❓ Question regarding government payments to electricity utilities, with the Treasurer accused of misleading the house and 'gouging' electricity providers, contributing to rising electricity bills. The Treasurer's response is lengthy and avoids a direct answer.
AnsweredQoN 133Legislative Assembly
QuestionView source ↗
ELECTRICITY UTILITIES — GOVERNMENT PAYMENTS
I refer to the Treasurer’s claim in the house that government payments to electricity utilities outweigh electricity utility payments to the government. I also refer to contrary information published on page 144 of budget paper No 2. (1) Is it the case that the Treasurer will gouge from electricity providers, over the next three financial years, $1.1 billion net? (2) Why did the Treasurer mislead the house last week? (3) Will the Treasurer acknowledge that his clawback from Western Power and other electricity providers is a huge factor in people’s skyrocketing electricity bills? Mr C.C. PORTER
I refer to the Treasurer’s claim in the house that government payments to electricity utilities outweigh electricity utility payments to the government. I also refer to contrary information published on page 144 of budget paper No 2. (1) Is it the case that the Treasurer will gouge from electricity providers, over the next three financial years, $1.1 billion net? (2) Why did the Treasurer mislead the house last week? (3) Will the Treasurer acknowledge that his clawback from Western Power and other electricity providers is a huge factor in people’s skyrocketing electricity bills? Mr C.C. PORTER
AnswerView source ↗
(1)–(3) The member accuses the government of “gouging” money in two ways — Mrs M.H. Roberts : Yes, over the next three financial years. Mr C.C. PORTER : The two allegations are that we gouge money from — Mrs M.H. Roberts : You’re taking more than you’re giving back. It’s pretty simple, and it’s not what you advised the house last week. Mr C.C. PORTER : There are two allegations of gouging. One allegation is that we are gouging from the consumers of electricity in this state. The member for Midland said in a press release recently that the Liberal–National government seeks to gouge $3.5 billion out of electricity consumers. That figure is based on the modelling that we have had done by the Office of Energy and Treasury — Mr R.H. Cook : Which you won’t table. Mr E.S. Ripper : Troy would. Mr C.C. PORTER : I do not need saving to that extent just yet! That $3.25 billion is a reference to this figure. The modelling that we have had done by Treasury and the Office of Energy was about whether there would be a cost to the state government for the direct subsidy that we pay to utilities if there was a freeze on electricity prices. We noted that the very difficult decisions that this government made in the past 18 months, which have seen an increase in electricity prices to the tune of 46 per cent, were made because, in effective terms, the residential retail tariff for electricity had not increased since 1991. There had not been a price increase in electricity since the time that Nirvana’s Smells Like Teen Spirit was number 1 in the charts. The member for Midland is probably more a Baby Got Back girl, by Sir MixALot, which was also number 1 at the time. It was a long time ago. I cannot think of a single other good or service in the Western Australian economy that has effectively had its price frozen since 1991. This government came to office and was faced with the very difficult decision of continuing to pump money into the electricity utilities so that they could remain profitable and, in effect, keep the lights on, or to look at the way prices are structured and try to move reasonably and rationally towards cost reflectivity. What the previous government did was based on assumptions about cost made by the Office of Energy in about 2007. It was interesting that the cost that the previous government assumed in that report changed from the time of the first draft report to the final draft report, because there are a great many reasons why the costs of generating electricity go up. The previous government assumed that it could reach some form of cost reflectivity with what it termed a community service obligation to the tune of about $760 million-odd. That money was placed directly into the utilities. Since the time of that report it has become clear to this government that the costs of generating electricity have now increased above and beyond the assumptions that underpinned that $700 million-odd. That means that based on the modelling we have, for every dollar prices do not go up — Mrs M.H. Roberts : You’re not answering the question I asked; you’re just giving some random lecture. This is just some random lecture about electricity prices. Mr C.C. PORTER : It is a complicated question and it is a complicated industry. Mrs M.H. Roberts : Over the next three years are you putting more in or are you ripping more out? The SPEAKER : Member for Midland, I will give you an opportunity to ask a supplementary question in a moment. I will also give the Treasurer the opportunity to conclude the answer to this question. Mr C.C. PORTER : It depends on what the price increases are. I will not speculate on those now. I have given two examples. If we adopt Labor Party policy and freeze electricity prices, the direct subsidies from the state budget to the electricity utilities will be $3.25 billion. We should just keep in mind that the average infrastructure spend of the Labor government was just over $3 billion each year that the Labor Party was in government. A freeze on electricity prices would mean that everything that the Labor Party spent on infrastructure on a yearly basis would not be able to occur. Getting to the exact point of the member’s question, it depends upon the price increase. If, for instance, there was a five per cent increase over the next four years—five, five, five and five—that would cost the state budget and the taxpayers of Western Australia about $1.4 billion in direct subsidies to the utilities, which is a conservative estimate of the cost of generating and servicing electricity to households. In those circumstances, it is fair to say that the state government and the taxpayer would still be losing, even on account of dividends reaped from electricity utilities, because electricity utility profits are based upon government subsidies. They are profits on paper because they are profits made from the subsidies that go in from state government.
(1) Is it the case that the Treasurer will gouge from electricity providers, over the next three financial years, $1.1 billion net? (2) Why did the Treasurer mislead the house last week? (3) Will the Treasurer acknowledge that his clawback from Western Power and other electricity providers is a huge factor in people’s skyrocketing electricity bills? Mr C.C. PORTER replied: (1)–(3) The member accuses the government of “gouging” money in two ways — Mrs M.H. Roberts : Yes, over the next three financial years. Mr C.C. PORTER : The two allegations are that we gouge money from — Mrs M.H. Roberts : You’re taking more than you’re giving back. It’s pretty simple, and it’s not what you advised the house last week. Mr C.C. PORTER : There are two allegations of gouging. One allegation is that we are gouging from the consumers of electricity in this state. The member for Midland said in a press release recently that the Liberal–National government seeks to gouge $3.5 billion out of electricity consumers. That figure is based on the modelling that we have had done by the Office of Energy and Treasury — Mr R.H. Cook : Which you won’t table. Mr E.S. Ripper : Troy would. Mr C.C. PORTER : I do not need saving to that extent just yet! That $3.25 billion is a reference to this figure. The modelling that we have had done by Treasury and the Office of Energy was about whether there would be a cost to the state government for the direct subsidy that we pay to utilities if there was a freeze on electricity prices. We noted that the very difficult decisions that this government made in the past 18 months, which have seen an increase in electricity prices to the tune of 46 per cent, were made because, in effective terms, the residential retail tariff for electricity had not increased since 1991. There had not been a price increase in electricity since the time that Nirvana’s Smells Like Teen Spirit was number 1 in the charts. The member for Midland is probably more a Baby Got Back girl, by Sir MixALot, which was also number 1 at the time. It was a long time ago. I cannot think of a single other good or service in the Western Australian economy that has effectively had its price frozen since 1991. This government came to office and was faced with the very difficult decision of continuing to pump money into the electricity utilities so that they could remain profitable and, in effect, keep the lights on, or to look at the way prices are structured and try to move reasonably and rationally towards cost reflectivity. What the previous government did was based on assumptions about cost made by the Office of Energy in about 2007. It was interesting that the cost that the previous government assumed in that report changed from the time of the first draft report to the final draft report, because there are a great many reasons why the costs of generating electricity go up. The previous government assumed that it could reach some form of cost reflectivity with what it termed a community service obligation to the tune of about $760 million-odd. That money was placed directly into the utilities. Since the time of that report it has become clear to this government that the costs of generating electricity have now increased above and beyond the assumptions that underpinned that $700 million-odd. That means that based on the modelling we have, for every dollar prices do not go up — Mrs M.H. Roberts : You’re not answering the question I asked; you’re just giving some random lecture. This is just some random lecture about electricity prices. Mr C.C. PORTER : It is a complicated question and it is a complicated industry. Mrs M.H. Roberts : Over the next three years are you putting more in or are you ripping more out? The SPEAKER : Member for Midland, I will give you an opportunity to ask a supplementary question in a moment. I will also give the Treasurer the opportunity to conclude the answer to this question. Mr C.C. PORTER : It depends on what the price increases are. I will not speculate on those now. I have given two examples. If we adopt Labor Party policy and freeze electricity prices, the direct subsidies from the state budget to the electricity utilities will be $3.25 billion. We should just keep in mind that the average infrastructure spend of the Labor government was just over $3 billion each year that the Labor Party was in government. A freeze on electricity prices would mean that everything that the Labor Party spent on infrastructure on a yearly basis would not be able to occur. Getting to the exact point of the member’s question, it depends upon the price increase. If, for instance, there was a five per cent increase over the next four years—five, five, five and five—that would cost the state budget and the taxpayers of Western Australia about $1.4 billion in direct subsidies to the utilities, which is a conservative estimate of the cost of generating and servicing electricity to households. In those circumstances, it is fair to say that the state government and the taxpayer would still be losing, even on account of dividends reaped from electricity utilities, because electricity utility profits are based upon government subsidies. They are profits on paper because they are profits made from the subsidies that go in from state government.
(2) Why did the Treasurer mislead the house last week? (3) Will the Treasurer acknowledge that his clawback from Western Power and other electricity providers is a huge factor in people’s skyrocketing electricity bills? Mr C.C. PORTER replied: (1)–(3) The member accuses the government of “gouging” money in two ways — Mrs M.H. Roberts : Yes, over the next three financial years. Mr C.C. PORTER : The two allegations are that we gouge money from — Mrs M.H. Roberts : You’re taking more than you’re giving back. It’s pretty simple, and it’s not what you advised the house last week. Mr C.C. PORTER : There are two allegations of gouging. One allegation is that we are gouging from the consumers of electricity in this state. The member for Midland said in a press release recently that the Liberal–National government seeks to gouge $3.5 billion out of electricity consumers. That figure is based on the modelling that we have had done by the Office of Energy and Treasury — Mr R.H. Cook : Which you won’t table. Mr E.S. Ripper : Troy would. Mr C.C. PORTER : I do not need saving to that extent just yet! That $3.25 billion is a reference to this figure. The modelling that we have had done by Treasury and the Office of Energy was about whether there would be a cost to the state government for the direct subsidy that we pay to utilities if there was a freeze on electricity prices. We noted that the very difficult decisions that this government made in the past 18 months, which have seen an increase in electricity prices to the tune of 46 per cent, were made because, in effective terms, the residential retail tariff for electricity had not increased since 1991. There had not been a price increase in electricity since the time that Nirvana’s Smells Like Teen Spirit was number 1 in the charts. The member for Midland is probably more a Baby Got Back girl, by Sir MixALot, which was also number 1 at the time. It was a long time ago. I cannot think of a single other good or service in the Western Australian economy that has effectively had its price frozen since 1991. This government came to office and was faced with the very difficult decision of continuing to pump money into the electricity utilities so that they could remain profitable and, in effect, keep the lights on, or to look at the way prices are structured and try to move reasonably and rationally towards cost reflectivity. What the previous government did was based on assumptions about cost made by the Office of Energy in about 2007. It was interesting that the cost that the previous government assumed in that report changed from the time of the first draft report to the final draft report, because there are a great many reasons why the costs of generating electricity go up. The previous government assumed that it could reach some form of cost reflectivity with what it termed a community service obligation to the tune of about $760 million-odd. That money was placed directly into the utilities. Since the time of that report it has become clear to this government that the costs of generating electricity have now increased above and beyond the assumptions that underpinned that $700 million-odd. That means that based on the modelling we have, for every dollar prices do not go up — Mrs M.H. Roberts : You’re not answering the question I asked; you’re just giving some random lecture. This is just some random lecture about electricity prices. Mr C.C. PORTER : It is a complicated question and it is a complicated industry. Mrs M.H. Roberts : Over the next three years are you putting more in or are you ripping more out? The SPEAKER : Member for Midland, I will give you an opportunity to ask a supplementary question in a moment. I will also give the Treasurer the opportunity to conclude the answer to this question. Mr C.C. PORTER : It depends on what the price increases are. I will not speculate on those now. I have given two examples. If we adopt Labor Party policy and freeze electricity prices, the direct subsidies from the state budget to the electricity utilities will be $3.25 billion. We should just keep in mind that the average infrastructure spend of the Labor government was just over $3 billion each year that the Labor Party was in government. A freeze on electricity prices would mean that everything that the Labor Party spent on infrastructure on a yearly basis would not be able to occur. Getting to the exact point of the member’s question, it depends upon the price increase. If, for instance, there was a five per cent increase over the next four years—five, five, five and five—that would cost the state budget and the taxpayers of Western Australia about $1.4 billion in direct subsidies to the utilities, which is a conservative estimate of the cost of generating and servicing electricity to households. In those circumstances, it is fair to say that the state government and the taxpayer would still be losing, even on account of dividends reaped from electricity utilities, because electricity utility profits are based upon government subsidies. They are profits on paper because they are profits made from the subsidies that go in from state government.
