LEON BYNER: Now, AGL is to apply [AGL South Australia Pty Ltd has applied] to the regulator for an increase in power prices of $150 annually. They blame the carbon tax. It’s worth remembering that Greg Combet promised a 9 per cent increase on electricity prices, with compensation based on that Treasury modelling, not on the real price, and it will only be for the first year where you will be compensated. Prices and the tax are set to rise every year and, remember, Professor Barry Brook stated that the carbon tax will make no difference to any atmospherics; it’s purely a wealth redistribution disguised as an environmental solution. At $23 a tonne, Australia by far has the most expensive carbon tax on earth of any OECD [Organisation for Economic Co-operation and Development] country, even China – a dollar a tonne in 2015, as opposed to our 23. Now, if the happy Greens had their way, it’d be worse. Qantas has increased its fares twofold for both the carbon tax and fuel levy but its Middle Eastern competitors have an advantage of no carbon tax. In fact, they’re trying to buy Virgin. It’s a churn of revenue to advantage federal coffers.
LEON BYNER: Danny Price from Frontier Economics, can you explain, is AGL justified in going to the regulator and saying ‘carbon tax, July 1, we need 150 bucks’?
DANNY PRICE: Oh, AGL’s completely justified. It’s a cost that they will have to bear; they can’t avoid it. It will be passed on to them and the whole idea of the Government’s policy is for AGL to then pass it on to consumers so it starts to modify people’s behaviour. By policy design, this is the impact…
LEON BYNER: Senator Simon Birmingham from the Opposition… what do you say to this, mate?
SIMON BIRMINGHAM: Well, good morning, Leon. Danny has highlighted many, many of the problems. We’ve said from day one under this carbon tax that consumers will end up paying, households will end up paying and many millions will be worse off. What we have is a carbon tax that takes effect on the 1st of July this year, that around the world is the biggest by scope or industry coverage, the biggest by rate or how much people are going to pay and will keep going up so this $150 price we see this year, in terms of the hit that AGL is proposing, is not the last of these price rises so it will keep going up – that’s what’s designed under the modelling that Julia Gillard and this Government have done around this carbon tax.
LEON BYNER: So what’s the average price increase? Because I know Origin will also be applying for this. Most of the power companies will.
SIMON BIRMINGHAM: Well, indeed they will, Leon, and obviously we’ll see as they all put their applications through to the Essential Services Commission. The Government modelling says it’s 10 per cent. The industry said to us – the electricity generating industry, as this went through the Parliament – that it’s quite possibly more like 20 per cent and, indeed, Nick Xenophon and I worked on an amendment towards the end of the debate to try to at least limit the electricity rises that could occur. Unfortunately, that was defeated and that was about…
SIMON BIRMINGHAM: … the timing and nature of advance purchase of electricity permits.
LEON BYNER: Why was it defeated?
SIMON BIRMINGHAM: Because the Government had the blinkers on. They believed they had the perfect scheme, they’d done a deal with the Greens and they were unwilling to listen to even rational debate so when, despite the fact that obviously the Liberal Party and Tony Abbott have made our opposition to this carbon tax quite clear from day one, we still sought to find a way to try to minimise the price rise on electricity and even that was knocked back and that’s unfortunate because what we’re seeing now is that all of the modelling on which this was built, frankly, was built on very shaky foundations…
LEON BYNER: Well, it was built with an assumption that everybody else was doing the same thing.
SIMON BIRMINGHAM: It was built on an assumption that everybody else was doing the same thing, it was built on an assumption that the European scheme would keep working when, of course, we now see that the European scheme is trading at around $9 per tonne. We’re going to be paying $23 per tonne in Australia on 1 July so it is like chalk and cheese to compare them. Their rebates and their assistance packages are far more generous than what’s going to be in place in Australia, so Australian industry will be paying far more than the rest of the world but, as Danny pointed out, small businesses in particular… there is no compensation for them; there’s no assistance; they will simply cop the full weight of these electricity price rises, gas price rises, water price rises… understand, it flows right through everything – transport sector and so on as well… and those small businesses will simply have to either pass it on to consumers, take a cut to the bottom line or shed staff or go out of business and that’s…
LEON BYNER: Alright.
SIMON BIRMINGHAM: … [unclear] pressure on jobs and unemployment at present.
LEON BYNER: Simon Birmingham, the Shadow Parliamentary Secretary of [for] the Environment.