Robert Oakeshott (Lyne, Independent) Share this | Hansard source

Mr Speaker, before I begin I congratulate you for your role in the chair today. It was an important statement that you made.

On 29 March this year, Professor Ross Garnaut identified some issues in his Transforming the electricity sector through the process of pricing carbon. He said:

The recent electricity price increases have mainly been driven by increases in the costs of transmission and distribution.

Attached to that work was a startling graph that every Australian concerned about electricity price rises should see. It identifies that 68 per cent of that electricity bill is from increased investment in electricity networks—the poles and wires—to replace ageing assets and meet rising demand and, as has also been identified, to promote a failing market and the super profits of state based monopolies.

State based monopolies with fixed rates of return on pole and wire infrastructure are continuing to lead to record prices on local electricity bills. Electricity bills on the mid North Coast of New South Wales are increasing again this year, by 18.1 per cent, even with a change of government in New South Wales. The increase was approved by the Liberal and National parties. This brings the cumulative price rises since 2007 to a staggering 76 per cent in this one utility alone. This is on the back of the new New South Wales government's approval of IPART recommendations for what I consider to be a ridiculous price rise. This latest rise again highlights the failures in the existing regulatory system, as identified by Professor Garnaut, and is delivering to New South Wales consumers the steepest electricity price rise in New South Wales history.

Those who attended public forums at Port Macquarie and Taree were given an insight by Professor Garnaut into these market failures in state controlled monopolies. The truth is that failing regulation of the network and transmission infrastructure, the so-called poles and wires, has been the standout offender, particularly in New South Wales. The electricity network infrastructure spend was about $9 billion a year nationally, or $25 million a day, which is 2½ times the spend on the so-called infrastructure project of our time, the National Broadband Network.

A monopoly with a fixed rate of return has no risk and will lead to unnecessary spending at taxpayers' expense, and what we are now seeing is exactly this: a record investment boom in poles and wires that is more focused on making money for state governments than on distributing electricity. Both major parties are complicit in this rip-off of taxpayers, and both need to start to explain their contributions to these cost-of-living pressures. This inappropriate network infrastructure spending of recent years has placed mid North Coast households and small businesses under tremendous pressure. The time has come to do things differently, and a change to the regulatory environment of the electricity sector—such as a better appeals process on rate of return decisions—is essential. Successive state governments have endorsed recent IPART decisions heavily impacting on households and small businesses, and I would urge the state government of New South Wales, the ACCC and the Australian Energy Regulator to win this fight.

See this speech in context