The Queensland government is pointing to a new report to argue electricity prices would not increase under its asset leasing plan.
If the Liberal National Party (LNP) wins the state election it will lease $37 billion worth of state assets, including two electricity generators and three power distribution firms.
The government would spend almost a third of the money raised on new infrastructure, but the state opposition has attacked the plan arguing electricity prices would increase as businesses sought to make a profit.
The LNP’s proposal has been given credence by a report by Ernst and Young, Treasurer Tim Nicholls says.
“The report shows that over the past 17 years, network charges for Queensland’s publicly operated assets have increased 140 per cent,” he said.
“Over the same period, network charges in Victoria and South Australia – where the electricity grid is privately run – have fallen as much as 18 per cent.”
The report was a demonstration of Labor’s “economic incompetence”, Mr Nicholls said.
But the document failed to acknowledge some of the biggest factors contributing to higher electricity prices across Australia, University of Queensland Professor John Quiggin said.
They included the failed process of market reform, corporatisation and privatisation, he said.
“Although the problems have differed from state to state, there is no evidence that states which undertook full scale privatisation in the 1990s have performed any better,” Prof Quiggin said.
“South Australia has some of the highest electricity prices in the world, and Victorian prices are comparable to those in NSW and Queensland.
The LNP plans to use $3.4 billion of the asset leasing revenue for a cost of living fund that would take $577 off a typical power bill over five years.
Meanwhile Labor has pledged not to lease assets, but rely on the profits of the businesses the Newman Government wants to sell to help pay down debt.
Central to Labor’s fiscal strategy is the establishment of a “debt-reduction trust” to quarantine two-thirds of the returns from the income-earning assets proposed for sale.
The trust would pay down $5.4 billion of general government debt over six years and $12 billion of debt over 10 years.