(3) Will the Treasurer acknowledge that his clawback from Western Power and other electricity providers is a huge factor in people’s skyrocketing electricity bills? Mr C.C. PORTER replied: (1)–(3) The member accuses the government of “gouging” money in two ways — Mrs M.H. Roberts : Yes, over the next three financial years. Mr C.C. PORTER : The two allegations are that we gouge money from — Mrs M.H. Roberts : You’re taking more than you’re giving back. It’s pretty simple, and it’s not what you advised the house last week. Mr C.C. PORTER : There are two allegations of gouging. One allegation is that we are gouging from the consumers of electricity in this state. The member for Midland said in a press release recently that the Liberal–National government seeks to gouge $3.5 billion out of electricity consumers. That figure is based on the modelling that we have had done by the Office of Energy and Treasury — Mr R.H. Cook : Which you won’t table. Mr E.S. Ripper : Troy would. Mr C.C. PORTER : I do not need saving to that extent just yet! That $3.25 billion is a reference to this figure. The modelling that we have had done by Treasury and the Office of Energy was about whether there would be a cost to the state government for the direct subsidy that we pay to utilities if there was a freeze on electricity prices. We noted that the very difficult decisions that this government made in the past 18 months, which have seen an increase in electricity prices to the tune of 46 per cent, were made because, in effective terms, the residential retail tariff for electricity had not increased since 1991. There had not been a price increase in electricity since the time that Nirvana’s Smells Like Teen Spirit was number 1 in the charts. The member for Midland is probably more a Baby Got Back girl, by Sir MixALot, which was also number 1 at the time. It was a long time ago. I cannot think of a single other good or service in the Western Australian economy that has effectively had its price frozen since 1991. This government came to office and was faced with the very difficult decision of continuing to pump money into the electricity utilities so that they could remain profitable and, in effect, keep the lights on, or to look at the way prices are structured and try to move reasonably and rationally towards cost reflectivity. What the previous government did was based on assumptions about cost made by the Office of Energy in about 2007. It was interesting that the cost that the previous government assumed in that report changed from the time of the first draft report to the final draft report, because there are a great many reasons why the costs of generating electricity go up. The previous government assumed that it could reach some form of cost reflectivity with what it termed a community service obligation to the tune of about $760 million-odd. That money was placed directly into the utilities. Since the time of that report it has become clear to this government that the costs of generating electricity have now increased above and beyond the assumptions that underpinned that $700 million-odd. That means that based on the modelling we have, for every dollar prices do not go up — Mrs M.H. Roberts : You’re not answering the question I asked; you’re just giving some random lecture. This is just some random lecture about electricity prices. Mr C.C. PORTER : It is a complicated question and it is a complicated industry. Mrs M.H. Roberts : Over the next three years are you putting more in or are you ripping more out? The SPEAKER : Member for Midland, I will give you an opportunity to ask a supplementary question in a moment. I will also give the Treasurer the opportunity to conclude the answer to this question. Mr C.C. PORTER : It depends on what the price increases are. I will not speculate on those now. I have given two examples. If we adopt Labor Party policy and freeze electricity prices, the direct subsidies from the state budget to the electricity utilities will be $3.25 billion. We should just keep in mind that the average infrastructure spend of the Labor government was just over $3 billion each year that the Labor Party was in government. A freeze on electricity prices would mean that everything that the Labor Party spent on infrastructure on a yearly basis would not be able to occur. Getting to the exact point of the member’s question, it depends upon the price increase. If, for instance, there was a five per cent increase over the next four years—five, five, five and five—that would cost the state budget and the taxpayers of Western Australia about $1.4 billion in direct subsidies to the utilities, which is a conservative estimate of the cost of generating and servicing electricity to households. In those circumstances, it is fair to say that the state government and the taxpayer would still be losing, even on account of dividends reaped from electricity utilities, because electricity utility profits are based upon government subsidies. They are profits on paper because they are profits made from the subsidies that go in from state government.
Mr C.C. PORTER replied: (1)–(3) The member accuses the government of “gouging” money in two ways — Mrs M.H. Roberts : Yes, over the next three financial years. Mr C.C. PORTER : The two allegations are that we gouge money from — Mrs M.H. Roberts : You’re taking more than you’re giving back. It’s pretty simple, and it’s not what you advised the house last week. Mr C.C. PORTER : There are two allegations of gouging. One allegation is that we are gouging from the consumers of electricity in this state. The member for Midland said in a press release recently that the Liberal–National government seeks to gouge $3.5 billion out of electricity consumers. That figure is based on the modelling that we have had done by the Office of Energy and Treasury — Mr R.H. Cook : Which you won’t table. Mr E.S. Ripper : Troy would. Mr C.C. PORTER : I do not need saving to that extent just yet! That $3.25 billion is a reference to this figure. The modelling that we have had done by Treasury and the Office of Energy was about whether there would be a cost to the state government for the direct subsidy that we pay to utilities if there was a freeze on electricity prices. We noted that the very difficult decisions that this government made in the past 18 months, which have seen an increase in electricity prices to the tune of 46 per cent, were made because, in effective terms, the residential retail tariff for electricity had not increased since 1991. There had not been a price increase in electricity since the time that Nirvana’s Smells Like Teen Spirit was number 1 in the charts. The member for Midland is probably more a Baby Got Back girl, by Sir MixALot, which was also number 1 at the time. It was a long time ago. I cannot think of a single other good or service in the Western Australian economy that has effectively had its price frozen since 1991. This government came to office and was faced with the very difficult decision of continuing to pump money into the electricity utilities so that they could remain profitable and, in effect, keep the lights on, or to look at the way prices are structured and try to move reasonably and rationally towards cost reflectivity. What the previous government did was based on assumptions about cost made by the Office of Energy in about 2007. It was interesting that the cost that the previous government assumed in that report changed from the time of the first draft report to the final draft report, because there are a great many reasons why the costs of generating electricity go up. The previous government assumed that it could reach some form of cost reflectivity with what it termed a community service obligation to the tune of about $760 million-odd. That money was placed directly into the utilities. Since the time of that report it has become clear to this government that the costs of generating electricity have now increased above and beyond the assumptions that underpinned that $700 million-odd. That means that based on the modelling we have, for every dollar prices do not go up — Mrs M.H. Roberts : You’re not answering the question I asked; you’re just giving some random lecture. This is just some random lecture about electricity prices. Mr C.C. PORTER : It is a complicated question and it is a complicated industry. Mrs M.H. Roberts : Over the next three years are you putting more in or are you ripping more out? The SPEAKER : Member for Midland, I will give you an opportunity to ask a supplementary question in a moment. I will also give the Treasurer the opportunity to conclude the answer to this question. Mr C.C. PORTER : It depends on what the price increases are. I will not speculate on those now. I have given two examples. If we adopt Labor Party policy and freeze electricity prices, the direct subsidies from the state budget to the electricity utilities will be $3.25 billion. We should just keep in mind that the average infrastructure spend of the Labor government was just over $3 billion each year that the Labor Party was in government. A freeze on electricity prices would mean that everything that the Labor Party spent on infrastructure on a yearly basis would not be able to occur. Getting to the exact point of the member’s question, it depends upon the price increase. If, for instance, there was a five per cent increase over the next four years—five, five, five and five—that would cost the state budget and the taxpayers of Western Australia about $1.4 billion in direct subsidies to the utilities, which is a conservative estimate of the cost of generating and servicing electricity to households. In those circumstances, it is fair to say that the state government and the taxpayer would still be losing, even on account of dividends reaped from electricity utilities, because electricity utility profits are based upon government subsidies. They are profits on paper because they are profits made from the subsidies that go in from state government.
(1)–(3) The member accuses the government of “gouging” money in two ways — Mrs M.H. Roberts : Yes, over the next three financial years. Mr C.C. PORTER : The two allegations are that we gouge money from — Mrs M.H. Roberts : You’re taking more than you’re giving back. It’s pretty simple, and it’s not what you advised the house last week. Mr C.C. PORTER : There are two allegations of gouging. One allegation is that we are gouging from the consumers of electricity in this state. The member for Midland said in a press release recently that the Liberal–National government seeks to gouge $3.5 billion out of electricity consumers. That figure is based on the modelling that we have had done by the Office of Energy and Treasury — Mr R.H. Cook : Which you won’t table. Mr E.S. Ripper : Troy would. Mr C.C. PORTER : I do not need saving to that extent just yet! That $3.25 billion is a reference to this figure. The modelling that we have had done by Treasury and the Office of Energy was about whether there would be a cost to the state government for the direct subsidy that we pay to utilities if there was a freeze on electricity prices. We noted that the very difficult decisions that this government made in the past 18 months, which have seen an increase in electricity prices to the tune of 46 per cent, were made because, in effective terms, the residential retail tariff for electricity had not increased since 1991. There had not been a price increase in electricity since the time that Nirvana’s Smells Like Teen Spirit was number 1 in the charts. The member for Midland is probably more a Baby Got Back girl, by Sir MixALot, which was also number 1 at the time. It was a long time ago. I cannot think of a single other good or service in the Western Australian economy that has effectively had its price frozen since 1991. This government came to office and was faced with the very difficult decision of continuing to pump money into the electricity utilities so that they could remain profitable and, in effect, keep the lights on, or to look at the way prices are structured and try to move reasonably and rationally towards cost reflectivity. What the previous government did was based on assumptions about cost made by the Office of Energy in about 2007. It was interesting that the cost that the previous government assumed in that report changed from the time of the first draft report to the final draft report, because there are a great many reasons why the costs of generating electricity go up. The previous government assumed that it could reach some form of cost reflectivity with what it termed a community service obligation to the tune of about $760 million-odd. That money was placed directly into the utilities. Since the time of that report it has become clear to this government that the costs of generating electricity have now increased above and beyond the assumptions that underpinned that $700 million-odd. That means that based on the modelling we have, for every dollar prices do not go up — Mrs M.H. Roberts : You’re not answering the question I asked; you’re just giving some random lecture. This is just some random lecture about electricity prices. Mr C.C. PORTER : It is a complicated question and it is a complicated industry. Mrs M.H. Roberts : Over the next three years are you putting more in or are you ripping more out? The SPEAKER : Member for Midland, I will give you an opportunity to ask a supplementary question in a moment. I will also give the Treasurer the opportunity to conclude the answer to this question. Mr C.C. PORTER : It depends on what the price increases are. I will not speculate on those now. I have given two examples. If we adopt Labor Party policy and freeze electricity prices, the direct subsidies from the state budget to the electricity utilities will be $3.25 billion. We should just keep in mind that the average infrastructure spend of the Labor government was just over $3 billion each year that the Labor Party was in government. A freeze on electricity prices would mean that everything that the Labor Party spent on infrastructure on a yearly basis would not be able to occur. Getting to the exact point of the member’s question, it depends upon the price increase. If, for instance, there was a five per cent increase over the next four years—five, five, five and five—that would cost the state budget and the taxpayers of Western Australia about $1.4 billion in direct subsidies to the utilities, which is a conservative estimate of the cost of generating and servicing electricity to households. In those circumstances, it is fair to say that the state government and the taxpayer would still be losing, even on account of dividends reaped from electricity utilities, because electricity utility profits are based upon government subsidies. They are profits on paper because they are profits made from the subsidies that go in from state government.
Mrs M.H. Roberts : Yes, over the next three financial years. Mr C.C. PORTER : The two allegations are that we gouge money from — Mrs M.H. Roberts : You’re taking more than you’re giving back. It’s pretty simple, and it’s not what you advised the house last week. Mr C.C. PORTER : There are two allegations of gouging. One allegation is that we are gouging from the consumers of electricity in this state. The member for Midland said in a press release recently that the Liberal–National government seeks to gouge $3.5 billion out of electricity consumers. That figure is based on the modelling that we have had done by the Office of Energy and Treasury — Mr R.H. Cook : Which you won’t table. Mr E.S. Ripper : Troy would. Mr C.C. PORTER : I do not need saving to that extent just yet! That $3.25 billion is a reference to this figure. The modelling that we have had done by Treasury and the Office of Energy was about whether there would be a cost to the state government for the direct subsidy that we pay to utilities if there was a freeze on electricity prices. We noted that the very difficult decisions that this government made in the past 18 months, which have seen an increase in electricity prices to the tune of 46 per cent, were made because, in effective terms, the residential retail tariff for electricity had not increased since 1991. There had not been a price increase in electricity since the time that Nirvana’s Smells Like Teen Spirit was number 1 in the charts. The member for Midland is probably more a Baby Got Back girl, by Sir MixALot, which was also number 1 at the time. It was a long time ago. I cannot think of a single other good or service in the Western Australian economy that has effectively had its price frozen since 1991. This government came to office and was faced with the very difficult decision of continuing to pump money into the electricity utilities so that they could remain profitable and, in effect, keep the lights on, or to look at the way prices are structured and try to move reasonably and rationally towards cost reflectivity. What the previous government did was based on assumptions about cost made by the Office of Energy in about 2007. It was interesting that the cost that the previous government assumed in that report changed from the time of the first draft report to the final draft report, because there are a great many reasons why the costs of generating electricity go up. The previous government assumed that it could reach some form of cost reflectivity with what it termed a community service obligation to the tune of about $760 million-odd. That money was placed directly into the utilities. Since the time of that report it has become clear to this government that the costs of generating electricity have now increased above and beyond the assumptions that underpinned that $700 million-odd. That means that based on the modelling we have, for every dollar prices do not go up — Mrs M.H. Roberts : You’re not answering the question I asked; you’re just giving some random lecture. This is just some random lecture about electricity prices. Mr C.C. PORTER : It is a complicated question and it is a complicated industry. Mrs M.H. Roberts : Over the next three years are you putting more in or are you ripping more out? The SPEAKER : Member for Midland, I will give you an opportunity to ask a supplementary question in a moment. I will also give the Treasurer the opportunity to conclude the answer to this question. Mr C.C. PORTER : It depends on what the price increases are. I will not speculate on those now. I have given two examples. If we adopt Labor Party policy and freeze electricity prices, the direct subsidies from the state budget to the electricity utilities will be $3.25 billion. We should just keep in mind that the average infrastructure spend of the Labor government was just over $3 billion each year that the Labor Party was in government. A freeze on electricity prices would mean that everything that the Labor Party spent on infrastructure on a yearly basis would not be able to occur. Getting to the exact point of the member’s question, it depends upon the price increase. If, for instance, there was a five per cent increase over the next four years—five, five, five and five—that would cost the state budget and the taxpayers of Western Australia about $1.4 billion in direct subsidies to the utilities, which is a conservative estimate of the cost of generating and servicing electricity to households. In those circumstances, it is fair to say that the state government and the taxpayer would still be losing, even on account of dividends reaped from electricity utilities, because electricity utility profits are based upon government subsidies. They are profits on paper because they are profits made from the subsidies that go in from state government.
