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CRAIG COMMENTS |
A
spoon full of sugar
1 May 2002
Rebates on electricity bills announced recently by the Minister for Energy and
Resources, Candy Broad, are the equivalent of the proverbial “spoonful of sugar”,
the Member for Gippsland East, Craig Ingram said today.
They apply for this year only and are nothing more than a sweetener to camouflage
the real effects of National Competition Policy. Country consumers will need to
brace themselves for ever larger bills in the coming years. The very nature of
competition is that the laws of supply and demand are given free rein. The power
for governments to intervene with palliative measures of this kind is only in
the short term.
The Treasurer, Mr Brumby recently replied to questions that I put to him in writing
in January following the circulation of a brochure on competition in the electricity
industry. In his reply, he states, “It is the government’s intention that, subject
to the regulatory framework, companies should be able to recover the costs of
supplying electricity to non-metropolitan areas.” He did not clarify whether it
is the government’s intention that this is to apply to every individual or whether
some country people will still be subsidising other country people. If cross subsidisation
is wrong between city and country, it is equally wrong between country people.
There would be very few Bairnsdale people who would object in sharing the cost
of transmitting and distributing electric power to Mallacoota and Omeo but it
is hard to see the logic of excluding the residents of Melbourne from the same
responsibility.
New suppliers have entered the market encouraging consumers to shop around for
cheaper tariffs than those currently on offer – but only to big consumers. Any
business can get into trouble if its biggest and most profitable customers are
lured away.
It was the policy of past governments to ensure that virtually every home in the
State was supplied with electricity. Many small communities had to work hard to
raise the loans necessary to finance construction of power lines over long distances
and through difficult country.
The government is giving considerable publicity to the short-term palliative measures
to ease the pain of rising electricity charges. The bitter pill that country people
will have to swallow is that, eventually, after an ‘equalisation adjustment’ is
phased out, they will have to pay the full cost of transmission and distribution.
The government is tempting us with short-term inducements, to ignore the long-term
implications for this region.
These increases will make it increasingly difficult for country based industries
to survive. While State and Commonwealth governments give handouts to selected
country industries, they are steadily choking off essential services vital to
country people.
