If the Newman Government will have its way, Queensland residents may enjoy power bill savings from July. But they need to give their approval to Campbell Newman’s plan to privatize the state’s ports and electricity assets.
The government’s plan was revealed in a news item in The Sunday Mail. It said that this is a pre-election privatization sweetener that will use $3.4 billion in asset sales proceeds to offer electric bill discount to the average family of approximately $600 over five years or about $4.60 per week.
Government leasing of assets linked to savings
The saving will be possible by using some of the money collected from leasing assets to take care of the Solar Bonus Scheme. This scheme was believed to be the reason for the increase in power bills for non-solar users by around 6% until it expires in 2027.
The Newman government is putting its confidence on the plan that nullifies the argument proffered by Labor and the unions that power privatization would further increase prices of electricity.
The government insists that the plan would pay for the high-priced power supplied by thousands of rooftop solar systems, and would be a breakthrough cost-of-living initiative.
Currently, prices have increased due to the 276,708 homes that are eligible for the 44 cent per kilowatt hour feed-in tariff whose electricity surplus is passed on and paid for by other households.
The Newman government proposes that a special fund from port and power privatization be formed in order to pay for this part of electricity costs until the substantial feed-in tariff scheme expires in 2027.
The government estimates that millions of families as well as small businesses will realize considerable savings starting from $300 over five years for the thriftiest users of electricity to $1,400 for small businesses.
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The government, according to Treasurer Tim Nichols, had already created a plan that will address the burden of electricity prices while responsibly using the money that will come from privatization.
“This is a fiscally responsible policy, not a short-term sugar hit from cash splashes or rebates as it will provide electricity price relief on a structural basis over the longer term,’’ Nichols told The Sunday Mail.
Premier Newman speaks on the situation
Newman said he expects funds from his government’s $37 million asset sales plan would be made available by July 1, 2015. He said this will reduce 6 per cent off retail prices if the people re-elect the LNP in the coming polls early next year.
He insisted that the plan would give power bill relief or electric bill discount. But the opposition and unions have called the pledge a con. They insisted that privatizing the state’s assets will only cause the costs of electricity to go up and reduce jobs.
Newman also called the Solar Bonus Scheme a failure and more costly than the botched health payroll system.
“I think the feed-in tariff was a bigger public policy debacle that has cost people,” says Newman as he promoted his plan. “We have, by the way, sought from the Labor Party the actual Cabinet documents where they made the decisions on this scheme because we wanted to know what advice they got. Clearly, it has worked out very badly for power consumers in Queensland,” he lamented.