Petrol and power hikes - double whammy

Friday 4 Mar 2005 Ken Shirley

Energy statistics released this week prove the Labour Government has been milking power customers through its SOEs, ACT Energy spokesman Ken Shirley said today.

"The latest statistics show household electricity prices have rocketed 19% in the last two years - about four times the rate of inflation, and over 30% since Labour took office.

"Labour is fast becoming the expensive power and petrol party. On top of skyrocketing household electricity prices, we have the five cent petrol tax about to hit motorists back pockets and likely to drive petrol to more than $1.30 a litre.

"In 1999, Labour promised to lower electricity prices for households. Labour's been in power for five years now and can no longer credibly blame previous governments.

"The three government power SOEs - Mighty River Power, Genesis, Meridian - are big cash cows for Labour, with no relief in sight for the consumer."

Mr Shirley released figures that showed in the year ending June 30 2004 the three SOEs collectively made a $497 million surplus, and paid the Government $185 million in tax and $117 million in dividends.

"The Government's creaming of large profits and dividends from its SOEs is an outrage. Labour's `more government, more regulation' approach is a failure and is adding to peoples' power bills rather than reducing them."

Mr Shirley cited a number of factors relating to increased government dominance and regulatory cost in the sector as being the underlying cause.

· Extra levies to pay for reserve generation capacity;

· Increased regulation and associated compliance costs;

· Increased state dominance of the retail and generation sector. (Government-owned power companies who generate and sell electricity account for 65 percent of the electricity market).

"The revelation of electricity price rises is no surprise but it comes as a double whammy in the same week as Labour confirms petrol price hikes for April.

"It appears Labour's approach to energy policy is simply to see how much money it can squeeze out of already struggling households," said Mr Shirley.

ENDS

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