House debates

Thursday, 11 October 2012

Questions without Notice

Electricity Pricing

2:22 pm

Photo of Robert OakeshottRobert Oakeshott (Lyne, Independent) Share this | | Hansard source

Before the clock starts: today is CanTeen day. Like the member for Herbert and many others, I am sure we all support kids with cancer.

My question is to the Prime Minister. Prime Minister, regulators, electricity market participants, economists and market experts all have been indicating failures for some time in electricity price regulation. In the light of this, will your government support moves to unify national electricity laws through an act of this parliament and to address the failed appeals process that has led already to a pointless $1.9 billion in just three years transferred from households and businesses in New South Wales directly to the New South Wales government?

Photo of Don RandallDon Randall (Canning, Liberal Party, Shadow Parliamentary Secretary for Local Government) Share this | | Hansard source

Thank you, Dorothy!

2:23 pm

Photo of Julia GillardJulia Gillard (Lalor, Australian Labor Party, Prime Minister) Share this | | Hansard source

I thank the member for his question and note that his question is trying to get to some of the real causes of price rises in electricity. I am not surprised that it was objected to by the opposition, because they do not want people to have the facts about this matter. The member is pointing to issues which are impacting on electricity prices and have been the drivers of the big increases families have seen—40 per cent, 50 per cent, 60 per cent—and he has particularly pointed to the drivers of costs in New South Wales.

He is right to point to a set of market failures here—a market failure which means that there is a perverse incentive to continue to see more and more and more investment in the poles and wires of the system, the so-called gold plating. This is a market design problem. He is also right to point to the fact that there are issues associated with state governments, including the New South Wales State government—indeed, one could probably say particularly the New South Wales State government—seeking to get major dividend streams from electricity, given that they are the owners of the assets, and that those dividend streams end up being paid for by households and businesses across New South Wales. These are very concerning issues.

From the other side of politics we have seen these issues denied. The Leader of the Opposition used to deny that network prices had been rising, ignoring households in his own electorate and across New South Wales who are now paying over $1,300 a year in network costs, when in 2007-08 they only paid $500 a year.

It is the government's intention to work on these issues through COAG processes, including the processes engaged in by energy ministers, to deal with these market design issues and consequently to have an impact on price determinations in the future. The government is committed to that program of work. I understand that the member is going to bring before the parliament a private member's bill on this issue. We have not as yet seen the contents of that bill, and of course we are respecters of the role of private members' business, but the government's commitments relate to its work program. We will be keen to discuss this with members of goodwill across the parliament—that is, people who are prepared to deal with the public policy issues, to understand the facts, to put aside the reckless and silly fear campaigning and to act on behalf of their constituents in a responsible way.