Mr C.C. PORTER : The two allegations are that we gouge money from — Mrs M.H. Roberts : You’re taking more than you’re giving back. It’s pretty simple, and it’s not what you advised the house last week. Mr C.C. PORTER : There are two allegations of gouging. One allegation is that we are gouging from the consumers of electricity in this state. The member for Midland said in a press release recently that the Liberal–National government seeks to gouge $3.5 billion out of electricity consumers. That figure is based on the modelling that we have had done by the Office of Energy and Treasury — Mr R.H. Cook : Which you won’t table. Mr E.S. Ripper : Troy would. Mr C.C. PORTER : I do not need saving to that extent just yet! That $3.25 billion is a reference to this figure. The modelling that we have had done by Treasury and the Office of Energy was about whether there would be a cost to the state government for the direct subsidy that we pay to utilities if there was a freeze on electricity prices. We noted that the very difficult decisions that this government made in the past 18 months, which have seen an increase in electricity prices to the tune of 46 per cent, were made because, in effective terms, the residential retail tariff for electricity had not increased since 1991. There had not been a price increase in electricity since the time that Nirvana’s Smells Like Teen Spirit was number 1 in the charts. The member for Midland is probably more a Baby Got Back girl, by Sir MixALot, which was also number 1 at the time. It was a long time ago. I cannot think of a single other good or service in the Western Australian economy that has effectively had its price frozen since 1991. This government came to office and was faced with the very difficult decision of continuing to pump money into the electricity utilities so that they could remain profitable and, in effect, keep the lights on, or to look at the way prices are structured and try to move reasonably and rationally towards cost reflectivity. What the previous government did was based on assumptions about cost made by the Office of Energy in about 2007. It was interesting that the cost that the previous government assumed in that report changed from the time of the first draft report to the final draft report, because there are a great many reasons why the costs of generating electricity go up. The previous government assumed that it could reach some form of cost reflectivity with what it termed a community service obligation to the tune of about $760 million-odd. That money was placed directly into the utilities. Since the time of that report it has become clear to this government that the costs of generating electricity have now increased above and beyond the assumptions that underpinned that $700 million-odd. That means that based on the modelling we have, for every dollar prices do not go up — Mrs M.H. Roberts : You’re not answering the question I asked; you’re just giving some random lecture. This is just some random lecture about electricity prices. Mr C.C. PORTER : It is a complicated question and it is a complicated industry. Mrs M.H. Roberts : Over the next three years are you putting more in or are you ripping more out? The SPEAKER : Member for Midland, I will give you an opportunity to ask a supplementary question in a moment. I will also give the Treasurer the opportunity to conclude the answer to this question. Mr C.C. PORTER : It depends on what the price increases are. I will not speculate on those now. I have given two examples. If we adopt Labor Party policy and freeze electricity prices, the direct subsidies from the state budget to the electricity utilities will be $3.25 billion. We should just keep in mind that the average infrastructure spend of the Labor government was just over $3 billion each year that the Labor Party was in government. A freeze on electricity prices would mean that everything that the Labor Party spent on infrastructure on a yearly basis would not be able to occur. Getting to the exact point of the member’s question, it depends upon the price increase. If, for instance, there was a five per cent increase over the next four years—five, five, five and five—that would cost the state budget and the taxpayers of Western Australia about $1.4 billion in direct subsidies to the utilities, which is a conservative estimate of the cost of generating and servicing electricity to households. In those circumstances, it is fair to say that the state government and the taxpayer would still be losing, even on account of dividends reaped from electricity utilities, because electricity utility profits are based upon government subsidies. They are profits on paper because they are profits made from the subsidies that go in from state government.
Mrs M.H. Roberts : You’re taking more than you’re giving back. It’s pretty simple, and it’s not what you advised the house last week. Mr C.C. PORTER : There are two allegations of gouging. One allegation is that we are gouging from the consumers of electricity in this state. The member for Midland said in a press release recently that the Liberal–National government seeks to gouge $3.5 billion out of electricity consumers. That figure is based on the modelling that we have had done by the Office of Energy and Treasury — Mr R.H. Cook : Which you won’t table. Mr E.S. Ripper : Troy would. Mr C.C. PORTER : I do not need saving to that extent just yet! That $3.25 billion is a reference to this figure. The modelling that we have had done by Treasury and the Office of Energy was about whether there would be a cost to the state government for the direct subsidy that we pay to utilities if there was a freeze on electricity prices. We noted that the very difficult decisions that this government made in the past 18 months, which have seen an increase in electricity prices to the tune of 46 per cent, were made because, in effective terms, the residential retail tariff for electricity had not increased since 1991. There had not been a price increase in electricity since the time that Nirvana’s Smells Like Teen Spirit was number 1 in the charts. The member for Midland is probably more a Baby Got Back girl, by Sir MixALot, which was also number 1 at the time. It was a long time ago. I cannot think of a single other good or service in the Western Australian economy that has effectively had its price frozen since 1991. This government came to office and was faced with the very difficult decision of continuing to pump money into the electricity utilities so that they could remain profitable and, in effect, keep the lights on, or to look at the way prices are structured and try to move reasonably and rationally towards cost reflectivity. What the previous government did was based on assumptions about cost made by the Office of Energy in about 2007. It was interesting that the cost that the previous government assumed in that report changed from the time of the first draft report to the final draft report, because there are a great many reasons why the costs of generating electricity go up. The previous government assumed that it could reach some form of cost reflectivity with what it termed a community service obligation to the tune of about $760 million-odd. That money was placed directly into the utilities. Since the time of that report it has become clear to this government that the costs of generating electricity have now increased above and beyond the assumptions that underpinned that $700 million-odd. That means that based on the modelling we have, for every dollar prices do not go up — Mrs M.H. Roberts : You’re not answering the question I asked; you’re just giving some random lecture. This is just some random lecture about electricity prices. Mr C.C. PORTER : It is a complicated question and it is a complicated industry. Mrs M.H. Roberts : Over the next three years are you putting more in or are you ripping more out? The SPEAKER : Member for Midland, I will give you an opportunity to ask a supplementary question in a moment. I will also give the Treasurer the opportunity to conclude the answer to this question. Mr C.C. PORTER : It depends on what the price increases are. I will not speculate on those now. I have given two examples. If we adopt Labor Party policy and freeze electricity prices, the direct subsidies from the state budget to the electricity utilities will be $3.25 billion. We should just keep in mind that the average infrastructure spend of the Labor government was just over $3 billion each year that the Labor Party was in government. A freeze on electricity prices would mean that everything that the Labor Party spent on infrastructure on a yearly basis would not be able to occur. Getting to the exact point of the member’s question, it depends upon the price increase. If, for instance, there was a five per cent increase over the next four years—five, five, five and five—that would cost the state budget and the taxpayers of Western Australia about $1.4 billion in direct subsidies to the utilities, which is a conservative estimate of the cost of generating and servicing electricity to households. In those circumstances, it is fair to say that the state government and the taxpayer would still be losing, even on account of dividends reaped from electricity utilities, because electricity utility profits are based upon government subsidies. They are profits on paper because they are profits made from the subsidies that go in from state government.
Mr C.C. PORTER : There are two allegations of gouging. One allegation is that we are gouging from the consumers of electricity in this state. The member for Midland said in a press release recently that the Liberal–National government seeks to gouge $3.5 billion out of electricity consumers. That figure is based on the modelling that we have had done by the Office of Energy and Treasury — Mr R.H. Cook : Which you won’t table. Mr E.S. Ripper : Troy would. Mr C.C. PORTER : I do not need saving to that extent just yet! That $3.25 billion is a reference to this figure. The modelling that we have had done by Treasury and the Office of Energy was about whether there would be a cost to the state government for the direct subsidy that we pay to utilities if there was a freeze on electricity prices. We noted that the very difficult decisions that this government made in the past 18 months, which have seen an increase in electricity prices to the tune of 46 per cent, were made because, in effective terms, the residential retail tariff for electricity had not increased since 1991. There had not been a price increase in electricity since the time that Nirvana’s Smells Like Teen Spirit was number 1 in the charts. The member for Midland is probably more a Baby Got Back girl, by Sir MixALot, which was also number 1 at the time. It was a long time ago. I cannot think of a single other good or service in the Western Australian economy that has effectively had its price frozen since 1991. This government came to office and was faced with the very difficult decision of continuing to pump money into the electricity utilities so that they could remain profitable and, in effect, keep the lights on, or to look at the way prices are structured and try to move reasonably and rationally towards cost reflectivity. What the previous government did was based on assumptions about cost made by the Office of Energy in about 2007. It was interesting that the cost that the previous government assumed in that report changed from the time of the first draft report to the final draft report, because there are a great many reasons why the costs of generating electricity go up. The previous government assumed that it could reach some form of cost reflectivity with what it termed a community service obligation to the tune of about $760 million-odd. That money was placed directly into the utilities. Since the time of that report it has become clear to this government that the costs of generating electricity have now increased above and beyond the assumptions that underpinned that $700 million-odd. That means that based on the modelling we have, for every dollar prices do not go up — Mrs M.H. Roberts : You’re not answering the question I asked; you’re just giving some random lecture. This is just some random lecture about electricity prices. Mr C.C. PORTER : It is a complicated question and it is a complicated industry. Mrs M.H. Roberts : Over the next three years are you putting more in or are you ripping more out? The SPEAKER : Member for Midland, I will give you an opportunity to ask a supplementary question in a moment. I will also give the Treasurer the opportunity to conclude the answer to this question. Mr C.C. PORTER : It depends on what the price increases are. I will not speculate on those now. I have given two examples. If we adopt Labor Party policy and freeze electricity prices, the direct subsidies from the state budget to the electricity utilities will be $3.25 billion. We should just keep in mind that the average infrastructure spend of the Labor government was just over $3 billion each year that the Labor Party was in government. A freeze on electricity prices would mean that everything that the Labor Party spent on infrastructure on a yearly basis would not be able to occur. Getting to the exact point of the member’s question, it depends upon the price increase. If, for instance, there was a five per cent increase over the next four years—five, five, five and five—that would cost the state budget and the taxpayers of Western Australia about $1.4 billion in direct subsidies to the utilities, which is a conservative estimate of the cost of generating and servicing electricity to households. In those circumstances, it is fair to say that the state government and the taxpayer would still be losing, even on account of dividends reaped from electricity utilities, because electricity utility profits are based upon government subsidies. They are profits on paper because they are profits made from the subsidies that go in from state government.
Mr R.H. Cook : Which you won’t table. Mr E.S. Ripper : Troy would. Mr C.C. PORTER : I do not need saving to that extent just yet! That $3.25 billion is a reference to this figure. The modelling that we have had done by Treasury and the Office of Energy was about whether there would be a cost to the state government for the direct subsidy that we pay to utilities if there was a freeze on electricity prices. We noted that the very difficult decisions that this government made in the past 18 months, which have seen an increase in electricity prices to the tune of 46 per cent, were made because, in effective terms, the residential retail tariff for electricity had not increased since 1991. There had not been a price increase in electricity since the time that Nirvana’s Smells Like Teen Spirit was number 1 in the charts. The member for Midland is probably more a Baby Got Back girl, by Sir MixALot, which was also number 1 at the time. It was a long time ago. I cannot think of a single other good or service in the Western Australian economy that has effectively had its price frozen since 1991. This government came to office and was faced with the very difficult decision of continuing to pump money into the electricity utilities so that they could remain profitable and, in effect, keep the lights on, or to look at the way prices are structured and try to move reasonably and rationally towards cost reflectivity. What the previous government did was based on assumptions about cost made by the Office of Energy in about 2007. It was interesting that the cost that the previous government assumed in that report changed from the time of the first draft report to the final draft report, because there are a great many reasons why the costs of generating electricity go up. The previous government assumed that it could reach some form of cost reflectivity with what it termed a community service obligation to the tune of about $760 million-odd. That money was placed directly into the utilities. Since the time of that report it has become clear to this government that the costs of generating electricity have now increased above and beyond the assumptions that underpinned that $700 million-odd. That means that based on the modelling we have, for every dollar prices do not go up — Mrs M.H. Roberts : You’re not answering the question I asked; you’re just giving some random lecture. This is just some random lecture about electricity prices. Mr C.C. PORTER : It is a complicated question and it is a complicated industry. Mrs M.H. Roberts : Over the next three years are you putting more in or are you ripping more out? The SPEAKER : Member for Midland, I will give you an opportunity to ask a supplementary question in a moment. I will also give the Treasurer the opportunity to conclude the answer to this question. Mr C.C. PORTER : It depends on what the price increases are. I will not speculate on those now. I have given two examples. If we adopt Labor Party policy and freeze electricity prices, the direct subsidies from the state budget to the electricity utilities will be $3.25 billion. We should just keep in mind that the average infrastructure spend of the Labor government was just over $3 billion each year that the Labor Party was in government. A freeze on electricity prices would mean that everything that the Labor Party spent on infrastructure on a yearly basis would not be able to occur. Getting to the exact point of the member’s question, it depends upon the price increase. If, for instance, there was a five per cent increase over the next four years—five, five, five and five—that would cost the state budget and the taxpayers of Western Australia about $1.4 billion in direct subsidies to the utilities, which is a conservative estimate of the cost of generating and servicing electricity to households. In those circumstances, it is fair to say that the state government and the taxpayer would still be losing, even on account of dividends reaped from electricity utilities, because electricity utility profits are based upon government subsidies. They are profits on paper because they are profits made from the subsidies that go in from state government.
