
$800
Phase conversion (overhead after hours)
$829.87
$830
Phase conversion (underground business hours)
$452.66
$570
Phase conversion (overhead after hours)
$628.60
$630
Isolation to add meter
$452.66
$455
Pole to Pillar (same side of road)
$681
$3,400
Pole to Pillar (opposite side of road)
$681
$4,900
(d) No. Western Power undertakes these services on a cost recovery only basis and does not make a profit from providing these services. The change in costs reflects changing prices to deliver these services.
(e) Not applicable
(f) See Table
Synergy
(a) One. Every year Synergy review all fees and charges to ensure that they are set at appropriate levels. Changes to fees are then implemented for 1 July after fees have been appropriately approved and gazetted. Synergy’s fees and charges recommendations were completed on 15 December 2017 for implementation starting from 1 July 2018.
(b) Yes.
(c)
(i) Dishonour fee.
(ii) Dishonour fees were reduced from $15.95 to $2.75 , which is a $13.20 reduction.
(iii) This reflected a change in pricing from Commonwealth Bank for WA State Government customers for both Inward Cheque and Direct Debit Dishonour fees.
(d) No.
(e) Not applicable.
(f) Yes.
(i) Cheque Dishonour fees were reduced from $15.95 to $2.75, which is a $13.20 reduction. This reflected a change in pricing from Commonwealth Bank for WA State Government customers for both Inward Cheque and Direct Debit Dishonour fees.
Horizon Power
(a) One
(b) No
(c) Not applicable
(d) No
(e-f) Not applicable
Government Employees Superannuation Board
(a) One
(b) Yes
(c)(i) Account Expense Ratio on accumulation schemes
(ii) Revenue was projected to be 14.7% above costs for accumulation schemes in 18-19 (as defined in the 18-19 SCI Surplus deficit).
(iii) Reduction in Administration costs in recent years, primarily due to administration outsourcing and accommodation expense.
(d) No
(e) Not applicable
(f) Yes
(i) Reduction on the Account Expense Ratio, reductions as follows -
GESB Super 0.28% to 0.20%
West State 0.06% to 0.04%
RI Tap 0.70% to 0.28%
RI and RI TTR 0.20% to 0.12%
Fire and Emergency Services Superannuation Fund
(a) One
(b) No
(c) Not applicable
(d) No
(e-f) Not applicable
(f) Not applicable
Insurance Commission of Western Australia
(a) Insurance premium rates are assessed annually. Two reviews of motor injury insurance premiums have been undertaken since March 2017.
(b) No. The Insurance Commission aims to set insurance premium rates to ensure sufficient revenue is available to meet claims costs and scheme running expenses. Premiums are set based on actuarial forecasts of future claims expenses. These forecasts are based on various factors such as the estimated number of new claims, claims size, and future economic assumptions for inflation and discount rates. Movements in actuarial valuations of claims liabilities can have a significant impact on the underwriting position and can therefore result in premiums being either sufficient or insufficient in any year. This is only established after the end of the financial year and can result in an underwriting profit or loss. For example, a 1% movement in the wrong direction for discount or inflation rates would increase the Third Party Insurance Fund’s outstanding claims liabilities (and reduce the Fund’s underwriting result) by approximately $78 million.
The Third Party Insurance Fund has recorded an underwriting loss in 15 of the last 20 years. This reflects that premium revenue has not met the cost of claims and scheme costs in those years. In 2017 and 2018 the Third Party Insurance Fund recorded underwriting profits of $20 million and $26 million. This is equivalent to approximately 4.4% of premium revenue or 1.1% of outstanding claims liabilities.
The pricing philosophy of the Insurance Commission is based on regular WA inflation-linked average weekly earnings increases to link prices with cost growth. Average weekly earnings is the most relevant index for motor injury insurance as the majority of claims costs (i.e. claims for loss of income, medical and allied health costs) are directly linked to wage inflation.
Western Australian motorists pay one of the most affordable motor injury insurance premium rates in Australia.
(c) Not applicable
(d) No. See response (b)
(e-f) Not applicable
Office of the Auditor General
(a) One
(b) No
(c) Not applicable
(d) No
(e-f) Not applicable
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