Cost of living Energy prices

Public Accounts and Estimates Committee: budget estimates 2016-17

23 August 2017

Ms RYAN (Euroa) — I welcome the opportunity to speak today on the Public Accounts and Estimates Committee report on the 2016–17 budget estimates. I want to make particular reference today to the report's discussion of the brown coal royalty, which is obviously one of the revenue measures that the government introduced in the 2016–17 budget. The brown coal royalty, which has been placed on generators in the Latrobe Valley, is expected to raise $262 million for the government over the next four years. At the time the Premier and the then energy minister came out and said that it would have absolutely no impact on Victorians or on businesses across the state, but we have now seen that is not the case.

It was only shortly after that, as we now know, that Engie, the French company that owns Hazelwood, decided to pull the pin and close that plant early. As a result of the closure of Hazelwood, Victorian has now lost 25 per cent of the state's energy supply, which has been taken out of the market. I am deeply concerned that not only did the government not fight to keep Hazelwood open in order to secure our state's energy supplies but that there are members on the opposite side of the house that I think were in fact pleased to see it close. There is a real irony in the fact that the party that claims to be the party for workers has in fact undermined many of the industries that are intensely exposed to these increases in energy manufacturing costs and undermined the ability of workers to be meaningfully employed. It has also undermined the jobs of those people who were directly impacted through the closure of Hazelwood in the Latrobe Valley.

In my own electorate we are seeing some simply extraordinary increases in the cost of energy. I know that that is being repeated right around Victoria and regional Victoria. I honestly believe that we are yet to fully understand the employment impacts that these increases in energy are going to have. Businesses like D&R Henderson in Benalla, a major employer, has been in contact with me. They are seeing multimillion-dollar increases in the cost of energy. That was directly after the announcement that Hazelwood was closing was made. They were in negotiations, and as soon as that announcement was made the cost of their contracts absolutely skyrocketed.

They employ 176 people in Benalla. That is a significant number within the local economy there. I am very worried about the impact that this is going to have on them and on long-term employment not just for them but also for other major manufacturers. There is a stock feed mill over at Colbinabbin. The proprietor there, Alan Meyer, got in touch with me. He is actually now contemplating installing diesel generators. So you really have to ask how this helps us meet clean energy targets when businesses are now so desperate and they are facing such huge increases that they are looking to go off the grid and install diesel generators because that is more cost-effective.

I have also been in contact with a number of the health services and schools in my electorate, who are seeing increases to the tune of several hundreds of thousands of dollars. Heathcote Health estimate that they have got a 70 per cent increase in electricity prices. That is about $42 000 just in a single year in additional revenue they now need to find. That is huge in a small health service like Heathcote. Similarly Seymour Health in the 2018–19 year are facing an extra $240 000 in costs. These services — Benalla is a similar example — have all said to me that they are concerned that the government is not responding to this, that they are not receiving additional funding and that it is going to impact on frontline service delivery and patient services. People will receive a lesser service from our small rural health services because they cannot cope with these increases unless the government actually funds them directly for it. Schools across the electorate are in a similar position. The government needs to act now.

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