David Elson is not the only one doubting the government's electricity reform agenda. It's appalling record on most policy fronts does nothing to engender any faith.
After hearing the Federal Government’s electricity reform plan on the radio this morning I had a fear, that the prediction of the much maligned Mr Lee Kuan Yew (you know the one) had suddenly become true and that Australia was on a path of inevitable decline.
Why do I have a sinking feeling Australia is becoming a third world state?
I'd prefer the Government (both State and Federal) spent money providing us reliable power during the hot summer months rather than force electricity companies to cut funding to infrastructure; with incentives for consumers to use less.
It almost beggars belief that the Federal Government plans to reduce power bills by reducing household electricity usage through forcing the states to spend millions on monitoring tools while simultaneously severely cutting back and restricting future investment in infrastructure through regulation.
According to this break down from Aurora Energy the high cost of bills are not simply a result of the “gold plating” of infrastructure:
- 33.4% Generation
- 5.8% Carbon price
- 4.8% Renewable Energy Certificates
- 0.4% Market charges
- 13.8% Transmission
- 33.9% Distribution
- 7.9% Retail
Other factors include the solar tariff scheme that many States have in place, which gives money back to those with certain green energy systems that supplies electricity back to the grid.
As you can see from the above it’s certainly possible to reduce the cost of the average household’s energy bill without preventing further investment in “poles and wires”, infrastructure I might add that is essential in delivering reliable power to the grid and your family home.
It’s possible to simply remove renewable energy subsidies and mandates, and the carbon tax to greatly reduce the cost of power bills and its associated impacts on low income families without any effective impact on service provided by power companies.
In some states the amount the Carbon Tax contributes to power bill increases could amount to a quarter of all total increases in power bills.
My biggest fear is that these “reforms” will be passed, but the impact won’t be felt until the future when underinvestment in infrastructure suddenly becomes a problem, i.e.; blackouts (or brownouts) begin occurring frequently during the “one day a year” (according to the Prime Minister and seconded by her loyal ABC 24 Breakfast News) when it’s hot in Australia.
Correct me if I’m wrong, but I had thought we had a few months of summer in Australia, maybe the PM is confusing Australia with her homeland of Wales?
I feel the following pics would help enlighten those unfamiliar with this recent reform proposal:
Perth’s average monthly temperatures:
Australia’s future night life scene:
News Headlines pertaining to other Nations with Green friendly infrastructure policy’s (soon to also include Australia):
Contrary to what a variety of Australia Government both left and right, State and Federal believe, the solution to rising consumption and increasing population is not to cut usage, or provide disincentives or punishments for use of a service (see transportation in Australia) but to increase investment and provision in the service; be it road, public transport or power that people require to survive in a modern 21st century nation.
David Elson is a senior public servant who has long taken an interest in the economic impact of Federal policies particularly those pertaining to environmental or social issues and in the cultures of Australia's Asian neighbours. He lives in Brisbane, Queensland with his Taiwanese wife and is an avid squash player.