CLP power price freeze a ‘mad’ policy, according to political economist

A NORTHERN Territory economist has labelled the CLP’s plans to freeze power prices ‘economically mad’, arguing the policy will only worsen Power and Water’s $1.2 billion debt

Lia Finocchiaro will become the CLP’s new Opposition Leader on February 1. Picture Katrina Bridgeford.

• NEW CLP leader Lia Finocchiaro promises to freeze power prices

THE Country Liberal Party’s plans to freeze power prices for four years at 2020 levels is “economically mad” and will further deepen Power and Water’s $1.2 billion debt, according to a political economist.

Incoming CLP leader Lia Finocchiaro on Monday committed to a term-long freeze on any increases to residential power prices.

It came just months after outgoing leader Gary Higgins slammed the Labor Government for Power and Water’s debt position.

The utility’s most recent annual report revealed it was saddled with $1.2 billion of debt at the end of last financial year – almost 30 per cent of the Territory’s total net debt.

At the time, Mr Higgins said a CLP government would follow the Langoulant recommendation and penalise PWC for not “adopting a commercial operating structure”.

Ms Finocchiaro said she still supported that stance.

“It goes without saying that Power and Water will need a viable commercial operating structure,” she said.

“The Langoulant Report is an important framework and our policy on addressing budget repair, which includes government-owned corporations, will be released in the coming months.”

She said the CLP also remains committed to reviewing payroll tax for small and medium businesses.

Payroll tax is the NT’s biggest own source of revenue.

It contributes about $250 million into the NT’s depleted coffers each year.

Northern Institute research fellow and political economist Rolf Gerritsen said he thought freezing power prices would not be financially sustainable.

“It’s economically mad given Power and Water’s dire fiscal situation,” he said,

“It’ll cost us in the long run.

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“This all strikes me like a repeat of the CLP’s 2012 campaign when they promised not to raise power prices but still ended up doing it.”

Treasurer Nicole Manison said Labor had kept power prices at CPI as promised.

“We will be announcing our power price policy before the next election,” she said.

Lia Finocchiaro will become the CLP’s new Opposition Leader on February 1