Media Release

Peter Gutwein MP
Shadow Minister for Energy

Thursday 30th April 2010

Aurora in Danger and Higher Electricity Prices on the Way

New Energy Minister Brian Green must explain how he will implement Labor's 5% price cap without either spending millions of dollars of taxpayer money to prop up Aurora, or sacking hundreds of Aurora workers.

While the Liberals stand for a lower cost of living, if Bryan Green gets this wrong Tasmanians could end up paying more for electricity, not less, in the long term.

The cost of the cap for one year was calculated by Treasury to be more than $23 million, with Treasury explaining that "The cost of the policy arises from the revenue reduction faced by the Governments electricity businesses".

In 2009, Aurora made a profit of just $9.1 million. Bryan Green must explain how Aurora can possibly lose $23 million a year in revenue without having to make massive job cuts or use money that should be spent on health and education to prop up Aurora.

It may be that Bryan Green's populist price cap will end up costing taxpayers more than they save on power.

The other big question is what will Bryan Green do after the first year of the price cap? If he lifts the price cap, then power prices will soar, dramatically increasing the cost of living for all Tasmanians, hurting the Tasmanian economy. If he keeps the price cap in place then he could seriously damage Aurora over the long term, forcing taxpayers to spend millions of dollars to prop up his political ambitions.

Bryan Green needs to explain what this election policy will mean in coming years to Aurora's bottom line but also and importantly to ordinary Tasmanians who may see a benefit in the cap next year but who could be paying dearly for it into the future.