❓ A parliamentary question regarding the WA Labor Party's energy policy and its potential impact on the state's finances, specifically focusing on the cost of their proposal to abolish the tariff equalisation contribution (TEC).
AnsweredQoN 598Legislative Assembly
QuestionView source ↗
ENERGY
POLICY — WA LABOR
598. Mr J.M. FRANCIS to the Treasurer:
Like my colleagues on this side of the house, I am deeply
concerned about cost-of-living pressures amongst the families that my
colleagues and I represent. I am also concerned about the pressures —
Ms M.M. Quirk interjected.
Mr F.M. Logan : No,
you're not.
The SPEAKER : Member for
Girrawheen, I formally call you to order for the second time today. Member for
Cockburn, I call you to order for the third time. Either people have short
memories or they are deliberately abusing the system. Members, when a person is
on his or her feet asking a question, I do not want to hear from anybody else.
Mr J.M. FRANCIS : I
am also concerned about pressures on the state's finances, which is why
I was interested to recently hear the Leader of the Opposition announce the
Labor Party's energy policy. Can the Treasurer please inform the house
what on earth would happen to the state's finances if, God forbid,
Labor actually won the election?
POLICY — WA LABOR
598. Mr J.M. FRANCIS to the Treasurer:
Like my colleagues on this side of the house, I am deeply
concerned about cost-of-living pressures amongst the families that my
colleagues and I represent. I am also concerned about the pressures —
Ms M.M. Quirk interjected.
Mr F.M. Logan : No,
you're not.
The SPEAKER : Member for
Girrawheen, I formally call you to order for the second time today. Member for
Cockburn, I call you to order for the third time. Either people have short
memories or they are deliberately abusing the system. Members, when a person is
on his or her feet asking a question, I do not want to hear from anybody else.
Mr J.M. FRANCIS : I
am also concerned about pressures on the state's finances, which is why
I was interested to recently hear the Leader of the Opposition announce the
Labor Party's energy policy. Can the Treasurer please inform the house
what on earth would happen to the state's finances if, God forbid,
Labor actually won the election?
AnswerView source ↗
The Labor Party recently released a lower power bills policy.
Its low power bills policy effectively advocates for the abolition of the
tariff equalisation contribution and its replacement with a payment from
consolidated revenue. The TEC is an amount collected from all users of
electricity in the south west interconnected system. It was around seven per
cent and is now about six per cent; it is not really the percentages that are
important. That money gets collected out of the SWIS and gets paid across to
Horizon Power, and it is used to subsidise power for energy users in the remote
areas of Western Australia; it basically means that we all pay about the same
for power. The opposition has a policy that is basically to abolish the TEC and
to replace it with a payment made from consolidated revenue to Horizon Power to
the equivalent of the TEC and then a little bit—and I will talk about
that in a second.
What is interesting, though, is not so much that public
policy point of difference; it is what the opposition says it will do to energy
prices. I read from Labor's policy statement ''Lower power
bills: August 2012''. It reads —
The WA Labor Government will cut
the TEC levy and fund the TEC from general government revenue from 1 July 2013.
The average household power bill
will go down by $111 a year
That basically means that the average power bill will go down
and taxpayers will foot the bill for the balance. I asked Treasury to model a
policy that would deliver that outcome because I am interested in public policy
debate and the costings associated with it. I think as we head, member for
Jandakot, into an election campaign it is important we have an accurate idea of
what the opposition's promises will cost.
Mr B.S. Wyatt : Six
hundred and thirty million.
Mr T.R. BUSWELL :
The cost of that policy over four years, member for Jandakot, is $820 million.
Mr B.S. Wyatt : You've
got me, but that's the wrong policy. You've costed the wrong
policy.
Mr T.R. BUSWELL : I
have costed the right policy, my friend—the cost of policy that reduces
power costs by $111 from 1 July 2013 is $820 million. There are two elements of
the $820 million that we need to understand. Firstly, 40 per cent of the TEC is
paid by large energy users. So the Labor Party will be forcing the taxpayers of
Western Australia to pay a subsidy to the equivalent of 40 per cent of the TEC
to the larger energy users in Western Australia—punishing Western
Australian households to provide energy price reduction for the larger
contestable energy —
Mr E.S. Ripper interjected.
Mr T.R. BUSWELL :
It is absolutely true, member for Belmont. The member for Belmont looked happy
yesterday; I think he was the happiest person in this place after reading that
Newspoll!
