PERTH, July 13 AAP
July 13 2011, 1:52PM
West Australian households will be slugged an extra $115 a year on their electricity bills because of the federal government’s carbon tax, Premier Colin Barnett says.
The tax will cost energy supplier Verve about $250 million a year and that will mean average household power bills will go up an extra eight per cent, he says.
But the premier says his government will not retreat from its moves to further raise electricity prices to bring them into line with the cost of production.
The WA government has hiked power prices substantially, citing the previous Labor government’s price freeze and break-up of the state’s electricity system as reasons.
Mr Barnett said on Wednesday that his government recognised that power price increases were hard for people on low incomes, particularly elderly people and young families on single incomes paying high rents or mortgages.
“Certainly the introduction of a carbon tax makes it that much harder.”
“I wish I could simply say that electricity prices will not rise in the future but at the moment electricity customers, both householders and business, do not pay the full production cost of electricity.”
The premier said WA taxpayers were subsidising electricity prices by up to $400 million a year, meaning less money was available for health, education, law and order and other key services.
He rejected the idea of a freeze on prices, saying all the previous government’s freeze had done was “create a billion-dollar headache” for his government.
Mr Barnett said Prime Minister Julia Gillard claimed that householders would be compensated for electricity price rises by increases in the pension or reductions in tax rates.
“I think that will satisfy people in the short term but those increases … over several years get wiped out by the effects of inflation,” he said.