Discounted power bills won't stop them going up
A QUEENSLAND economist has warned the plan to spend $3.4 billion from state asset leases on reducing electricity prices $5 a week would be "wiped out" within its first years.
Queensland University of Technology lecturer Dr David Willis gave the caution on Tuesday - the same day Queensland Parliament debated whether leasing assets for 99 years was effectively the same as selling them.
"A family of four with a pool is forecast to save $1190 over five years, or around $5 a week, on their electricity bills if the asset is leased for 100 years," Dr Willis said.
"The issue with offering a subsidy is that it tends to be quickly eclipsed, as we have seen with the First Home Owners' Grant, for example.
"Its introduction just inflated house prices and made it impossible to see any advantage.
"This very modest family discount does not stop the new power company from increasing prices as it searches for profit for its new shareholders.
"Therefore, the $5 a week will be wiped out in the first years' price increase."
Labor leader Annastacia Palaszczuk grilled Premier Campbell Newman on the difference between 99-year leases and asset sales.
The Opposition quoted the premier previously saying it was a mistake "selling off the silverware" and the treasurer saying leasing was "as good as selling the farm".
"When one leases an asset it comes back to you," Mr Newman responded.
"All Queenslanders know that. They are quite comfortable with that proposition."
The proceeds of a $37 billion leasing plan is to be spent on paying down debt ($25 billion), job-creating infrastructure ($8.6 billion) and reducing power bills ($3.4 billion).
"Why is the State Government offering a $3.4 billion fund from the lease of tax payers' assets to discount electricity bills if they are so sure that off-loading the electricity assets will not create a monopoly and hence prices will rise further?" Dr Willis said.
"And what is the government going to do with the $1.3 billion windfall it will receive from paying interest on $55 billion of debt instead of $80 billion?"