Mr E.S. Ripper : Troy would. Mr C.C. PORTER : I do not need saving to that extent just yet! That $3.25 billion is a reference to this figure. The modelling that we have had done by Treasury and the Office of Energy was about whether there would be a cost to the state government for the direct subsidy that we pay to utilities if there was a freeze on electricity prices. We noted that the very difficult decisions that this government made in the past 18 months, which have seen an increase in electricity prices to the tune of 46 per cent, were made because, in effective terms, the residential retail tariff for electricity had not increased since 1991. There had not been a price increase in electricity since the time that Nirvana’s Smells Like Teen Spirit was number 1 in the charts. The member for Midland is probably more a Baby Got Back girl, by Sir MixALot, which was also number 1 at the time. It was a long time ago. I cannot think of a single other good or service in the Western Australian economy that has effectively had its price frozen since 1991. This government came to office and was faced with the very difficult decision of continuing to pump money into the electricity utilities so that they could remain profitable and, in effect, keep the lights on, or to look at the way prices are structured and try to move reasonably and rationally towards cost reflectivity. What the previous government did was based on assumptions about cost made by the Office of Energy in about 2007. It was interesting that the cost that the previous government assumed in that report changed from the time of the first draft report to the final draft report, because there are a great many reasons why the costs of generating electricity go up. The previous government assumed that it could reach some form of cost reflectivity with what it termed a community service obligation to the tune of about $760 million-odd. That money was placed directly into the utilities. Since the time of that report it has become clear to this government that the costs of generating electricity have now increased above and beyond the assumptions that underpinned that $700 million-odd. That means that based on the modelling we have, for every dollar prices do not go up — Mrs M.H. Roberts : You’re not answering the question I asked; you’re just giving some random lecture. This is just some random lecture about electricity prices. Mr C.C. PORTER : It is a complicated question and it is a complicated industry. Mrs M.H. Roberts : Over the next three years are you putting more in or are you ripping more out? The SPEAKER : Member for Midland, I will give you an opportunity to ask a supplementary question in a moment. I will also give the Treasurer the opportunity to conclude the answer to this question. Mr C.C. PORTER : It depends on what the price increases are. I will not speculate on those now. I have given two examples. If we adopt Labor Party policy and freeze electricity prices, the direct subsidies from the state budget to the electricity utilities will be $3.25 billion. We should just keep in mind that the average infrastructure spend of the Labor government was just over $3 billion each year that the Labor Party was in government. A freeze on electricity prices would mean that everything that the Labor Party spent on infrastructure on a yearly basis would not be able to occur. Getting to the exact point of the member’s question, it depends upon the price increase. If, for instance, there was a five per cent increase over the next four years—five, five, five and five—that would cost the state budget and the taxpayers of Western Australia about $1.4 billion in direct subsidies to the utilities, which is a conservative estimate of the cost of generating and servicing electricity to households. In those circumstances, it is fair to say that the state government and the taxpayer would still be losing, even on account of dividends reaped from electricity utilities, because electricity utility profits are based upon government subsidies. They are profits on paper because they are profits made from the subsidies that go in from state government.
Mr C.C. PORTER : I do not need saving to that extent just yet! That $3.25 billion is a reference to this figure. The modelling that we have had done by Treasury and the Office of Energy was about whether there would be a cost to the state government for the direct subsidy that we pay to utilities if there was a freeze on electricity prices. We noted that the very difficult decisions that this government made in the past 18 months, which have seen an increase in electricity prices to the tune of 46 per cent, were made because, in effective terms, the residential retail tariff for electricity had not increased since 1991. There had not been a price increase in electricity since the time that Nirvana’s Smells Like Teen Spirit was number 1 in the charts. The member for Midland is probably more a Baby Got Back girl, by Sir MixALot, which was also number 1 at the time. It was a long time ago. I cannot think of a single other good or service in the Western Australian economy that has effectively had its price frozen since 1991. This government came to office and was faced with the very difficult decision of continuing to pump money into the electricity utilities so that they could remain profitable and, in effect, keep the lights on, or to look at the way prices are structured and try to move reasonably and rationally towards cost reflectivity. What the previous government did was based on assumptions about cost made by the Office of Energy in about 2007. It was interesting that the cost that the previous government assumed in that report changed from the time of the first draft report to the final draft report, because there are a great many reasons why the costs of generating electricity go up. The previous government assumed that it could reach some form of cost reflectivity with what it termed a community service obligation to the tune of about $760 million-odd. That money was placed directly into the utilities. Since the time of that report it has become clear to this government that the costs of generating electricity have now increased above and beyond the assumptions that underpinned that $700 million-odd. That means that based on the modelling we have, for every dollar prices do not go up — Mrs M.H. Roberts : You’re not answering the question I asked; you’re just giving some random lecture. This is just some random lecture about electricity prices. Mr C.C. PORTER : It is a complicated question and it is a complicated industry. Mrs M.H. Roberts : Over the next three years are you putting more in or are you ripping more out? The SPEAKER : Member for Midland, I will give you an opportunity to ask a supplementary question in a moment. I will also give the Treasurer the opportunity to conclude the answer to this question. Mr C.C. PORTER : It depends on what the price increases are. I will not speculate on those now. I have given two examples. If we adopt Labor Party policy and freeze electricity prices, the direct subsidies from the state budget to the electricity utilities will be $3.25 billion. We should just keep in mind that the average infrastructure spend of the Labor government was just over $3 billion each year that the Labor Party was in government. A freeze on electricity prices would mean that everything that the Labor Party spent on infrastructure on a yearly basis would not be able to occur. Getting to the exact point of the member’s question, it depends upon the price increase. If, for instance, there was a five per cent increase over the next four years—five, five, five and five—that would cost the state budget and the taxpayers of Western Australia about $1.4 billion in direct subsidies to the utilities, which is a conservative estimate of the cost of generating and servicing electricity to households. In those circumstances, it is fair to say that the state government and the taxpayer would still be losing, even on account of dividends reaped from electricity utilities, because electricity utility profits are based upon government subsidies. They are profits on paper because they are profits made from the subsidies that go in from state government.
That $3.25 billion is a reference to this figure. The modelling that we have had done by Treasury and the Office of Energy was about whether there would be a cost to the state government for the direct subsidy that we pay to utilities if there was a freeze on electricity prices. We noted that the very difficult decisions that this government made in the past 18 months, which have seen an increase in electricity prices to the tune of 46 per cent, were made because, in effective terms, the residential retail tariff for electricity had not increased since 1991. There had not been a price increase in electricity since the time that Nirvana’s Smells Like Teen Spirit was number 1 in the charts. The member for Midland is probably more a Baby Got Back girl, by Sir MixALot, which was also number 1 at the time. It was a long time ago. I cannot think of a single other good or service in the Western Australian economy that has effectively had its price frozen since 1991. This government came to office and was faced with the very difficult decision of continuing to pump money into the electricity utilities so that they could remain profitable and, in effect, keep the lights on, or to look at the way prices are structured and try to move reasonably and rationally towards cost reflectivity. What the previous government did was based on assumptions about cost made by the Office of Energy in about 2007. It was interesting that the cost that the previous government assumed in that report changed from the time of the first draft report to the final draft report, because there are a great many reasons why the costs of generating electricity go up. The previous government assumed that it could reach some form of cost reflectivity with what it termed a community service obligation to the tune of about $760 million-odd. That money was placed directly into the utilities. Since the time of that report it has become clear to this government that the costs of generating electricity have now increased above and beyond the assumptions that underpinned that $700 million-odd. That means that based on the modelling we have, for every dollar prices do not go up — Mrs M.H. Roberts : You’re not answering the question I asked; you’re just giving some random lecture. This is just some random lecture about electricity prices. Mr C.C. PORTER : It is a complicated question and it is a complicated industry. Mrs M.H. Roberts : Over the next three years are you putting more in or are you ripping more out? The SPEAKER : Member for Midland, I will give you an opportunity to ask a supplementary question in a moment. I will also give the Treasurer the opportunity to conclude the answer to this question. Mr C.C. PORTER : It depends on what the price increases are. I will not speculate on those now. I have given two examples. If we adopt Labor Party policy and freeze electricity prices, the direct subsidies from the state budget to the electricity utilities will be $3.25 billion. We should just keep in mind that the average infrastructure spend of the Labor government was just over $3 billion each year that the Labor Party was in government. A freeze on electricity prices would mean that everything that the Labor Party spent on infrastructure on a yearly basis would not be able to occur. Getting to the exact point of the member’s question, it depends upon the price increase. If, for instance, there was a five per cent increase over the next four years—five, five, five and five—that would cost the state budget and the taxpayers of Western Australia about $1.4 billion in direct subsidies to the utilities, which is a conservative estimate of the cost of generating and servicing electricity to households. In those circumstances, it is fair to say that the state government and the taxpayer would still be losing, even on account of dividends reaped from electricity utilities, because electricity utility profits are based upon government subsidies. They are profits on paper because they are profits made from the subsidies that go in from state government.
What the previous government did was based on assumptions about cost made by the Office of Energy in about 2007. It was interesting that the cost that the previous government assumed in that report changed from the time of the first draft report to the final draft report, because there are a great many reasons why the costs of generating electricity go up. The previous government assumed that it could reach some form of cost reflectivity with what it termed a community service obligation to the tune of about $760 million-odd. That money was placed directly into the utilities. Since the time of that report it has become clear to this government that the costs of generating electricity have now increased above and beyond the assumptions that underpinned that $700 million-odd. That means that based on the modelling we have, for every dollar prices do not go up — Mrs M.H. Roberts : You’re not answering the question I asked; you’re just giving some random lecture. This is just some random lecture about electricity prices. Mr C.C. PORTER : It is a complicated question and it is a complicated industry. Mrs M.H. Roberts : Over the next three years are you putting more in or are you ripping more out? The SPEAKER : Member for Midland, I will give you an opportunity to ask a supplementary question in a moment. I will also give the Treasurer the opportunity to conclude the answer to this question. Mr C.C. PORTER : It depends on what the price increases are. I will not speculate on those now. I have given two examples. If we adopt Labor Party policy and freeze electricity prices, the direct subsidies from the state budget to the electricity utilities will be $3.25 billion. We should just keep in mind that the average infrastructure spend of the Labor government was just over $3 billion each year that the Labor Party was in government. A freeze on electricity prices would mean that everything that the Labor Party spent on infrastructure on a yearly basis would not be able to occur. Getting to the exact point of the member’s question, it depends upon the price increase. If, for instance, there was a five per cent increase over the next four years—five, five, five and five—that would cost the state budget and the taxpayers of Western Australia about $1.4 billion in direct subsidies to the utilities, which is a conservative estimate of the cost of generating and servicing electricity to households. In those circumstances, it is fair to say that the state government and the taxpayer would still be losing, even on account of dividends reaped from electricity utilities, because electricity utility profits are based upon government subsidies. They are profits on paper because they are profits made from the subsidies that go in from state government.
Mrs M.H. Roberts : You’re not answering the question I asked; you’re just giving some random lecture. This is just some random lecture about electricity prices. Mr C.C. PORTER : It is a complicated question and it is a complicated industry. Mrs M.H. Roberts : Over the next three years are you putting more in or are you ripping more out? The SPEAKER : Member for Midland, I will give you an opportunity to ask a supplementary question in a moment. I will also give the Treasurer the opportunity to conclude the answer to this question. Mr C.C. PORTER : It depends on what the price increases are. I will not speculate on those now. I have given two examples. If we adopt Labor Party policy and freeze electricity prices, the direct subsidies from the state budget to the electricity utilities will be $3.25 billion. We should just keep in mind that the average infrastructure spend of the Labor government was just over $3 billion each year that the Labor Party was in government. A freeze on electricity prices would mean that everything that the Labor Party spent on infrastructure on a yearly basis would not be able to occur. Getting to the exact point of the member’s question, it depends upon the price increase. If, for instance, there was a five per cent increase over the next four years—five, five, five and five—that would cost the state budget and the taxpayers of Western Australia about $1.4 billion in direct subsidies to the utilities, which is a conservative estimate of the cost of generating and servicing electricity to households. In those circumstances, it is fair to say that the state government and the taxpayer would still be losing, even on account of dividends reaped from electricity utilities, because electricity utility profits are based upon government subsidies. They are profits on paper because they are profits made from the subsidies that go in from state government.
Mr C.C. PORTER : It is a complicated question and it is a complicated industry. Mrs M.H. Roberts : Over the next three years are you putting more in or are you ripping more out? The SPEAKER : Member for Midland, I will give you an opportunity to ask a supplementary question in a moment. I will also give the Treasurer the opportunity to conclude the answer to this question. Mr C.C. PORTER : It depends on what the price increases are. I will not speculate on those now. I have given two examples. If we adopt Labor Party policy and freeze electricity prices, the direct subsidies from the state budget to the electricity utilities will be $3.25 billion. We should just keep in mind that the average infrastructure spend of the Labor government was just over $3 billion each year that the Labor Party was in government. A freeze on electricity prices would mean that everything that the Labor Party spent on infrastructure on a yearly basis would not be able to occur. Getting to the exact point of the member’s question, it depends upon the price increase. If, for instance, there was a five per cent increase over the next four years—five, five, five and five—that would cost the state budget and the taxpayers of Western Australia about $1.4 billion in direct subsidies to the utilities, which is a conservative estimate of the cost of generating and servicing electricity to households. In those circumstances, it is fair to say that the state government and the taxpayer would still be losing, even on account of dividends reaped from electricity utilities, because electricity utility profits are based upon government subsidies. They are profits on paper because they are profits made from the subsidies that go in from state government.
Mrs M.H. Roberts : Over the next three years are you putting more in or are you ripping more out? The SPEAKER : Member for Midland, I will give you an opportunity to ask a supplementary question in a moment. I will also give the Treasurer the opportunity to conclude the answer to this question. Mr C.C. PORTER : It depends on what the price increases are. I will not speculate on those now. I have given two examples. If we adopt Labor Party policy and freeze electricity prices, the direct subsidies from the state budget to the electricity utilities will be $3.25 billion. We should just keep in mind that the average infrastructure spend of the Labor government was just over $3 billion each year that the Labor Party was in government. A freeze on electricity prices would mean that everything that the Labor Party spent on infrastructure on a yearly basis would not be able to occur. Getting to the exact point of the member’s question, it depends upon the price increase. If, for instance, there was a five per cent increase over the next four years—five, five, five and five—that would cost the state budget and the taxpayers of Western Australia about $1.4 billion in direct subsidies to the utilities, which is a conservative estimate of the cost of generating and servicing electricity to households. In those circumstances, it is fair to say that the state government and the taxpayer would still be losing, even on account of dividends reaped from electricity utilities, because electricity utility profits are based upon government subsidies. They are profits on paper because they are profits made from the subsidies that go in from state government.
