Labor s power policy questioned
Labor's power policy questioned

The first costing battle of the shadow March election campaign has erupted, with Treasurer Troy Buswell claiming Labor's policy to cut power bills by 7 per cent has a $200 million funding hole.

Although the official election campaign has yet to start, Labor fired back with claims that the Government was deliberately misrepresenting its policy.

If elected, Labor plans to replace a levy applied to business and households in the South West that subsidises regional power prices and instead fund the subsidy (worth $630 million over three years) from day-to-day government revenue.

In effect it spreads the cost of funding the subsidy from the bulk of electricity consumers in Perth to all West Australian taxpayers.

The State's economic regulator first proposed the move saying although taxpayers would ultimately pay, it would make the subsidy more transparent and cut the average power bill by about $111 - or about 6 to 7 per cent.

However, Mr Buswell said he had concerns about brochures advertising the policy, and had asked WA Treasury to model the plan, which says it will cost $818 million over three years, or about $200 million more. "The challenge for the Labor party is to explain how on earth they are going to fund $818.6 million of taxpayer subsidies to households and business in WA, which for all intents and purposes is a very modest reduction in annual power bills," Mr Buswell said.

"You can only fill it from one of three sources. You can generate savings, you can increase taxes or you can borrow money."

But Labor's electricity spokesman Bill Johnston hit back, saying that the difference was explained by the fact that Labour party's position was not - as suggested by Mr Buswell - for prices to fall by 7 per cent in 2013-14.

Instead, they will be 7 per cent below any price level the Barnett Government had.

As such, he said Labor stood by the regulator-provided $630 million costing of its policy.

"At some point between now and March 9, the Government has to tell people in WA what the price path is and how much prices will go up by," Mr Johnston said. "Once they have done that we will point out that our prices will be 7 per cent below their price path."

Electricity bills are forecast in the Budget to rise by 5 per cent next year, and 10 per cent in each of the following two years - a level which would ensure that prices finally meet the cost of producing electricity. Mr Buswell would not say whether the Government would keep to that schedule.

Labor's brochures have a headline that "power bills will be 7 per cent lower under Labor", although in the fine print it says they will be 7 per cent lower in relative terms to the Government's price path. This means they could actually rise, although by less than any Government plan.

Mr Johnston would not say how Labor would fund its policy, and said it was "hypocritical" for the Government to be criticising it over funding details, given it hadn't itself explained Budget cuts.

The West Australian

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