Cost of Living And Electricity Prices

Photo of electricity transmission wires
21 February 2017

Consideration

Mr ALISTER HENSKENS ( Ku-ring-gai ) ( 15:29 :29 ): My motion should be accorded priority because the people of New South Wales are interested to hear this Parliament debate what is being done to ease cost of living pressures in general and electricity prices in particular. I say the people of New South Wales are interested, but there is one group that is not interested in a debate about cost of living pressures and how to deal with them—those members who sit opposite. They know that a debate about cost of living pressures and electricity will expose their own mismanagement and failed scare campaigns on these issues. But, more profoundly, it will show a clear political alternative: a Government that has a record of easing cost of living pressures and an Opposition that does not.

This motion will make good what the Treasurer has repeatedly informed the House: that this Government is the workers' best friend. In the last five years of the Labor Government electricity prices rose by more than 60 per cent and water and wastewater prices rose by more than 50 per cent. But since 2011, utility prices—gas, water and electricity—have increased more slowly in Sydney than in any other mainland city, and at half the pace in the last five years of the Labor Government. While the average water bill in other capital cities has increased by from 10 to 40 per cent over the past five years, residents of Sydney, the Blue Mountains and Wollongong have paid 4 per cent less than five years ago.

Over the last five years of the Labor Government, electricity prices increased annually by 10.4 per cent. Since 2011 increases have slowed to 6.5 per cent annually—an almost 50 per cent reduction. Because this Government has ended the gold plating of the poles and wires, the transmission price component of electricity bills has decreased by 7 per cent, with a further 2.5 per cent reduction recommended for the next regulator's determination. Over the 16 years of the Labor Government, public transport fares increased by almost 60 per cent—almost twice the consumer price index increase. Since 2011, Sydney's public transport fare increases have been the second slowest of any mainland city capital. Over the past five years, public transport fare increases were half the rate of those in Labor's last five years in government.

Only the Coalition Government can be trusted to manage the economy and to manage electricity, water and transport costs so that they add the least possible to people's cost of living expenses. This is a clear point of difference: Labor thinks it has the right to put its hand in people's wallets; the Coalition Government does not.

Priority

Mr ALISTER HENSKENS ( Ku-ring-gai ) ( 15:43 :04 ): I move:

That this House:

(1)  Notes electricity prices rose by more than 60 per cent over the last five years of the previous Government.

(2)  Acknowledges that under the current Government there has been a 7 per cent real reduction in electricity transmission prices.

(3)  Acknowledges that this side of the House is easing the cost of living pressure on New South Wales families.

There are three components to the electricity bill that families receive: firstly, the retail component, which encompasses the cost of billing and other customer interaction; secondly, the transmission and distribution cost, which is the rent charged for transporting electricity from power generators to people's homes; and, thirdly, the cost of generating electricity. The retail component of electricity prices has remained steady and is not responsible for changes in people's electricity bills. The transmission and distribution costs were the subject of a scare campaign at the last State election because the Government took to the electorate a policy of leasing the poles and wires. The transmission and distribution prices component of electricity bills has decreased. Under the last regulator's determination network prices decreased by 7 per cent in real terms. We saw that today TransGrid's most recent application for the next billing period is to reduce—yes, reduce—the average transmission tariff by 2.5 per cent. That is in stark contrast to what happened when Labor oversaw and owned the network: we saw network prices increase by 22 per cent.

The network reforms this Government has been implementing are directly aimed at putting downward pressure on network costs. These costs make up around 50 per cent of customers' bills. Reforms implemented by this Government have ensured that the networks are maintained at a high standard without increasing network prices. They are also encouraging private sector innovation to adapt new technologies, such as batteries, for our electricity network to reduce costs. By contrast, in 2009 Labor's gold-plated capital expenditure budget for Ausgrid alone was $9 billion over five years. Under this Government that same five-year budget was just $3.3 billion. That is a reduction of 63 per cent.

The main volatility in electricity prices has been caused by generation costs; that is, the wholesale market. Since the late 1990s there has been a national electricity generation market, excluding Western Australia and the Northern Territory. Recently, the wholesale electricity market has undergone significant change, with wholesale costs increasing from historically low levels to prices more representative of the longer term and the retirement and/or maintenance of existing electricity generators. Unfortunately, Labor States like South Australia have allowed generators to be destroyed and have relied upon less reliable generation. This Government does not leave customers to the mercy of energy retailers; it maintains strict oversight of the electricity market.

According to the Australian Energy Market Commission, New South Wales has some of the lowest annual electricity bills on average for those on market contracts in comparison to other jurisdictions. On average, typical residential customers can save between $250 and $445 a year by switching to the best market offer. This Government is also doing more to support New South Wales electricity customers. It has boosted energy bill assistance for New South Wales households to more than $1 billion over the next four years. Around 900,000 low‑income households will receive a total of $250 million in assistance this financial year and the next. This is a budget increase of almost 50 per cent from the 2010-11 year.

This Government introduced the $90 gas rebate from  1 July 2015, and in 2016 it was extended to include LPG customers. We support the need for lower prices and we will continue to deliver them. I will repeat the Government's achievements in reducing cost of living expenses in other areas. The evidence is that in the last five years of the Labor Government electricity prices rose by more than 60 per cent and water and wastewater prices rose by more than 50 per cent. Since 2011 utility prices have increased more slowly in Sydney than in any other mainland city, and have increased by 50 per cent less than they did during the last five years of the Labor Government. This Coalition Government is getting runs on the board to reduce cost of living expenses.

 

Mr ALISTER HENSKENS ( Ku-ring-gai ) ( 16:27 :17 ): In reply: Last week in the debate on the Steel Industry Protection Bill 2016 the member for Keira said:

Anyone who sits in the oldest Parliament in this country and fails to take the lessons of Brexit or Trump is missing some fundamental points. I do not believe for one second that all of the people who voted for Trump are racist bigots.

It would seem that the member's admiration for Donald Trump extends to the concept of alternative facts. When I gave a number of examples of improvements in the cost of living and utilities, including electricity, water and gas and public transport, compared with when Labor was in power, all he could do was point to toll costs. The member for Heffron similarly sought to parry rather than address the facts of the matter. The record of the Labor Party on tolls is not a good one. Labor set the tolls on the Eastern Distributor with the longest concession length from the day of opening in New South Wales. It set a concession length of 49 years.

The DEPUTY SPEAKER: Order! I remind members that some of them are on three calls to order.

Mr ALISTER HENSKENS: The Labor Government set tolls by leaving it up to the investment banks to pitch what the tolls should be for each road.

Mr Ron Hoenig: Tell us what Sir Henry Parkes did too, will you ?

Mr ALISTER HENSKENS: I do not think they built toll roads when Henry Parkes was in this House. The member for Heffron presented no facts to counter those which I put. Instead, he raised the sale of base load power stations and recent generation constraints, but that is an extraordinary contention. The 15-year-old Labor Government in South Australia recently blew up a base load power station and is drawing much more from the national grid than it is producing. The Victorian Labor Government is allowing the closure of the Hazelwood Power Station, which supplies 20 per cent of the Victorian electricity capacity. The facts overwhelmingly support the assertion that this Government has been easing cost of living pressures in New South Wales. Labor's history in government in this State and elsewhere in Australia is not good.

The reference by the member for Heffron to the Australian Energy Regulator's determination, and litigation now before the Federal Court brought by the AER was to address the fact that 2,750 jobs will be lost over the three New South Wales distribution businesses. It is a sign of how far Labor has come from its origins that it would criticise in this Parliament actions to save 2,750 jobs.