The SPEAKER : Member for Midland, I will give you an opportunity to ask a supplementary question in a moment. I will also give the Treasurer the opportunity to conclude the answer to this question. Mr C.C. PORTER : It depends on what the price increases are. I will not speculate on those now. I have given two examples. If we adopt Labor Party policy and freeze electricity prices, the direct subsidies from the state budget to the electricity utilities will be $3.25 billion. We should just keep in mind that the average infrastructure spend of the Labor government was just over $3 billion each year that the Labor Party was in government. A freeze on electricity prices would mean that everything that the Labor Party spent on infrastructure on a yearly basis would not be able to occur. Getting to the exact point of the member’s question, it depends upon the price increase. If, for instance, there was a five per cent increase over the next four years—five, five, five and five—that would cost the state budget and the taxpayers of Western Australia about $1.4 billion in direct subsidies to the utilities, which is a conservative estimate of the cost of generating and servicing electricity to households. In those circumstances, it is fair to say that the state government and the taxpayer would still be losing, even on account of dividends reaped from electricity utilities, because electricity utility profits are based upon government subsidies. They are profits on paper because they are profits made from the subsidies that go in from state government.
Mr C.C. PORTER : It depends on what the price increases are. I will not speculate on those now. I have given two examples. If we adopt Labor Party policy and freeze electricity prices, the direct subsidies from the state budget to the electricity utilities will be $3.25 billion. We should just keep in mind that the average infrastructure spend of the Labor government was just over $3 billion each year that the Labor Party was in government. A freeze on electricity prices would mean that everything that the Labor Party spent on infrastructure on a yearly basis would not be able to occur. Getting to the exact point of the member’s question, it depends upon the price increase. If, for instance, there was a five per cent increase over the next four years—five, five, five and five—that would cost the state budget and the taxpayers of Western Australia about $1.4 billion in direct subsidies to the utilities, which is a conservative estimate of the cost of generating and servicing electricity to households. In those circumstances, it is fair to say that the state government and the taxpayer would still be losing, even on account of dividends reaped from electricity utilities, because electricity utility profits are based upon government subsidies. They are profits on paper because they are profits made from the subsidies that go in from state government.
Getting to the exact point of the member’s question, it depends upon the price increase. If, for instance, there was a five per cent increase over the next four years—five, five, five and five—that would cost the state budget and the taxpayers of Western Australia about $1.4 billion in direct subsidies to the utilities, which is a conservative estimate of the cost of generating and servicing electricity to households. In those circumstances, it is fair to say that the state government and the taxpayer would still be losing, even on account of dividends reaped from electricity utilities, because electricity utility profits are based upon government subsidies. They are profits on paper because they are profits made from the subsidies that go in from state government.
(1) Is it the case that the Treasurer will gouge from electricity providers, over the next three financial years, $1.1 billion net? (2) Why did the Treasurer mislead the house last week? (3) Will the Treasurer acknowledge that his clawback from Western Power and other electricity providers is a huge factor in people’s skyrocketing electricity bills? Mr C.C. PORTER replied: (1)–(3) The member accuses the government of “gouging” money in two ways — Mrs M.H. Roberts : Yes, over the next three financial years. Mr C.C. PORTER : The two allegations are that we gouge money from — Mrs M.H. Roberts : You’re taking more than you’re giving back. It’s pretty simple, and it’s not what you advised the house last week. Mr C.C. PORTER : There are two allegations of gouging. One allegation is that we are gouging from the consumers of electricity in this state. The member for Midland said in a press release recently that the Liberal–National government seeks to gouge $3.5 billion out of electricity consumers. That figure is based on the modelling that we have had done by the Office of Energy and Treasury — Mr R.H. Cook : Which you won’t table. Mr E.S. Ripper : Troy would. Mr C.C. PORTER : I do not need saving to that extent just yet! That $3.25 billion is a reference to this figure. The modelling that we have had done by Treasury and the Office of Energy was about whether there would be a cost to the state government for the direct subsidy that we pay to utilities if there was a freeze on electricity prices. We noted that the very difficult decisions that this government made in the past 18 months, which have seen an increase in electricity prices to the tune of 46 per cent, were made because, in effective terms, the residential retail tariff for electricity had not increased since 1991. There had not been a price increase in electricity since the time that Nirvana’s Smells Like Teen Spirit was number 1 in the charts. The member for Midland is probably more a Baby Got Back girl, by Sir MixALot, which was also number 1 at the time. It was a long time ago. I cannot think of a single other good or service in the Western Australian economy that has effectively had its price frozen since 1991. This government came to office and was faced with the very difficult decision of continuing to pump money into the electricity utilities so that they could remain profitable and, in effect, keep the lights on, or to look at the way prices are structured and try to move reasonably and rationally towards cost reflectivity. What the previous government did was based on assumptions about cost made by the Office of Energy in about 2007. It was interesting that the cost that the previous government assumed in that report changed from the time of the first draft report to the final draft report, because there are a great many reasons why the costs of generating electricity go up. The previous government assumed that it could reach some form of cost reflectivity with what it termed a community service obligation to the tune of about $760 million-odd. That money was placed directly into the utilities. Since the time of that report it has become clear to this government that the costs of generating electricity have now increased above and beyond the assumptions that underpinned that $700 million-odd. That means that based on the modelling we have, for every dollar prices do not go up — Mrs M.H. Roberts : You’re not answering the question I asked; you’re just giving some random lecture. This is just some random lecture about electricity prices. Mr C.C. PORTER : It is a complicated question and it is a complicated industry. Mrs M.H. Roberts : Over the next three years are you putting more in or are you ripping more out? The SPEAKER : Member for Midland, I will give you an opportunity to ask a supplementary question in a moment. I will also give the Treasurer the opportunity to conclude the answer to this question. Mr C.C. PORTER : It depends on what the price increases are. I will not speculate on those now. I have given two examples. If we adopt Labor Party policy and freeze electricity prices, the direct subsidies from the state budget to the electricity utilities will be $3.25 billion. We should just keep in mind that the average infrastructure spend of the Labor government was just over $3 billion each year that the Labor Party was in government. A freeze on electricity prices would mean that everything that the Labor Party spent on infrastructure on a yearly basis would not be able to occur. Getting to the exact point of the member’s question, it depends upon the price increase. If, for instance, there was a five per cent increase over the next four years—five, five, five and five—that would cost the state budget and the taxpayers of Western Australia about $1.4 billion in direct subsidies to the utilities, which is a conservative estimate of the cost of generating and servicing electricity to households. In those circumstances, it is fair to say that the state government and the taxpayer would still be losing, even on account of dividends reaped from electricity utilities, because electricity utility profits are based upon government subsidies. They are profits on paper because they are profits made from the subsidies that go in from state government.
(2) Why did the Treasurer mislead the house last week? (3) Will the Treasurer acknowledge that his clawback from Western Power and other electricity providers is a huge factor in people’s skyrocketing electricity bills? Mr C.C. PORTER replied: (1)–(3) The member accuses the government of “gouging” money in two ways — Mrs M.H. Roberts : Yes, over the next three financial years. Mr C.C. PORTER : The two allegations are that we gouge money from — Mrs M.H. Roberts : You’re taking more than you’re giving back. It’s pretty simple, and it’s not what you advised the house last week. Mr C.C. PORTER : There are two allegations of gouging. One allegation is that we are gouging from the consumers of electricity in this state. The member for Midland said in a press release recently that the Liberal–National government seeks to gouge $3.5 billion out of electricity consumers. That figure is based on the modelling that we have had done by the Office of Energy and Treasury — Mr R.H. Cook : Which you won’t table. Mr E.S. Ripper : Troy would. Mr C.C. PORTER : I do not need saving to that extent just yet! That $3.25 billion is a reference to this figure. The modelling that we have had done by Treasury and the Office of Energy was about whether there would be a cost to the state government for the direct subsidy that we pay to utilities if there was a freeze on electricity prices. We noted that the very difficult decisions that this government made in the past 18 months, which have seen an increase in electricity prices to the tune of 46 per cent, were made because, in effective terms, the residential retail tariff for electricity had not increased since 1991. There had not been a price increase in electricity since the time that Nirvana’s Smells Like Teen Spirit was number 1 in the charts. The member for Midland is probably more a Baby Got Back girl, by Sir MixALot, which was also number 1 at the time. It was a long time ago. I cannot think of a single other good or service in the Western Australian economy that has effectively had its price frozen since 1991. This government came to office and was faced with the very difficult decision of continuing to pump money into the electricity utilities so that they could remain profitable and, in effect, keep the lights on, or to look at the way prices are structured and try to move reasonably and rationally towards cost reflectivity. What the previous government did was based on assumptions about cost made by the Office of Energy in about 2007. It was interesting that the cost that the previous government assumed in that report changed from the time of the first draft report to the final draft report, because there are a great many reasons why the costs of generating electricity go up. The previous government assumed that it could reach some form of cost reflectivity with what it termed a community service obligation to the tune of about $760 million-odd. That money was placed directly into the utilities. Since the time of that report it has become clear to this government that the costs of generating electricity have now increased above and beyond the assumptions that underpinned that $700 million-odd. That means that based on the modelling we have, for every dollar prices do not go up — Mrs M.H. Roberts : You’re not answering the question I asked; you’re just giving some random lecture. This is just some random lecture about electricity prices. Mr C.C. PORTER : It is a complicated question and it is a complicated industry. Mrs M.H. Roberts : Over the next three years are you putting more in or are you ripping more out? The SPEAKER : Member for Midland, I will give you an opportunity to ask a supplementary question in a moment. I will also give the Treasurer the opportunity to conclude the answer to this question. Mr C.C. PORTER : It depends on what the price increases are. I will not speculate on those now. I have given two examples. If we adopt Labor Party policy and freeze electricity prices, the direct subsidies from the state budget to the electricity utilities will be $3.25 billion. We should just keep in mind that the average infrastructure spend of the Labor government was just over $3 billion each year that the Labor Party was in government. A freeze on electricity prices would mean that everything that the Labor Party spent on infrastructure on a yearly basis would not be able to occur. Getting to the exact point of the member’s question, it depends upon the price increase. If, for instance, there was a five per cent increase over the next four years—five, five, five and five—that would cost the state budget and the taxpayers of Western Australia about $1.4 billion in direct subsidies to the utilities, which is a conservative estimate of the cost of generating and servicing electricity to households. In those circumstances, it is fair to say that the state government and the taxpayer would still be losing, even on account of dividends reaped from electricity utilities, because electricity utility profits are based upon government subsidies. They are profits on paper because they are profits made from the subsidies that go in from state government.
(3) Will the Treasurer acknowledge that his clawback from Western Power and other electricity providers is a huge factor in people’s skyrocketing electricity bills? Mr C.C. PORTER replied: (1)–(3) The member accuses the government of “gouging” money in two ways — Mrs M.H. Roberts : Yes, over the next three financial years. Mr C.C. PORTER : The two allegations are that we gouge money from — Mrs M.H. Roberts : You’re taking more than you’re giving back. It’s pretty simple, and it’s not what you advised the house last week. Mr C.C. PORTER : There are two allegations of gouging. One allegation is that we are gouging from the consumers of electricity in this state. The member for Midland said in a press release recently that the Liberal–National government seeks to gouge $3.5 billion out of electricity consumers. That figure is based on the modelling that we have had done by the Office of Energy and Treasury — Mr R.H. Cook : Which you won’t table. Mr E.S. Ripper : Troy would. Mr C.C. PORTER : I do not need saving to that extent just yet! That $3.25 billion is a reference to this figure. The modelling that we have had done by Treasury and the Office of Energy was about whether there would be a cost to the state government for the direct subsidy that we pay to utilities if there was a freeze on electricity prices. We noted that the very difficult decisions that this government made in the past 18 months, which have seen an increase in electricity prices to the tune of 46 per cent, were made because, in effective terms, the residential retail tariff for electricity had not increased since 1991. There had not been a price increase in electricity since the time that Nirvana’s Smells Like Teen Spirit was number 1 in the charts. The member for Midland is probably more a Baby Got Back girl, by Sir MixALot, which was also number 1 at the time. It was a long time ago. I cannot think of a single other good or service in the Western Australian economy that has effectively had its price frozen since 1991. This government came to office and was faced with the very difficult decision of continuing to pump money into the electricity utilities so that they could remain profitable and, in effect, keep the lights on, or to look at the way prices are structured and try to move reasonably and rationally towards cost reflectivity. What the previous government did was based on assumptions about cost made by the Office of Energy in about 2007. It was interesting that the cost that the previous government assumed in that report changed from the time of the first draft report to the final draft report, because there are a great many reasons why the costs of generating electricity go up. The previous government assumed that it could reach some form of cost reflectivity with what it termed a community service obligation to the tune of about $760 million-odd. That money was placed directly into the utilities. Since the time of that report it has become clear to this government that the costs of generating electricity have now increased above and beyond the assumptions that underpinned that $700 million-odd. That means that based on the modelling we have, for every dollar prices do not go up — Mrs M.H. Roberts : You’re not answering the question I asked; you’re just giving some random lecture. This is just some random lecture about electricity prices. Mr C.C. PORTER : It is a complicated question and it is a complicated industry. Mrs M.H. Roberts : Over the next three years are you putting more in or are you ripping more out? The SPEAKER : Member for Midland, I will give you an opportunity to ask a supplementary question in a moment. I will also give the Treasurer the opportunity to conclude the answer to this question. Mr C.C. PORTER : It depends on what the price increases are. I will not speculate on those now. I have given two examples. If we adopt Labor Party policy and freeze electricity prices, the direct subsidies from the state budget to the electricity utilities will be $3.25 billion. We should just keep in mind that the average infrastructure spend of the Labor government was just over $3 billion each year that the Labor Party was in government. A freeze on electricity prices would mean that everything that the Labor Party spent on infrastructure on a yearly basis would not be able to occur. Getting to the exact point of the member’s question, it depends upon the price increase. If, for instance, there was a five per cent increase over the next four years—five, five, five and five—that would cost the state budget and the taxpayers of Western Australia about $1.4 billion in direct subsidies to the utilities, which is a conservative estimate of the cost of generating and servicing electricity to households. In those circumstances, it is fair to say that the state government and the taxpayer would still be losing, even on account of dividends reaped from electricity utilities, because electricity utility profits are based upon government subsidies. They are profits on paper because they are profits made from the subsidies that go in from state government.
