Electricity: Reducing the Cost of Living

A submission from the Ross Town Group

Reducing the cost of living – electricity costs

Cost of living particularly in relation to electricity costs are known to be of great concern to both individuals and business. Reducing these costs is not a difficult political exercise. Costs have risen dramatically due to the Andrews’ government imposing a resource tax on the power generation industry.

Any strategy to reduce these costs must consider the following:

  • Coal deposits across Victoria belong to the Victorian people.

  • The resources rent tax is theoretically a charge on business to use an asset of all Victorians. But in reality it is paid by Victorians themselves in the price charged for energy. So we tax ourselves to use our own asset

  • Simply abolishing the resources rent tax will lead to it being reinstated when a Labor/Greens government is returned to power.

  • Any solution must appeal to families and business (i.e. job opportunities, lower operating costs).

  • A solution need only reduce costs to Victorian individuals and business.

The proposed solution is to provide an electricity rebate equivalent to the annual resources rent tax to Victorian residential and business consumers of electricity. It is proposed that the rebate is applied as follows:

  1. The total coal tax for the State should be computed each year.

  2. The coal tax is then to be converted to dollars per Kilowatt-Hour and this becomes the rebate value for the following year.

  3. The computed rebate to Victorians is then applied to each electricity invoice at the computed rate per Kilowatt-Hour.

  4. Electricity sold via the National Marketing Authority to interstate users would not qualify for the rebate so Victoria would collect a coal tax on the use of Victorian coal for that portion of our power generation.

  5. The Essential Services Commission would be required to monitor full pass through of the rebate by electricity retailers.

The nett result is a policy that achieves lower costs of living while being difficult for future governments to tinker with the benefits to consumers.

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