LEON BYNER: Since our electricity was privatised about ten years ago, prices went up so we could have competition that would put them down again. Building in renewable energy targets for so called ‘green energy’ was expensive compared to coal. It forced the price up. The subsidising of solar panels hasn’t really been the main driver of your power bill; it’s been a component. Infrastructure costs of a decrepit network were also passed on to consumers and the federal regulator recently observed that power companies are ‘gouging’ customers. Governments naïvely embrace the notion of competition delivering cheaper power but in reality that really hasn’t been achieved. The distribution network is a monopoly, like Telstra’s infrastructure, and the power companies are behaving a lot like piranhas, with questionable door-to-door practices offering benefits that you just know half the time are not true. People who invested in solar more than likely made a very wise choice because they can now get their bills down. Electricity doesn’t cost more to generate; it’s driven by increasing gas prices, coal being demonised, a mandatory clean energy target [Renewable Energy Target] of 20 per cent and infrastructure companies getting away with passing on their costs separately which were once included in the energy generation price itself. I would argue that the free market hasn’t really delivered all that much to the customer. Regulators have allowed many costs through to the keeper and this leaves the consumer you and me having to find ways to reduce power consumption…
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LEON BYNER: Now, Simon Birmingham, your argument I presume is going to be that when the carbon tax is introduced our bills are going to go up further. Is there any accurate modelling that you can give us that will tell us by how much?
SIMON BIRMINGHAM: Well, good morning, Leon and listeners. I’m not sure that I can claim this is accurate modelling. I can tell you the Government’s own Treasury modelling, which I have serious concerns about… but it indicates that electricity prices in the first instance will rise by at least ten per cent. That’s just ten per cent a direct result of the carbon tax, so if we look at this story and this data from ESCOSA [Essential Services Commission of South Australia] today, average household electricity bills in South Australia are currently nearly $1700. That, of course, means that there’ll be another $170 on top of that because of the carbon tax and that’s if Labor’s got their modelling right and, of course, this Treasury modelling has assumed that the rest of the world acts and yet we’re not seeing the rest of the world applying a carbon price, so it’s…
LEON BYNER: Alright. Now, remember we have to be fair, though, and say that a lot of the people listening today will be compensated for that extra price, won’t they?
SIMON BIRMINGHAM: People will receive some form of compensation or, some people. Some people won’t receive any. Small businesses, of course, won’t receive any at all, so of course small businesses many of whom, in dry cleaning and restaurants and otherwise, are very energy intensive in their operations they don’t get any compensation back. Householders will get some but over time the carbon price will keep rising. There is no guarantee that the compensation will keep rising, though, so…
LEON BYNER: Okay, well…
SIMON BIRMINGHAM: … people will find that their prices keep going up but they’ll end up… more and more people will end up out of pocket over time.
LEON BYNER: Notwithstanding the carbon tax, if the Coalition get government at the next election, which is still a distance away, are you seriously going to tell the people of South Australia that you’ll be able to do something to keep power prices down?
SIMON BIRMINGHAM: Well, Leon, obviously our first commitment there is that we will repeal the carbon tax and that we would expect that that will remove that pressure on electricity prices. You’re right, the other issues are extremely complex when it comes to matters of ageing infrastructure and all of those other factors are things that really do need a far more comprehensive analysis. Sadly, this Government promised an Energy White Paper, to give some sort of strategy for the future of energy in this country, way back when they were elected. We’re still waiting to see that Energy White Paper and that’s what the country really needs is how we’re going to modernise our energy assets and infrastructure and make sure that we do so in a way that doesn’t see these price rises further surge because there are all too many households who find that paying these large bills is too much of a pressure at present and we just can’t afford to be putting extra pressure, whether it be a carbon tax or other costs, on top of that.
LEON BYNER: Alright. Simon, thank you.
[ends]