House debates

Thursday, 30 March 2017

Business

Leave of Absence

2:02 pm

Photo of Craig KellyCraig Kelly (Hughes, Liberal Party) Share this | Hansard source

We often hear that there is an energy transition that has been going on across Australia over the last couple of years. And that is true. But that transition has been won from a low-cost environment, where Australians have enjoyed some of the lowest-cost electricity in the world that has given our nation an enormous competitive advantage. We have transitioned that to having one of the highest electricity costs in the world, putting our nation at a significant competitive disadvantage.

In a war, the first thing you do when you attack your enemy is take out their base load electricity-generating power stations. That is what has happened throughout history, from World War II to the recent Gulf War. Yet this is exactly what we have been doing to ourselves—our own nation—by taking out one coal-fired power station after the other, with the most recent one to close down, of course, being Hazelwood.

We have seen the effect of that in today's papers. With the closure of Hazelwood Power Station in Victoria, analysts are forecasting a 10 per cent to 20 per cent increase in household bills. That is a 10 per cent to 20 per cent increase in everyone's electricity bill on top of what we were paying already. And the Greens were actually cheering about this. It is not only the cost; it is further unreliability. We have heard that next summer, with the closure of Hazelwood, there will be a 75 per cent chance of blackouts in New South Wales, South Australia and Victoria.

Of course, the overall cost to our nation is staggering. Our nation's total electricity bill at the moment is around $50 billion. If we were able to match the electricity prices that they have in the United States, and where we were just a few years ago, that would be a $25 billion saving to this nation annually. That is $100 billion over four years extra that this nation is paying in electricity.

That hurts the poorest and less well off in this nation. We know we have record numbers of Australians who have had their electricity disconnected. Thousands of Australians are now living in homes without any electricity because they could not afford their bills. We know that this coming winter there will be tens of thousands, if not hundreds of thousands, of Australians who will be sitting in cold homes, unable to afford to turn their heaters on. And the effects on their health will be significant.

But the real cost is the loss of our international competitiveness. If we are going to create wealth in this country, it is quite simple: we need human ingenuity and low-cost electricity. You combine those two things together and that is what creates the wealth of this nation. That is what creates the wealth to pay for our pensions, aged care, care for kids with disabilities, schools and childcare facilities—everything we hear that members from both sides of the parliament would like to spend more on. But we have to create that wealth, and we cannot create that wealth in this nation if we are going to have some of the highest electricity prices in the world. So I call on members of the Labor Party: please put aside your ideological zealotry on this issue. Think about the welfare of your fellow Australians first. Think about the importance of having a competitive nation. I call on you to abandon the 50 per cent renewable energy target that you are pursuing. If you have any questions about what happens under a 50 per cent renewable energy target, just look at the unmitigated disaster in South Australia—some of the highest electricity prices in the nation, jobs being lost, chaos and unmitigated hardship and suffering in that state because of their ideological pursuit.

So we have a choice in this nation. If we want that 50 per cent renewable energy target, we know where it heads us—down the road of South Australia. Graham Richardson has said to pursue it is an open display of arrogance and stupidity. I call on the Labor members: please abandon your 50 per cent renewable energy target. (Time expired)

Comments

Tibor Majlath
Posted on 2 Apr 2017 5:40 pm (Report this comment)

Is that total electricity bill of $50 billion residential plus business/industry? Is it a measure of the cost of the total KWH used? Does it include all network charges?

The member's claim is not a proper measure of power prices since it depends greatly on usage. There is no valid basis for arguing that "If we were able to match the electricity prices that they have in the United States, and where we were just a few years ago, that would be a $25 billion saving to this nation annually. That is $100 billion over four years extra that this nation is paying in electricity."

You would need to account for equivalent purchasing power exchange rates for a reasonable measure. And you would need to examine and compare the US and Australian cost of 1 KWH and and network charges. Do the Americans pay our excessive network charges and the Coaliton's GST which are a large part of any Australian electricity bill?

A little research will show that "Australia's power prices, (at equivalent purchasing power exchange rates) were lower than the OECD average of 23.03 US cents per kilowatt-hour (c/kWh). At 20.47 US c/kWh Australian 2014 electricity prices are also low by overall international standards."

The KWH price rises are certainly lower under the Coalition than under Labor, but the ubiquitous network charges have risen 22% under Coalition stewardship.

The member says we have a choice between Labor and the Coalition, but can't help himself in muddying the waters with misleading and worthless comparisons.

Tibor Majlath
Posted on 2 Apr 2017 5:56 pm (Report this comment)

Let's assume everyone paid GST on the $50 billion.

Now, the LNP's tax on the total bill, that is, the GST = $50 billion/11 = $4.6 billion

That is a massive $4.6 billion. Apparently, that does not hold back business because it doesn't effectively pay GST. So it is never an issue amongst Coalition ranks. Just for some households.

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