Power cuts loom amid call for GST exemption on bills

CALOUNDRA MP Mark McArdle and SPS Energy owner Jock Howard overlooking the installation of a massive solar array.
CALOUNDRA MP Mark McArdle and SPS Energy owner Jock Howard overlooking the installation of a massive solar array. Contributed

SMART households should prepare for rolling power cuts during a long, hot summer, according to a Sunshine Coast energy expert who says a growing population and switch to electric vehicles will only further test Queensland and Australia's power network.

The warning comes as former Howard government minister Alex Somlyay has called for household power to be GST exempt in the manner of health, education and food to effect an immediate 10% reduction in cost to consumers.

Mr Somlyay said domestic power was as important to household budgets as any of the other exemptions and that business was already able to claim rebates for the GST costs it incurs for electricity.

He said the move would be electorally popular, have no revenue implications for the Commonwealth and that the states had already had their share from their GST take which had doubled along with prices.

"If they do away with GST the reduction (to power bills) would be immediate," Mr Somlyay said.

The move has been dismissed by Fisher MP Andrew Wallace who said any addition to GST exemptions would translate as less revenue for state governments to fund frontline services like hospitals, police and schools among others.

He said although the states did little to raise their own revenues under federal governments of all persuasions they had constantly claimed to have insufficient funds to deliver those services.

"The Coalition Government acknowledges that many people are doing it tough with increased energy bill costs," Mr Wallace said.

"That is why the Federal Government has introduced a suite of reforms which is putting downward pressure on power and gas prices, by for example removing all subsidies to renewable energy generation companies under the National Energy Guarantee."

Jock Howard, the president of Cleantech Industries Sunshine Coast and owner of SP Power based at Eumundi, dismissed those reforms as "push and poke" which would make next to no difference.

"The July 1 increase in electricity costs has redefined the market," he said. "Ergon has become so expensive people are looking for alternatives."

Mr Howard warned the Queensland Labor Government's call for people to set their air-conditioning units to 26 degrees over summer would be ignored.

"People may as well open a window," he said. "It's an admission the networks can't support demand at a comfortable level.

"Smart home owners should anticipate rolling blackouts."

Mr Howard said the need for subsidisation of solar had been significantly reduced by a high Australian dollar and plummeting manufacturing costs, a situation he predicted would continue through Donald Trump's presidency.

He said the cost of batteries dropping to that level was a year away but already home owners in increasing number were looking to detach completely from the grid.

"They talk of cheap power, that's solar by a long margin," Mr Howard said. "It doesn't require hundreds of kilometres of poles and wire.

"The migration to batteries has already started. It's a trickle now but will be a torrent in three years."

That, he said, would be a good thing for the grid which would face increasing strain under demand from a growing population with most new homes fitted with air-conditioning and a pool in every third backyard.

Fairfax MP Ted O'Brien said while Mr Somlyay's contribution was welcome there was no silver bullet and many factors have come together to drive up energy prices. 

"We understand that increases in electricity prices have been really hurting households and businesses across the country, including the Sunshine Coast," he said. 

"The Turnbull government is working hard to fix the system, helped significantly by the Prime Minister's announcement of the National Energy Guarantee just this week.

"Our National Energy Guarantee will deliver affordable energy, bring down wholesale prices and ensure reliability of supply while also meeting our Paris emission reduction cuts."

Topics:  alex somlyay andrew wallace electricity energy policy gst exemption power cuts

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