Mr C.C. PORTER replied: (1)–(3) The member accuses the government of “gouging” money in two ways — Mrs M.H. Roberts : Yes, over the next three financial years. Mr C.C. PORTER : The two allegations are that we gouge money from — Mrs M.H. Roberts : You’re taking more than you’re giving back. It’s pretty simple, and it’s not what you advised the house last week. Mr C.C. PORTER : There are two allegations of gouging. One allegation is that we are gouging from the consumers of electricity in this state. The member for Midland said in a press release recently that the Liberal–National government seeks to gouge $3.5 billion out of electricity consumers. That figure is based on the modelling that we have had done by the Office of Energy and Treasury — Mr R.H. Cook : Which you won’t table. Mr E.S. Ripper : Troy would. Mr C.C. PORTER : I do not need saving to that extent just yet! That $3.25 billion is a reference to this figure. The modelling that we have had done by Treasury and the Office of Energy was about whether there would be a cost to the state government for the direct subsidy that we pay to utilities if there was a freeze on electricity prices. We noted that the very difficult decisions that this government made in the past 18 months, which have seen an increase in electricity prices to the tune of 46 per cent, were made because, in effective terms, the residential retail tariff for electricity had not increased since 1991. There had not been a price increase in electricity since the time that Nirvana’s Smells Like Teen Spirit was number 1 in the charts. The member for Midland is probably more a Baby Got Back girl, by Sir MixALot, which was also number 1 at the time. It was a long time ago. I cannot think of a single other good or service in the Western Australian economy that has effectively had its price frozen since 1991. This government came to office and was faced with the very difficult decision of continuing to pump money into the electricity utilities so that they could remain profitable and, in effect, keep the lights on, or to look at the way prices are structured and try to move reasonably and rationally towards cost reflectivity. What the previous government did was based on assumptions about cost made by the Office of Energy in about 2007. It was interesting that the cost that the previous government assumed in that report changed from the time of the first draft report to the final draft report, because there are a great many reasons why the costs of generating electricity go up. The previous government assumed that it could reach some form of cost reflectivity with what it termed a community service obligation to the tune of about $760 million-odd. That money was placed directly into the utilities. Since the time of that report it has become clear to this government that the costs of generating electricity have now increased above and beyond the assumptions that underpinned that $700 million-odd. That means that based on the modelling we have, for every dollar prices do not go up — Mrs M.H. Roberts : You’re not answering the question I asked; you’re just giving some random lecture. This is just some random lecture about electricity prices. Mr C.C. PORTER : It is a complicated question and it is a complicated industry. Mrs M.H. Roberts : Over the next three years are you putting more in or are you ripping more out? The SPEAKER : Member for Midland, I will give you an opportunity to ask a supplementary question in a moment. I will also give the Treasurer the opportunity to conclude the answer to this question. Mr C.C. PORTER : It depends on what the price increases are. I will not speculate on those now. I have given two examples. If we adopt Labor Party policy and freeze electricity prices, the direct subsidies from the state budget to the electricity utilities will be $3.25 billion. We should just keep in mind that the average infrastructure spend of the Labor government was just over $3 billion each year that the Labor Party was in government. A freeze on electricity prices would mean that everything that the Labor Party spent on infrastructure on a yearly basis would not be able to occur. Getting to the exact point of the member’s question, it depends upon the price increase. If, for instance, there was a five per cent increase over the next four years—five, five, five and five—that would cost the state budget and the taxpayers of Western Australia about $1.4 billion in direct subsidies to the utilities, which is a conservative estimate of the cost of generating and servicing electricity to households. In those circumstances, it is fair to say that the state government and the taxpayer would still be losing, even on account of dividends reaped from electricity utilities, because electricity utility profits are based upon government subsidies. They are profits on paper because they are profits made from the subsidies that go in from state government.
(1)–(3) The member accuses the government of “gouging” money in two ways — Mrs M.H. Roberts : Yes, over the next three financial years. Mr C.C. PORTER : The two allegations are that we gouge money from — Mrs M.H. Roberts : You’re taking more than you’re giving back. It’s pretty simple, and it’s not what you advised the house last week. Mr C.C. PORTER : There are two allegations of gouging. One allegation is that we are gouging from the consumers of electricity in this state. The member for Midland said in a press release recently that the Liberal–National government seeks to gouge $3.5 billion out of electricity consumers. That figure is based on the modelling that we have had done by the Office of Energy and Treasury — Mr R.H. Cook : Which you won’t table. Mr E.S. Ripper : Troy would. Mr C.C. PORTER : I do not need saving to that extent just yet! That $3.25 billion is a reference to this figure. The modelling that we have had done by Treasury and the Office of Energy was about whether there would be a cost to the state government for the direct subsidy that we pay to utilities if there was a freeze on electricity prices. We noted that the very difficult decisions that this government made in the past 18 months, which have seen an increase in electricity prices to the tune of 46 per cent, were made because, in effective terms, the residential retail tariff for electricity had not increased since 1991. There had not been a price increase in electricity since the time that Nirvana’s Smells Like Teen Spirit was number 1 in the charts. The member for Midland is probably more a Baby Got Back girl, by Sir MixALot, which was also number 1 at the time. It was a long time ago. I cannot think of a single other good or service in the Western Australian economy that has effectively had its price frozen since 1991. This government came to office and was faced with the very difficult decision of continuing to pump money into the electricity utilities so that they could remain profitable and, in effect, keep the lights on, or to look at the way prices are structured and try to move reasonably and rationally towards cost reflectivity. What the previous government did was based on assumptions about cost made by the Office of Energy in about 2007. It was interesting that the cost that the previous government assumed in that report changed from the time of the first draft report to the final draft report, because there are a great many reasons why the costs of generating electricity go up. The previous government assumed that it could reach some form of cost reflectivity with what it termed a community service obligation to the tune of about $760 million-odd. That money was placed directly into the utilities. Since the time of that report it has become clear to this government that the costs of generating electricity have now increased above and beyond the assumptions that underpinned that $700 million-odd. That means that based on the modelling we have, for every dollar prices do not go up — Mrs M.H. Roberts : You’re not answering the question I asked; you’re just giving some random lecture. This is just some random lecture about electricity prices. Mr C.C. PORTER : It is a complicated question and it is a complicated industry. Mrs M.H. Roberts : Over the next three years are you putting more in or are you ripping more out? The SPEAKER : Member for Midland, I will give you an opportunity to ask a supplementary question in a moment. I will also give the Treasurer the opportunity to conclude the answer to this question. Mr C.C. PORTER : It depends on what the price increases are. I will not speculate on those now. I have given two examples. If we adopt Labor Party policy and freeze electricity prices, the direct subsidies from the state budget to the electricity utilities will be $3.25 billion. We should just keep in mind that the average infrastructure spend of the Labor government was just over $3 billion each year that the Labor Party was in government. A freeze on electricity prices would mean that everything that the Labor Party spent on infrastructure on a yearly basis would not be able to occur. Getting to the exact point of the member’s question, it depends upon the price increase. If, for instance, there was a five per cent increase over the next four years—five, five, five and five—that would cost the state budget and the taxpayers of Western Australia about $1.4 billion in direct subsidies to the utilities, which is a conservative estimate of the cost of generating and servicing electricity to households. In those circumstances, it is fair to say that the state government and the taxpayer would still be losing, even on account of dividends reaped from electricity utilities, because electricity utility profits are based upon government subsidies. They are profits on paper because they are profits made from the subsidies that go in from state government.
Mrs M.H. Roberts : Yes, over the next three financial years. Mr C.C. PORTER : The two allegations are that we gouge money from — Mrs M.H. Roberts : You’re taking more than you’re giving back. It’s pretty simple, and it’s not what you advised the house last week. Mr C.C. PORTER : There are two allegations of gouging. One allegation is that we are gouging from the consumers of electricity in this state. The member for Midland said in a press release recently that the Liberal–National government seeks to gouge $3.5 billion out of electricity consumers. That figure is based on the modelling that we have had done by the Office of Energy and Treasury — Mr R.H. Cook : Which you won’t table. Mr E.S. Ripper : Troy would. Mr C.C. PORTER : I do not need saving to that extent just yet! That $3.25 billion is a reference to this figure. The modelling that we have had done by Treasury and the Office of Energy was about whether there would be a cost to the state government for the direct subsidy that we pay to utilities if there was a freeze on electricity prices. We noted that the very difficult decisions that this government made in the past 18 months, which have seen an increase in electricity prices to the tune of 46 per cent, were made because, in effective terms, the residential retail tariff for electricity had not increased since 1991. There had not been a price increase in electricity since the time that Nirvana’s Smells Like Teen Spirit was number 1 in the charts. The member for Midland is probably more a Baby Got Back girl, by Sir MixALot, which was also number 1 at the time. It was a long time ago. I cannot think of a single other good or service in the Western Australian economy that has effectively had its price frozen since 1991. This government came to office and was faced with the very difficult decision of continuing to pump money into the electricity utilities so that they could remain profitable and, in effect, keep the lights on, or to look at the way prices are structured and try to move reasonably and rationally towards cost reflectivity. What the previous government did was based on assumptions about cost made by the Office of Energy in about 2007. It was interesting that the cost that the previous government assumed in that report changed from the time of the first draft report to the final draft report, because there are a great many reasons why the costs of generating electricity go up. The previous government assumed that it could reach some form of cost reflectivity with what it termed a community service obligation to the tune of about $760 million-odd. That money was placed directly into the utilities. Since the time of that report it has become clear to this government that the costs of generating electricity have now increased above and beyond the assumptions that underpinned that $700 million-odd. That means that based on the modelling we have, for every dollar prices do not go up — Mrs M.H. Roberts : You’re not answering the question I asked; you’re just giving some random lecture. This is just some random lecture about electricity prices. Mr C.C. PORTER : It is a complicated question and it is a complicated industry. Mrs M.H. Roberts : Over the next three years are you putting more in or are you ripping more out? The SPEAKER : Member for Midland, I will give you an opportunity to ask a supplementary question in a moment. I will also give the Treasurer the opportunity to conclude the answer to this question. Mr C.C. PORTER : It depends on what the price increases are. I will not speculate on those now. I have given two examples. If we adopt Labor Party policy and freeze electricity prices, the direct subsidies from the state budget to the electricity utilities will be $3.25 billion. We should just keep in mind that the average infrastructure spend of the Labor government was just over $3 billion each year that the Labor Party was in government. A freeze on electricity prices would mean that everything that the Labor Party spent on infrastructure on a yearly basis would not be able to occur. Getting to the exact point of the member’s question, it depends upon the price increase. If, for instance, there was a five per cent increase over the next four years—five, five, five and five—that would cost the state budget and the taxpayers of Western Australia about $1.4 billion in direct subsidies to the utilities, which is a conservative estimate of the cost of generating and servicing electricity to households. In those circumstances, it is fair to say that the state government and the taxpayer would still be losing, even on account of dividends reaped from electricity utilities, because electricity utility profits are based upon government subsidies. They are profits on paper because they are profits made from the subsidies that go in from state government.
Mr C.C. PORTER : The two allegations are that we gouge money from — Mrs M.H. Roberts : You’re taking more than you’re giving back. It’s pretty simple, and it’s not what you advised the house last week. Mr C.C. PORTER : There are two allegations of gouging. One allegation is that we are gouging from the consumers of electricity in this state. The member for Midland said in a press release recently that the Liberal–National government seeks to gouge $3.5 billion out of electricity consumers. That figure is based on the modelling that we have had done by the Office of Energy and Treasury — Mr R.H. Cook : Which you won’t table. Mr E.S. Ripper : Troy would. Mr C.C. PORTER : I do not need saving to that extent just yet! That $3.25 billion is a reference to this figure. The modelling that we have had done by Treasury and the Office of Energy was about whether there would be a cost to the state government for the direct subsidy that we pay to utilities if there was a freeze on electricity prices. We noted that the very difficult decisions that this government made in the past 18 months, which have seen an increase in electricity prices to the tune of 46 per cent, were made because, in effective terms, the residential retail tariff for electricity had not increased since 1991. There had not been a price increase in electricity since the time that Nirvana’s Smells Like Teen Spirit was number 1 in the charts. The member for Midland is probably more a Baby Got Back girl, by Sir MixALot, which was also number 1 at the time. It was a long time ago. I cannot think of a single other good or service in the Western Australian economy that has effectively had its price frozen since 1991. This government came to office and was faced with the very difficult decision of continuing to pump money into the electricity utilities so that they could remain profitable and, in effect, keep the lights on, or to look at the way prices are structured and try to move reasonably and rationally towards cost reflectivity. What the previous government did was based on assumptions about cost made by the Office of Energy in about 2007. It was interesting that the cost that the previous government assumed in that report changed from the time of the first draft report to the final draft report, because there are a great many reasons why the costs of generating electricity go up. The previous government assumed that it could reach some form of cost reflectivity with what it termed a community service obligation to the tune of about $760 million-odd. That money was placed directly into the utilities. Since the time of that report it has become clear to this government that the costs of generating electricity have now increased above and beyond the assumptions that underpinned that $700 million-odd. That means that based on the modelling we have, for every dollar prices do not go up — Mrs M.H. Roberts : You’re not answering the question I asked; you’re just giving some random lecture. This is just some random lecture about electricity prices. Mr C.C. PORTER : It is a complicated question and it is a complicated industry. Mrs M.H. Roberts : Over the next three years are you putting more in or are you ripping more out? The SPEAKER : Member for Midland, I will give you an opportunity to ask a supplementary question in a moment. I will also give the Treasurer the opportunity to conclude the answer to this question. Mr C.C. PORTER : It depends on what the price increases are. I will not speculate on those now. I have given two examples. If we adopt Labor Party policy and freeze electricity prices, the direct subsidies from the state budget to the electricity utilities will be $3.25 billion. We should just keep in mind that the average infrastructure spend of the Labor government was just over $3 billion each year that the Labor Party was in government. A freeze on electricity prices would mean that everything that the Labor Party spent on infrastructure on a yearly basis would not be able to occur. Getting to the exact point of the member’s question, it depends upon the price increase. If, for instance, there was a five per cent increase over the next four years—five, five, five and five—that would cost the state budget and the taxpayers of Western Australia about $1.4 billion in direct subsidies to the utilities, which is a conservative estimate of the cost of generating and servicing electricity to households. In those circumstances, it is fair to say that the state government and the taxpayer would still be losing, even on account of dividends reaped from electricity utilities, because electricity utility profits are based upon government subsidies. They are profits on paper because they are profits made from the subsidies that go in from state government.
