The Great Power Price Rip-Off You’re Paying For
Australians are paying the highest electricity prices in the world – and to give that context, we pay twice what New Yorkers pay for power.
Many people don’t know why this is – they think power is “just getting expensive”.
So here are the real reasons why. Every household and every business in this country is paying for the biggest corporate and government rip-off in our history.
The truth is, you’ve been conned by the people you elected to lead the nation and protect you from exploitation.
Australian Bureau of Statistics figures show the electricity industry’s profits soared by 67% between 2007 and 2011, while during the same period electricity bills rose by 40%.
They’ve continued to go up ever since. This massive increase had nothing to do with the now abolished carbon tax – that was only 9% of your bill. It had nothing to do with the renewable energy target, either – that’s around 5%.
It’s not even the electricity you use – that’s only about 20% of your bill. For almost a decade, the electricity networks, some of which are state-owned, have spent an eye-watering $45 billion on unnecessary infrastructure and is charging every single cent of it back to you.
Worse still, there are doing this with falsely inflated interest rates and other charges amounting to hundreds of millions of dollars. You’re paying for that too. Every single cent of it.
Surely our state and federal governments wouldn’t allow this you say. Well they did. The Australian Energy Regulator (AER) approved it all. They lied to you because it’s in their best interests to do so.
Now, about 50% of your electricity bill is attributed to ‘network charges’. Basically, you’re paying back a $45 billion loan for electricity infrastructure you didn’t ask for and didn’t need. Estimates say around $20 billion would have been more than adequate to upgrade and future-proof our electricity infrastructure.
In 2009 the networks told the AER they needed to upgrade our electricity poles and wires to cope with future demand. But they deliberately over-inflated the level of upgrade required and the electricity demand they predicted has never, ever materialised.
Research showed them demand was falling, and it still is today, due to factors such as energy efficiency and use of solar. But still, the networks and politicians said it was rising. They lied and wasted billions of dollars.
In Newcastle, for instance,they built a brand-new substation, costing $30 million, but it wasn’t connected to the grid. Why? Because it wasn’t needed. You’re paying for outrageous waste like that as well.
The AER enforces rules set by another body, the Australian Energy Market Commission (AEMC), which was established in 2005 and mainly run by state government energy ministers. But as one investigative journalist put it at the time, “a roll call of recent NSW energy ministers reads like an ICAC subpoena list”. Basically, it was like putting the fox in charge of the hen house.
But as the result of this spend, the state governments who own the poles and wires have had the value of their networks go through the roof. That value is handy though if any of those state governments plan to sell off their networks to private investors, just as the NSW government did – for a whopping $3 billion profit. That’s a nice little cash injection to fund their quest to be re-elected.
So why are you, the Australian consumer, paying for this scandalous rort? It’s simple.
This crooked system allows the networks to borrow money and charge it back to customers. The more they spend, the more they make – at your expense.
You’re forced to pay for the interest as well, except they charge you 10% interest when they borrowed at 4 or 5%.
In other words, every year you are paying $100 million to the networks on every billion dollars they borrowed to build a $45 billion network we didn’t need. That’s an extra $4.5 billion that you are paying for through your electricity bills.
Tony Abbott fooled the nation when he told us the carbon tax was responsible for electricity price rises and abolishing it would see costs tumble. They didn’t of course because carbon tax only accounted for 9% of your bill. The con was set in stone.
Tragically, this scandal has a huge human cost with many people now unable to pay their power bills and businesses either paralysed in a competitive market or forced to close their doors altogether.
Even worse, this unacceptable debt burden will go on for decades to come until you have paid it off. What we really need is a royal commission to bring these people to account, tear up the loan contracts and rewrite them under terms that are fair.
That’s what the United Australia Party will be fighting for – an energy deal that puts Australians first.
Support us, ask your friends and family to support us so we can do our best for all Australians. We want to expose and fix what’s really been going on in this country for far too long.
All the best,