• Dean Nalder

Competition will power WA

This article was first published by The West Australian, p. 46, 02/11/2020

Western Australian electricity prices are skyrocketing while everywhere else in the nation prices are going down. We pay the second highest electricity charges in Australia and have had the largest increase of any state over the past 3 ½ years.

It is why the WA Liberals believe it’s time for long overdue reform in our energy sector. And it’s why we have launched a signature election policy – a Plan for Cheaper Power Bills.

Our plan is to introduce competition into the electricity market giving more than one million households and 75,000 small businesses, including charitable organisations, a choice of electricity supplier – just like we did with gas with households now receiving discounts between 35 and 45 per cent.

WA is the only state in Australia that doesn’t offer choice to households and small business for electricity supply and despite a power freeze this year, West Australians will pay 35 per cent more than Tasmanians.

Both households and businesses in Western Australia are struggling to pay their bills on time, or at all.

The Economic Regulation Authority’s most recent report on energy retailers for 2018/19 showed the number of both residential and small business customers on bill payment instalment plans was at its highest point in six years.

It also showed Western Australian residential disconnection rates were substantially higher than in comparable jurisdictions of New South Wales, South Australia and Victoria.

When the McGowan Labor Government increased the residential fixed charge for electricity by 10.9 per cent in July 2017, electricity users were not able to mitigate the increase in their bills by limiting electricity usage and it disproportionately affected lower income households who spent a higher percentage of their disposable income on energy bills.

By June 2019, residential electricity customers being disconnected had more than doubled under the McGowan government and reached a record of almost 22,000 disconnections that financial year.

And in the year to June 2019, the average electricity bill debt for small businesses repaying a debt had increased by a massive 38 per cent, with the average bill debt being more than $4,700.

Larger electricity consumers using more than 50MWh per year are already able to choose their electricity supplier. A Liberal government will immediately lower the threshold for competition from 50MWh to 20MWh benefiting small businesses, with full implementation expected to take two years to allow changes to legislation and provide the energy industry with time to prepare.

The path to opening up our electricity market to competition has received support from both the Labor and Liberal Parties. In 2005, legislation enabling the full disaggregation of the old Western Power was introduced and passed by the then Labor government, with Mark McGowan being a cabinet Minister at the time.

The previous Liberal government had begun opening up to full competition, expected to be operational by mid-2019, but Labor have failed to accomplish this in almost four years in the job.

Analysis by the Australian Energy Market Commission predicts WA household power bills hitting $1702 per year by 2021/22 so it’s imperative we look at ways to reform the energy sector in the long-term in an effort to put money back into people’s pockets.

This will allow individuals and families more breathing space to manage their household budgets, to pay off their mortgage sooner and help feed money back into the Western Australian economy which creates business growth and employment opportunities.

Small businesses will benefit from additional cash flow which they can then re-invest into innovation, training and jobs and continue to spend in WA’s economy.

As part of this reform we will implement an Electricity Safety Net to guarantee state-owned energy company Synergy will continue to provide electricity to West Australians at the same prices as in the budget and set by the government of the day.

And new retailers will not be allowed to charge over and above Synergy’s price for standard electricity meaning any West Australian that doesn’t want to shop around for a cheaper deal won’t be financially worse off.

To achieve these protections, a Liberal government will commit to retaining Synergy, Western Power and Horizon Power in state hands through our No Asset Sale Guarantee.

Competition will encourage innovation and accountability and lead to lower prices. For far too long WA households and small businesses have been paying too much for electricity.

West Australian families and small businesses deserve and need choice for electricity.

Dean Nalder is the Shadow Treasurer and Shadow Minister for Energy

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