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Break The Political Logjam

3 August 1999

Release From Federated Farmers

Federated Farmers Vice President Tom Lambie today called on all politicians to set aside their differences and break the political logjam that continued the growing risk of price gouging by some electricity line companies.

Federated Farmers strongly supports the Government's Commerce (Controlled Goods or Services) Amendment Bill that would give the Commerce Commission the legal power and financial resources to effectively deal with overcharging line companies. The Commerce Commission would be given the ability to thoroughly investigate individual companies and apply price controls if necessary.

"A few line companies have played by the rules and passed on cost savings achieved through electricity reform to their customers, most have not. Legislation that protects consumers from overcharging by these natural monopolies is urgently required, as rural consumers are particularly exposed," said Mr Lambie.

"I call on all Members of Parliament to support this Bill. The beauty is that the Bill will not interfere with the business affairs of line companies that have reasonable and justifiable charges."

Federated Farmers also supports the Bill's proposals that would give the Commerce Commission the resources to identify any obstacles to competition in the retail electricity sector.

"Federated Farmers also agrees that, in parallel to the price control Bill being enacted, there should be an immediate enquiry by the Commerce Commission into impediments to retail competition triggered by a notice by the Minister. We believe this is a solution that will get over the current impasse."

"While a degree of competition currently exists, Federated Farmers considers that competition could be further enhanced, giving customers more choice and lower prices," said Mr Lambie.

ENDS




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