Mrs M.H. Roberts : You’re taking more than you’re giving back. It’s pretty simple, and it’s not what you advised the house last week. Mr C.C. PORTER : There are two allegations of gouging. One allegation is that we are gouging from the consumers of electricity in this state. The member for Midland said in a press release recently that the Liberal–National government seeks to gouge $3.5 billion out of electricity consumers. That figure is based on the modelling that we have had done by the Office of Energy and Treasury — Mr R.H. Cook : Which you won’t table. Mr E.S. Ripper : Troy would. Mr C.C. PORTER : I do not need saving to that extent just yet! That $3.25 billion is a reference to this figure. The modelling that we have had done by Treasury and the Office of Energy was about whether there would be a cost to the state government for the direct subsidy that we pay to utilities if there was a freeze on electricity prices. We noted that the very difficult decisions that this government made in the past 18 months, which have seen an increase in electricity prices to the tune of 46 per cent, were made because, in effective terms, the residential retail tariff for electricity had not increased since 1991. There had not been a price increase in electricity since the time that Nirvana’s Smells Like Teen Spirit was number 1 in the charts. The member for Midland is probably more a Baby Got Back girl, by Sir MixALot, which was also number 1 at the time. It was a long time ago. I cannot think of a single other good or service in the Western Australian economy that has effectively had its price frozen since 1991. This government came to office and was faced with the very difficult decision of continuing to pump money into the electricity utilities so that they could remain profitable and, in effect, keep the lights on, or to look at the way prices are structured and try to move reasonably and rationally towards cost reflectivity. What the previous government did was based on assumptions about cost made by the Office of Energy in about 2007. It was interesting that the cost that the previous government assumed in that report changed from the time of the first draft report to the final draft report, because there are a great many reasons why the costs of generating electricity go up. The previous government assumed that it could reach some form of cost reflectivity with what it termed a community service obligation to the tune of about $760 million-odd. That money was placed directly into the utilities. Since the time of that report it has become clear to this government that the costs of generating electricity have now increased above and beyond the assumptions that underpinned that $700 million-odd. That means that based on the modelling we have, for every dollar prices do not go up — Mrs M.H. Roberts : You’re not answering the question I asked; you’re just giving some random lecture. This is just some random lecture about electricity prices. Mr C.C. PORTER : It is a complicated question and it is a complicated industry. Mrs M.H. Roberts : Over the next three years are you putting more in or are you ripping more out? The SPEAKER : Member for Midland, I will give you an opportunity to ask a supplementary question in a moment. I will also give the Treasurer the opportunity to conclude the answer to this question. Mr C.C. PORTER : It depends on what the price increases are. I will not speculate on those now. I have given two examples. If we adopt Labor Party policy and freeze electricity prices, the direct subsidies from the state budget to the electricity utilities will be $3.25 billion. We should just keep in mind that the average infrastructure spend of the Labor government was just over $3 billion each year that the Labor Party was in government. A freeze on electricity prices would mean that everything that the Labor Party spent on infrastructure on a yearly basis would not be able to occur. Getting to the exact point of the member’s question, it depends upon the price increase. If, for instance, there was a five per cent increase over the next four years—five, five, five and five—that would cost the state budget and the taxpayers of Western Australia about $1.4 billion in direct subsidies to the utilities, which is a conservative estimate of the cost of generating and servicing electricity to households. In those circumstances, it is fair to say that the state government and the taxpayer would still be losing, even on account of dividends reaped from electricity utilities, because electricity utility profits are based upon government subsidies. They are profits on paper because they are profits made from the subsidies that go in from state government.
Mr C.C. PORTER : There are two allegations of gouging. One allegation is that we are gouging from the consumers of electricity in this state. The member for Midland said in a press release recently that the Liberal–National government seeks to gouge $3.5 billion out of electricity consumers. That figure is based on the modelling that we have had done by the Office of Energy and Treasury — Mr R.H. Cook : Which you won’t table. Mr E.S. Ripper : Troy would. Mr C.C. PORTER : I do not need saving to that extent just yet! That $3.25 billion is a reference to this figure. The modelling that we have had done by Treasury and the Office of Energy was about whether there would be a cost to the state government for the direct subsidy that we pay to utilities if there was a freeze on electricity prices. We noted that the very difficult decisions that this government made in the past 18 months, which have seen an increase in electricity prices to the tune of 46 per cent, were made because, in effective terms, the residential retail tariff for electricity had not increased since 1991. There had not been a price increase in electricity since the time that Nirvana’s Smells Like Teen Spirit was number 1 in the charts. The member for Midland is probably more a Baby Got Back girl, by Sir MixALot, which was also number 1 at the time. It was a long time ago. I cannot think of a single other good or service in the Western Australian economy that has effectively had its price frozen since 1991. This government came to office and was faced with the very difficult decision of continuing to pump money into the electricity utilities so that they could remain profitable and, in effect, keep the lights on, or to look at the way prices are structured and try to move reasonably and rationally towards cost reflectivity. What the previous government did was based on assumptions about cost made by the Office of Energy in about 2007. It was interesting that the cost that the previous government assumed in that report changed from the time of the first draft report to the final draft report, because there are a great many reasons why the costs of generating electricity go up. The previous government assumed that it could reach some form of cost reflectivity with what it termed a community service obligation to the tune of about $760 million-odd. That money was placed directly into the utilities. Since the time of that report it has become clear to this government that the costs of generating electricity have now increased above and beyond the assumptions that underpinned that $700 million-odd. That means that based on the modelling we have, for every dollar prices do not go up — Mrs M.H. Roberts : You’re not answering the question I asked; you’re just giving some random lecture. This is just some random lecture about electricity prices. Mr C.C. PORTER : It is a complicated question and it is a complicated industry. Mrs M.H. Roberts : Over the next three years are you putting more in or are you ripping more out? The SPEAKER : Member for Midland, I will give you an opportunity to ask a supplementary question in a moment. I will also give the Treasurer the opportunity to conclude the answer to this question. Mr C.C. PORTER : It depends on what the price increases are. I will not speculate on those now. I have given two examples. If we adopt Labor Party policy and freeze electricity prices, the direct subsidies from the state budget to the electricity utilities will be $3.25 billion. We should just keep in mind that the average infrastructure spend of the Labor government was just over $3 billion each year that the Labor Party was in government. A freeze on electricity prices would mean that everything that the Labor Party spent on infrastructure on a yearly basis would not be able to occur. Getting to the exact point of the member’s question, it depends upon the price increase. If, for instance, there was a five per cent increase over the next four years—five, five, five and five—that would cost the state budget and the taxpayers of Western Australia about $1.4 billion in direct subsidies to the utilities, which is a conservative estimate of the cost of generating and servicing electricity to households. In those circumstances, it is fair to say that the state government and the taxpayer would still be losing, even on account of dividends reaped from electricity utilities, because electricity utility profits are based upon government subsidies. They are profits on paper because they are profits made from the subsidies that go in from state government.
Mr R.H. Cook : Which you won’t table. Mr E.S. Ripper : Troy would. Mr C.C. PORTER : I do not need saving to that extent just yet! That $3.25 billion is a reference to this figure. The modelling that we have had done by Treasury and the Office of Energy was about whether there would be a cost to the state government for the direct subsidy that we pay to utilities if there was a freeze on electricity prices. We noted that the very difficult decisions that this government made in the past 18 months, which have seen an increase in electricity prices to the tune of 46 per cent, were made because, in effective terms, the residential retail tariff for electricity had not increased since 1991. There had not been a price increase in electricity since the time that Nirvana’s Smells Like Teen Spirit was number 1 in the charts. The member for Midland is probably more a Baby Got Back girl, by Sir MixALot, which was also number 1 at the time. It was a long time ago. I cannot think of a single other good or service in the Western Australian economy that has effectively had its price frozen since 1991. This government came to office and was faced with the very difficult decision of continuing to pump money into the electricity utilities so that they could remain profitable and, in effect, keep the lights on, or to look at the way prices are structured and try to move reasonably and rationally towards cost reflectivity. What the previous government did was based on assumptions about cost made by the Office of Energy in about 2007. It was interesting that the cost that the previous government assumed in that report changed from the time of the first draft report to the final draft report, because there are a great many reasons why the costs of generating electricity go up. The previous government assumed that it could reach some form of cost reflectivity with what it termed a community service obligation to the tune of about $760 million-odd. That money was placed directly into the utilities. Since the time of that report it has become clear to this government that the costs of generating electricity have now increased above and beyond the assumptions that underpinned that $700 million-odd. That means that based on the modelling we have, for every dollar prices do not go up — Mrs M.H. Roberts : You’re not answering the question I asked; you’re just giving some random lecture. This is just some random lecture about electricity prices. Mr C.C. PORTER : It is a complicated question and it is a complicated industry. Mrs M.H. Roberts : Over the next three years are you putting more in or are you ripping more out? The SPEAKER : Member for Midland, I will give you an opportunity to ask a supplementary question in a moment. I will also give the Treasurer the opportunity to conclude the answer to this question. Mr C.C. PORTER : It depends on what the price increases are. I will not speculate on those now. I have given two examples. If we adopt Labor Party policy and freeze electricity prices, the direct subsidies from the state budget to the electricity utilities will be $3.25 billion. We should just keep in mind that the average infrastructure spend of the Labor government was just over $3 billion each year that the Labor Party was in government. A freeze on electricity prices would mean that everything that the Labor Party spent on infrastructure on a yearly basis would not be able to occur. Getting to the exact point of the member’s question, it depends upon the price increase. If, for instance, there was a five per cent increase over the next four years—five, five, five and five—that would cost the state budget and the taxpayers of Western Australia about $1.4 billion in direct subsidies to the utilities, which is a conservative estimate of the cost of generating and servicing electricity to households. In those circumstances, it is fair to say that the state government and the taxpayer would still be losing, even on account of dividends reaped from electricity utilities, because electricity utility profits are based upon government subsidies. They are profits on paper because they are profits made from the subsidies that go in from state government.
Mr E.S. Ripper : Troy would. Mr C.C. PORTER : I do not need saving to that extent just yet! That $3.25 billion is a reference to this figure. The modelling that we have had done by Treasury and the Office of Energy was about whether there would be a cost to the state government for the direct subsidy that we pay to utilities if there was a freeze on electricity prices. We noted that the very difficult decisions that this government made in the past 18 months, which have seen an increase in electricity prices to the tune of 46 per cent, were made because, in effective terms, the residential retail tariff for electricity had not increased since 1991. There had not been a price increase in electricity since the time that Nirvana’s Smells Like Teen Spirit was number 1 in the charts. The member for Midland is probably more a Baby Got Back girl, by Sir MixALot, which was also number 1 at the time. It was a long time ago. I cannot think of a single other good or service in the Western Australian economy that has effectively had its price frozen since 1991. This government came to office and was faced with the very difficult decision of continuing to pump money into the electricity utilities so that they could remain profitable and, in effect, keep the lights on, or to look at the way prices are structured and try to move reasonably and rationally towards cost reflectivity. What the previous government did was based on assumptions about cost made by the Office of Energy in about 2007. It was interesting that the cost that the previous government assumed in that report changed from the time of the first draft report to the final draft report, because there are a great many reasons why the costs of generating electricity go up. The previous government assumed that it could reach some form of cost reflectivity with what it termed a community service obligation to the tune of about $760 million-odd. That money was placed directly into the utilities. Since the time of that report it has become clear to this government that the costs of generating electricity have now increased above and beyond the assumptions that underpinned that $700 million-odd. That means that based on the modelling we have, for every dollar prices do not go up — Mrs M.H. Roberts : You’re not answering the question I asked; you’re just giving some random lecture. This is just some random lecture about electricity prices. Mr C.C. PORTER : It is a complicated question and it is a complicated industry. Mrs M.H. Roberts : Over the next three years are you putting more in or are you ripping more out? The SPEAKER : Member for Midland, I will give you an opportunity to ask a supplementary question in a moment. I will also give the Treasurer the opportunity to conclude the answer to this question. Mr C.C. PORTER : It depends on what the price increases are. I will not speculate on those now. I have given two examples. If we adopt Labor Party policy and freeze electricity prices, the direct subsidies from the state budget to the electricity utilities will be $3.25 billion. We should just keep in mind that the average infrastructure spend of the Labor government was just over $3 billion each year that the Labor Party was in government. A freeze on electricity prices would mean that everything that the Labor Party spent on infrastructure on a yearly basis would not be able to occur. Getting to the exact point of the member’s question, it depends upon the price increase. If, for instance, there was a five per cent increase over the next four years—five, five, five and five—that would cost the state budget and the taxpayers of Western Australia about $1.4 billion in direct subsidies to the utilities, which is a conservative estimate of the cost of generating and servicing electricity to households. In those circumstances, it is fair to say that the state government and the taxpayer would still be losing, even on account of dividends reaped from electricity utilities, because electricity utility profits are based upon government subsidies. They are profits on paper because they are profits made from the subsidies that go in from state government.
