THE Coalition energy spokesman, Ian MacFarlane, has contradicted his leader Tony Abbott’s claim that carbon tax is the only cause of power price rises, saying the Coalition would ”forcefully encourage” the states to privatise their electricity networks and would listen to calls to rein in overinvestment.
Yesterday Mr Abbott said the Prime Minister, Julia Gillard, had ”fabricated” the entire idea that overinvestment in electricity ”wires and poles” had caused price rises beyond the carbon tax, and refused to commit the Coalition to regulatory reform.
”The problem is not the regulation of power prices. The problem is the carbon tax putting up power prices,” he said.
”This is a fabrication by the Prime Minister. This is an absolute furphy from the Prime Minister. Why would we believe the Prime Minister now about so-called gold-plating of power infrastructure when she’s never talked about it for the last five years?
”The Prime Minister herself in Parliament last year said that there was a need for more investment in power infrastructure. So, if there’s such a terrible problem of overinvestment in infrastructure, why did the Prime Minister say the opposite last year?”
But Mr MacFarlane told the Herald the issue of over-investment in wires and poles was ”absolutely a question for a Coalition government and we wouldn’t take five years to do something about it”.
He said he would ”forcefully encourage state governments to open their electricity distribution networks to competition, whether that is by privatisation or allowing private competitors into the market” to ensure price rises slowed down.
”We couldn’t force them but we could use all the levers available through COAG [Council of Australian Governments] to push them in that direction.”
He said he would ”listen to and take advice from the Australian Energy Regulator” about regulatory rules. The regulator
has been proposing regulatory changes for more than a year and has repeatedly argued that the present regime means power bills are higher than they should be.
Mr MacFarlane agreed and said by his calculation the NSW government was earning $190 a year from every household through its electricity assets.
”The biggest immediate pressure is the carbon tax but I accept electricity prices have risen because of unnecessarily high distribution costs … the government knew these astronomical price rises were coming through the system because of transmission investment and they’ve been asleep at the wheel. We wouldn’t be,” he said.
The federal MP Malcolm Turnbull said it was legitimate to ask ”whether the level of investment has been excessive, whether there has been gold-plating”.
In a speech today, the chairman of the Australian Competition and Consumer Commission, Rod Sims, will push the need for privatisation of networks.
”We still have key networks in government hands in Tasmania, Queensland, NSW and Western Australia … The incentives of government shareholders are unavoidably mixed and complicated … It is difficult to know what the objectives would have been had the businesses been in private hands but perhaps … [it] would have assisted in preventing some of the recent significant price increases,” he will say.
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