I digress. Therefore, 40 per cent of the TEC payment is a
subsidy paid by taxpayers to the larger energy users in Western Australia. The
second and, I think, really important part of this issue is: where will the
Labor Party get the money from; where will Labor get the $820 million of
funding from?
Mr
B.S. Wyatt interjected.
Mr T.R. BUSWELL :
The Labor Party cannot wait until next year's budget because it has to
produce that document as part of its election costings. It is a massive black
hole.
Mr B.S. Wyatt interjected.
The
SPEAKER : Member for Victoria Park!
Mr
T.R. BUSWELL : I have rarely seen —
Several members interjected.
The
SPEAKER : In recent times some members in this place have decided to
interject far more vigorously than they have previously. Member for West Swan,
you are one of those and I formally call you to order for the second time
today. Member for Victoria Park, I will call you to order for the first time
today.
Mr T.R. BUSWELL : I
can tell you, Mr Speaker, that that commitment will plunge the state's
budget into deficit; that is what I can say without fear or favour. The Labor
Party wants to announce these policies. It wants to announce a policy that
provides a taxpayer-funded subsidy to large mining companies, to Coles —
Mr B.S. Wyatt interjected.
The SPEAKER :
Member for Victoria Park, I formally call you to order for the second time
today.
Mr T.R. BUSWELL :
That is the energy policy—$820 million. I then went on to have a look
at another policy that the Labor Party announced over the last couple of weeks.
This is a policy document called ''Building a Stronger Skilled Public
Sector'', and it ties in very nicely with the comments that the Premier
made this morning about the commentary made by Mr Kelly and United Voice. There
is a policy in this document —
Several members interjected.
The SPEAKER :
Members!
Mr B.S. Wyatt : The
question was about energy policy I thought.
Mr T.R. BUSWELL :
And other policies. Let me read from this policy document, if I may —
WA Labor will stop the outsourcing
and privatisation —
Mr
B.S. Wyatt interjected.
The
SPEAKER : Member for Victoria Park, I formally call you to order for the
third time today.
Mr
T.R. BUSWELL : I will read the quote again —
WA Labor will stop the outsourcing
and privatisation of public sector services. Where possible, we will return
outsourced services back into the public sector.
The Leader of the Opposition has an
opportunity, if he is lucky enough to take government next year, to undo the
contract at Midland Health Campus and to undo the contract with Serco at Fiona
Stanley Hospital. Will he do that? Will you do that, Leader of the Opposition?
The Leader of the Opposition has been in this place month after month bumping
on about it; will he do it? Let me tell the Leader of the Opposition how much
it will cost: $130 million to terminate the Midland Health Campus contract and
$61 million to terminate the Serco contract. Will the Leader of the Opposition
commit $200 million today to undo those contracts? Let me ask the Leader of the
Opposition again: will you commit $200 million to undo those contracts? There
we have it—fence sitting par excellence. Leader of the Opposition, will
you undo those contracts that your union paymasters demand of you? Will you
undo them? I assume that you will.
Let me conclude. There will be an
$820 million black hole based on the Labor Party's policy around lower
energy prices, 40 per cent of which will follow through to large energy users,
and a $200 million funding commitment to undo the contract with Serco and to
undo the contract with St John of God Health Care at Midland Health Campus.
That is a commitment of $1 billion made over the last few weeks and we have
only just started.
Its low power bills policy effectively advocates for the abolition of the
tariff equalisation contribution and its replacement with a payment from
consolidated revenue. The TEC is an amount collected from all users of
electricity in the south west interconnected system. It was around seven per
cent and is now about six per cent; it is not really the percentages that are
important. That money gets collected out of the SWIS and gets paid across to
Horizon Power, and it is used to subsidise power for energy users in the remote
areas of Western Australia; it basically means that we all pay about the same
for power. The opposition has a policy that is basically to abolish the TEC and
to replace it with a payment made from consolidated revenue to Horizon Power to
the equivalent of the TEC and then a little bit—and I will talk about
that in a second.
What is interesting, though, is not so much that public
policy point of difference; it is what the opposition says it will do to energy
prices. I read from Labor's policy statement ''Lower power
bills: August 2012''. It reads —
The WA Labor Government will cut
the TEC levy and fund the TEC from general government revenue from 1 July 2013.
The average household power bill
will go down by $111 a year
That basically means that the average power bill will go down
and taxpayers will foot the bill for the balance. I asked Treasury to model a
policy that would deliver that outcome because I am interested in public policy
debate and the costings associated with it. I think as we head, member for
Jandakot, into an election campaign it is important we have an accurate idea of
what the opposition's promises will cost.