Mr C.C. PORTER : I do not need saving to that extent just yet! That $3.25 billion is a reference to this figure. The modelling that we have had done by Treasury and the Office of Energy was about whether there would be a cost to the state government for the direct subsidy that we pay to utilities if there was a freeze on electricity prices. We noted that the very difficult decisions that this government made in the past 18 months, which have seen an increase in electricity prices to the tune of 46 per cent, were made because, in effective terms, the residential retail tariff for electricity had not increased since 1991. There had not been a price increase in electricity since the time that Nirvana’s Smells Like Teen Spirit was number 1 in the charts. The member for Midland is probably more a Baby Got Back girl, by Sir MixALot, which was also number 1 at the time. It was a long time ago. I cannot think of a single other good or service in the Western Australian economy that has effectively had its price frozen since 1991. This government came to office and was faced with the very difficult decision of continuing to pump money into the electricity utilities so that they could remain profitable and, in effect, keep the lights on, or to look at the way prices are structured and try to move reasonably and rationally towards cost reflectivity. What the previous government did was based on assumptions about cost made by the Office of Energy in about 2007. It was interesting that the cost that the previous government assumed in that report changed from the time of the first draft report to the final draft report, because there are a great many reasons why the costs of generating electricity go up. The previous government assumed that it could reach some form of cost reflectivity with what it termed a community service obligation to the tune of about $760 million-odd. That money was placed directly into the utilities. Since the time of that report it has become clear to this government that the costs of generating electricity have now increased above and beyond the assumptions that underpinned that $700 million-odd. That means that based on the modelling we have, for every dollar prices do not go up — Mrs M.H. Roberts : You’re not answering the question I asked; you’re just giving some random lecture. This is just some random lecture about electricity prices. Mr C.C. PORTER : It is a complicated question and it is a complicated industry. Mrs M.H. Roberts : Over the next three years are you putting more in or are you ripping more out? The SPEAKER : Member for Midland, I will give you an opportunity to ask a supplementary question in a moment. I will also give the Treasurer the opportunity to conclude the answer to this question. Mr C.C. PORTER : It depends on what the price increases are. I will not speculate on those now. I have given two examples. If we adopt Labor Party policy and freeze electricity prices, the direct subsidies from the state budget to the electricity utilities will be $3.25 billion. We should just keep in mind that the average infrastructure spend of the Labor government was just over $3 billion each year that the Labor Party was in government. A freeze on electricity prices would mean that everything that the Labor Party spent on infrastructure on a yearly basis would not be able to occur. Getting to the exact point of the member’s question, it depends upon the price increase. If, for instance, there was a five per cent increase over the next four years—five, five, five and five—that would cost the state budget and the taxpayers of Western Australia about $1.4 billion in direct subsidies to the utilities, which is a conservative estimate of the cost of generating and servicing electricity to households. In those circumstances, it is fair to say that the state government and the taxpayer would still be losing, even on account of dividends reaped from electricity utilities, because electricity utility profits are based upon government subsidies. They are profits on paper because they are profits made from the subsidies that go in from state government.
That $3.25 billion is a reference to this figure. The modelling that we have had done by Treasury and the Office of Energy was about whether there would be a cost to the state government for the direct subsidy that we pay to utilities if there was a freeze on electricity prices. We noted that the very difficult decisions that this government made in the past 18 months, which have seen an increase in electricity prices to the tune of 46 per cent, were made because, in effective terms, the residential retail tariff for electricity had not increased since 1991. There had not been a price increase in electricity since the time that Nirvana’s Smells Like Teen Spirit was number 1 in the charts. The member for Midland is probably more a Baby Got Back girl, by Sir MixALot, which was also number 1 at the time. It was a long time ago. I cannot think of a single other good or service in the Western Australian economy that has effectively had its price frozen since 1991. This government came to office and was faced with the very difficult decision of continuing to pump money into the electricity utilities so that they could remain profitable and, in effect, keep the lights on, or to look at the way prices are structured and try to move reasonably and rationally towards cost reflectivity. What the previous government did was based on assumptions about cost made by the Office of Energy in about 2007. It was interesting that the cost that the previous government assumed in that report changed from the time of the first draft report to the final draft report, because there are a great many reasons why the costs of generating electricity go up. The previous government assumed that it could reach some form of cost reflectivity with what it termed a community service obligation to the tune of about $760 million-odd. That money was placed directly into the utilities. Since the time of that report it has become clear to this government that the costs of generating electricity have now increased above and beyond the assumptions that underpinned that $700 million-odd. That means that based on the modelling we have, for every dollar prices do not go up — Mrs M.H. Roberts : You’re not answering the question I asked; you’re just giving some random lecture. This is just some random lecture about electricity prices. Mr C.C. PORTER : It is a complicated question and it is a complicated industry. Mrs M.H. Roberts : Over the next three years are you putting more in or are you ripping more out? The SPEAKER : Member for Midland, I will give you an opportunity to ask a supplementary question in a moment. I will also give the Treasurer the opportunity to conclude the answer to this question. Mr C.C. PORTER : It depends on what the price increases are. I will not speculate on those now. I have given two examples. If we adopt Labor Party policy and freeze electricity prices, the direct subsidies from the state budget to the electricity utilities will be $3.25 billion. We should just keep in mind that the average infrastructure spend of the Labor government was just over $3 billion each year that the Labor Party was in government. A freeze on electricity prices would mean that everything that the Labor Party spent on infrastructure on a yearly basis would not be able to occur. Getting to the exact point of the member’s question, it depends upon the price increase. If, for instance, there was a five per cent increase over the next four years—five, five, five and five—that would cost the state budget and the taxpayers of Western Australia about $1.4 billion in direct subsidies to the utilities, which is a conservative estimate of the cost of generating and servicing electricity to households. In those circumstances, it is fair to say that the state government and the taxpayer would still be losing, even on account of dividends reaped from electricity utilities, because electricity utility profits are based upon government subsidies. They are profits on paper because they are profits made from the subsidies that go in from state government.
What the previous government did was based on assumptions about cost made by the Office of Energy in about 2007. It was interesting that the cost that the previous government assumed in that report changed from the time of the first draft report to the final draft report, because there are a great many reasons why the costs of generating electricity go up. The previous government assumed that it could reach some form of cost reflectivity with what it termed a community service obligation to the tune of about $760 million-odd. That money was placed directly into the utilities. Since the time of that report it has become clear to this government that the costs of generating electricity have now increased above and beyond the assumptions that underpinned that $700 million-odd. That means that based on the modelling we have, for every dollar prices do not go up — Mrs M.H. Roberts : You’re not answering the question I asked; you’re just giving some random lecture. This is just some random lecture about electricity prices. Mr C.C. PORTER : It is a complicated question and it is a complicated industry. Mrs M.H. Roberts : Over the next three years are you putting more in or are you ripping more out? The SPEAKER : Member for Midland, I will give you an opportunity to ask a supplementary question in a moment. I will also give the Treasurer the opportunity to conclude the answer to this question. Mr C.C. PORTER : It depends on what the price increases are. I will not speculate on those now. I have given two examples. If we adopt Labor Party policy and freeze electricity prices, the direct subsidies from the state budget to the electricity utilities will be $3.25 billion. We should just keep in mind that the average infrastructure spend of the Labor government was just over $3 billion each year that the Labor Party was in government. A freeze on electricity prices would mean that everything that the Labor Party spent on infrastructure on a yearly basis would not be able to occur. Getting to the exact point of the member’s question, it depends upon the price increase. If, for instance, there was a five per cent increase over the next four years—five, five, five and five—that would cost the state budget and the taxpayers of Western Australia about $1.4 billion in direct subsidies to the utilities, which is a conservative estimate of the cost of generating and servicing electricity to households. In those circumstances, it is fair to say that the state government and the taxpayer would still be losing, even on account of dividends reaped from electricity utilities, because electricity utility profits are based upon government subsidies. They are profits on paper because they are profits made from the subsidies that go in from state government.
Mrs M.H. Roberts : You’re not answering the question I asked; you’re just giving some random lecture. This is just some random lecture about electricity prices. Mr C.C. PORTER : It is a complicated question and it is a complicated industry. Mrs M.H. Roberts : Over the next three years are you putting more in or are you ripping more out? The SPEAKER : Member for Midland, I will give you an opportunity to ask a supplementary question in a moment. I will also give the Treasurer the opportunity to conclude the answer to this question. Mr C.C. PORTER : It depends on what the price increases are. I will not speculate on those now. I have given two examples. If we adopt Labor Party policy and freeze electricity prices, the direct subsidies from the state budget to the electricity utilities will be $3.25 billion. We should just keep in mind that the average infrastructure spend of the Labor government was just over $3 billion each year that the Labor Party was in government. A freeze on electricity prices would mean that everything that the Labor Party spent on infrastructure on a yearly basis would not be able to occur. Getting to the exact point of the member’s question, it depends upon the price increase. If, for instance, there was a five per cent increase over the next four years—five, five, five and five—that would cost the state budget and the taxpayers of Western Australia about $1.4 billion in direct subsidies to the utilities, which is a conservative estimate of the cost of generating and servicing electricity to households. In those circumstances, it is fair to say that the state government and the taxpayer would still be losing, even on account of dividends reaped from electricity utilities, because electricity utility profits are based upon government subsidies. They are profits on paper because they are profits made from the subsidies that go in from state government.
Mr C.C. PORTER : It is a complicated question and it is a complicated industry. Mrs M.H. Roberts : Over the next three years are you putting more in or are you ripping more out? The SPEAKER : Member for Midland, I will give you an opportunity to ask a supplementary question in a moment. I will also give the Treasurer the opportunity to conclude the answer to this question. Mr C.C. PORTER : It depends on what the price increases are. I will not speculate on those now. I have given two examples. If we adopt Labor Party policy and freeze electricity prices, the direct subsidies from the state budget to the electricity utilities will be $3.25 billion. We should just keep in mind that the average infrastructure spend of the Labor government was just over $3 billion each year that the Labor Party was in government. A freeze on electricity prices would mean that everything that the Labor Party spent on infrastructure on a yearly basis would not be able to occur. Getting to the exact point of the member’s question, it depends upon the price increase. If, for instance, there was a five per cent increase over the next four years—five, five, five and five—that would cost the state budget and the taxpayers of Western Australia about $1.4 billion in direct subsidies to the utilities, which is a conservative estimate of the cost of generating and servicing electricity to households. In those circumstances, it is fair to say that the state government and the taxpayer would still be losing, even on account of dividends reaped from electricity utilities, because electricity utility profits are based upon government subsidies. They are profits on paper because they are profits made from the subsidies that go in from state government.
Mrs M.H. Roberts : Over the next three years are you putting more in or are you ripping more out? The SPEAKER : Member for Midland, I will give you an opportunity to ask a supplementary question in a moment. I will also give the Treasurer the opportunity to conclude the answer to this question. Mr C.C. PORTER : It depends on what the price increases are. I will not speculate on those now. I have given two examples. If we adopt Labor Party policy and freeze electricity prices, the direct subsidies from the state budget to the electricity utilities will be $3.25 billion. We should just keep in mind that the average infrastructure spend of the Labor government was just over $3 billion each year that the Labor Party was in government. A freeze on electricity prices would mean that everything that the Labor Party spent on infrastructure on a yearly basis would not be able to occur. Getting to the exact point of the member’s question, it depends upon the price increase. If, for instance, there was a five per cent increase over the next four years—five, five, five and five—that would cost the state budget and the taxpayers of Western Australia about $1.4 billion in direct subsidies to the utilities, which is a conservative estimate of the cost of generating and servicing electricity to households. In those circumstances, it is fair to say that the state government and the taxpayer would still be losing, even on account of dividends reaped from electricity utilities, because electricity utility profits are based upon government subsidies. They are profits on paper because they are profits made from the subsidies that go in from state government.
The SPEAKER : Member for Midland, I will give you an opportunity to ask a supplementary question in a moment. I will also give the Treasurer the opportunity to conclude the answer to this question. Mr C.C. PORTER : It depends on what the price increases are. I will not speculate on those now. I have given two examples. If we adopt Labor Party policy and freeze electricity prices, the direct subsidies from the state budget to the electricity utilities will be $3.25 billion. We should just keep in mind that the average infrastructure spend of the Labor government was just over $3 billion each year that the Labor Party was in government. A freeze on electricity prices would mean that everything that the Labor Party spent on infrastructure on a yearly basis would not be able to occur. Getting to the exact point of the member’s question, it depends upon the price increase. If, for instance, there was a five per cent increase over the next four years—five, five, five and five—that would cost the state budget and the taxpayers of Western Australia about $1.4 billion in direct subsidies to the utilities, which is a conservative estimate of the cost of generating and servicing electricity to households. In those circumstances, it is fair to say that the state government and the taxpayer would still be losing, even on account of dividends reaped from electricity utilities, because electricity utility profits are based upon government subsidies. They are profits on paper because they are profits made from the subsidies that go in from state government.
Mr C.C. PORTER : It depends on what the price increases are. I will not speculate on those now. I have given two examples. If we adopt Labor Party policy and freeze electricity prices, the direct subsidies from the state budget to the electricity utilities will be $3.25 billion. We should just keep in mind that the average infrastructure spend of the Labor government was just over $3 billion each year that the Labor Party was in government. A freeze on electricity prices would mean that everything that the Labor Party spent on infrastructure on a yearly basis would not be able to occur. Getting to the exact point of the member’s question, it depends upon the price increase. If, for instance, there was a five per cent increase over the next four years—five, five, five and five—that would cost the state budget and the taxpayers of Western Australia about $1.4 billion in direct subsidies to the utilities, which is a conservative estimate of the cost of generating and servicing electricity to households. In those circumstances, it is fair to say that the state government and the taxpayer would still be losing, even on account of dividends reaped from electricity utilities, because electricity utility profits are based upon government subsidies. They are profits on paper because they are profits made from the subsidies that go in from state government.
Getting to the exact point of the member’s question, it depends upon the price increase. If, for instance, there was a five per cent increase over the next four years—five, five, five and five—that would cost the state budget and the taxpayers of Western Australia about $1.4 billion in direct subsidies to the utilities, which is a conservative estimate of the cost of generating and servicing electricity to households. In those circumstances, it is fair to say that the state government and the taxpayer would still be losing, even on account of dividends reaped from electricity utilities, because electricity utility profits are based upon government subsidies. They are profits on paper because they are profits made from the subsidies that go in from state government.
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