05/11/2002 - 21:00

Business turns on Barnett over power

05/11/2002 - 21:00


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BUSINESS leaders have turned on Opposition Leader Colin Barnett for his steadfast opposition of any proposals to break up Western Power.

Business turns on Barnett over power

BUSINESS leaders have turned on Opposition Leader Colin Barnett for his steadfast opposition of any proposals to break up Western Power.

The Liberal leader came in for tough criticism from several quarters at a WA Business News energy reform luncheon held last week. He was unable to attend the lunch due to prior commitments.

While the rift between the Chamber of Commerce and Industry and Mr Barnett on the issue of electricity reform is well recognised, CCI chief executive Lyndon Rowe’s criticism of the Liberal leader’s stance was supported by several other business leaders at the lunch.

It has to be noted that Mr Barnett has changed his position somewhat on Western Power. He conceded that the ring fencing arrangements he put in place as Energy Minister in the Court Government to separate generation and retail from network control had not worked.

He now supports the idea of splitting networks away from Western Power while leaving the utility as a combined generator and retailer.

However, it is understood that Mr Barnett’s view of electricity reform is not shared by members of the Liberal Party.

Mr Rowe said Mr Barnett had been pro-competition when he worked for the chamber before he had entered politics.

“Colin, in my view, has been captured by the power of Western Power and also [has] come to believe that it was government’s best economic weapon,” he said.

“I believe he took the view that electricity was a State resource and government could manage it better.”

Electricity Reform Task Force member Frank Harman said WA’s disadvantage was the same as it was 10 years ago.

The ERTF’s recommendations still need to be made into law to take effect and that means getting them through Parliament.

“The Opposition still hasn’t indicated support for this,” Dr Harman said.

Mr Barnett said Labor had slowed the pace of electricity deregulation. He said it was unlikely the Liberals would support the break up of Western Power.

“If we had been in power one of Western Power’s generators would have been privatised by now and there would be a large amount of private power available for consumers,” he said.

“During the eight years of Coalition Government, power prices to residential customers fell 15 per cent and business enjoyed price drops of between 20 per cent and 30 per cent. Up to 50 per cent of the market is open to contestability.

“Labor is proposing just 8.5 per cent price falls over 20 years.

“Business has to be careful here because what the Government is proposing could leave us open to price hikes.

“Nobody will be responsible for managing the power system once Western Power is gone.

“If you break Western Power up, what are you left with – a shell with a big debt burden.”

Mr Barnett said Labor’s approach left WA open to the price hikes threatened in South Australia and the ‘brown outs’ and blackouts plaguing the eastern States.

However, Perth Energy director Ky Cao said WA had sufficient surplus power to avoid brown outs.

Dr Harman said the South Australian price situation was scandalous.

The South Australian Government opted to lease its generation assets to private operators as part of its move towards electricity market deregulation.

“The South Australian Government held up the deregulation process to get the best lease price,” Dr Harman said.


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