Mr B.S. Wyatt : Six
hundred and thirty million.
Mr T.R. BUSWELL :
The cost of that policy over four years, member for Jandakot, is $820 million.
Mr B.S. Wyatt : You've
got me, but that's the wrong policy. You've costed the wrong
policy.
Mr T.R. BUSWELL : I
have costed the right policy, my friend—the cost of policy that reduces
power costs by $111 from 1 July 2013 is $820 million. There are two elements of
the $820 million that we need to understand. Firstly, 40 per cent of the TEC is
paid by large energy users. So the Labor Party will be forcing the taxpayers of
Western Australia to pay a subsidy to the equivalent of 40 per cent of the TEC
to the larger energy users in Western Australia—punishing Western
Australian households to provide energy price reduction for the larger
contestable energy —
Mr E.S. Ripper interjected.
Mr T.R. BUSWELL :
It is absolutely true, member for Belmont. The member for Belmont looked happy
yesterday; I think he was the happiest person in this place after reading that
Newspoll!
I digress. Therefore, 40 per cent of the TEC payment is a
subsidy paid by taxpayers to the larger energy users in Western Australia. The
second and, I think, really important part of this issue is: where will the
Labor Party get the money from; where will Labor get the $820 million of
funding from?
Mr
B.S. Wyatt interjected.
Mr T.R. BUSWELL :
The Labor Party cannot wait until next year's budget because it has to
produce that document as part of its election costings. It is a massive black
hole.
Mr B.S. Wyatt interjected.
The
SPEAKER : Member for Victoria Park!
Mr
T.R. BUSWELL : I have rarely seen —
Several members interjected.
The
SPEAKER : In recent times some members in this place have decided to
interject far more vigorously than they have previously. Member for West Swan,
you are one of those and I formally call you to order for the second time
today. Member for Victoria Park, I will call you to order for the first time
today.
Mr T.R. BUSWELL : I
can tell you, Mr Speaker, that that commitment will plunge the state's
budget into deficit; that is what I can say without fear or favour. The Labor
Party wants to announce these policies. It wants to announce a policy that
provides a taxpayer-funded subsidy to large mining companies, to Coles —
Mr B.S. Wyatt interjected.
The SPEAKER :
Member for Victoria Park, I formally call you to order for the second time
today.
Mr T.R. BUSWELL :
That is the energy policy—$820 million. I then went on to have a look
at another policy that the Labor Party announced over the last couple of weeks.
This is a policy document called ''Building a Stronger Skilled Public
Sector'', and it ties in very nicely with the comments that the Premier
made this morning about the commentary made by Mr Kelly and United Voice. There
is a policy in this document —
Several members interjected.
The SPEAKER :
Members!
Mr B.S. Wyatt : The
question was about energy policy I thought.
Mr T.R. BUSWELL :
And other policies. Let me read from this policy document, if I may —
WA Labor will stop the outsourcing
and privatisation —
Mr
B.S. Wyatt interjected.
The
SPEAKER : Member for Victoria Park, I formally call you to order for the
third time today.
Mr
T.R. BUSWELL : I will read the quote again —
WA Labor will stop the outsourcing
and privatisation of public sector services. Where possible, we will return
outsourced services back into the public sector.
The Leader of the Opposition has an
opportunity, if he is lucky enough to take government next year, to undo the
contract at Midland Health Campus and to undo the contract with Serco at Fiona
Stanley Hospital. Will he do that? Will you do that, Leader of the Opposition?
The Leader of the Opposition has been in this place month after month bumping
on about it; will he do it? Let me tell the Leader of the Opposition how much
it will cost: $130 million to terminate the Midland Health Campus contract and
$61 million to terminate the Serco contract. Will the Leader of the Opposition
commit $200 million today to undo those contracts? Let me ask the Leader of the
Opposition again: will you commit $200 million to undo those contracts? There
we have it—fence sitting par excellence. Leader of the Opposition, will
you undo those contracts that your union paymasters demand of you? Will you
undo them? I assume that you will.
Let me conclude. There will be an
$820 million black hole based on the Labor Party's policy around lower
energy prices, 40 per cent of which will follow through to large energy users,
and a $200 million funding commitment to undo the contract with Serco and to
undo the contract with St John of God Health Care at Midland Health Campus.
That is a commitment of $1 billion made over the last few weeks and we have
only just started.
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