Australia: Privatisations send electricity prices surging

[Hannah Bell]

For all the claims of Australian politicians and media that the country has entered a long period of prosperity, working people are confronting sharp increases in the basic costs of living. Food prices rose 43.6 percent over the past decade, and food inflation is currently running at double the general rate of inflation.

But even the food price hikes pale when compared to the scale of recent rises in the retail price of electricity. The Labor government of New South Wales (NSW), the country’s most populous state, this year sanctioned electricity price rises of 64 percent over the next three years, including a 22 percent increase on 1 July. Electricity prices have risen between 10 and 13 percent in every Australian state this year and by an average of 25-30 percent in the past three years.

Labor’s federal energy minister, Martin Ferguson, recently told reporters that, on his understanding, electricity prices were likely to rise 100 percent in the next five to seven years. These calculations do not appear to even factor in the price increases that would flow from the Gillard Labor government’s plans to put a price on carbon.

These developments are having a devastating effect, especially on low-income earners. The bottom 20 percent of income earners already spend 10-12 percent of their income on electricity, suggesting that within three years, the poorest workers and the unemployed, including aged pensioners, will spend nearly 20 percent on electricity. Most people receiving welfare payments, including the pension, already live well below the federal government’s own poverty line, which is set at an “austere” standard.

http://www.wsws.org/articles/2010/nov2010/elec-n16.shtml