Allan Labor government accused of creating ‘sneaky tax’ through energy fund loophole

The Allan government has been accused of creating a ‘sneaky’ new tax by allowing an energy fund to be raided by the state treasurer.

The Allan Government has been accused of creating a “sneaky” new tax by allowing an energy fund to be raided by the state treasurer. PICTURE: ZOE PHILLIPS

The Allan government has been accused of creating a “sneaky” new tax by allowing an energy fund to be raided by the state treasurer.

Legislation before the state parliament will establish a new community benefit fund for regional Victorian areas where renewable energy projects or high voltage power lines are being built.

The fund will be filled when power giants building infrastructure pay fees to connect to the grid, while those costs can be passed on to households via transmission charges on energy bills.

Each renewable energy zone will have a fund, with a local community group to decide what it is spend on.

Legislation before the state parliament will establish a new community benefit fund for regional Victorian areas where renewable energy projects or high voltage power lines are being built. Picture: NewsWire / Nadir Kinani

But the legislation also gives the state treasurer control of the cash, and says that the treasurer can direct the state’s transmission planning body, VicGrid, to pay “a specified amount of money to be paid into the Consolidated Fund”.

This would mean money could be stored in general revenue to prop up the Budget or pay for other things.

The government insists it would only use the fund for what it was established for, and that the legislative provision is common for statutory government funds, but opposition energy spokesman David Davis slammed the “sneaky” fine print.

He said all consumers would pay for the fund through their energy bills, but there were now “sneaky provisions to funnel money collected specifically for community benefit purposes into consolidated revenue”.

“The Allan Labor government has introduced a mechanism to ‘steal’ this money from electricity consumers and funnel the money into consolidated revenue,” he said.

“It is a new tax on electricity consumers, a new tax, pure and simple.”

The fund will be filled when power giants building infrastructure pay fees to connect to the grid, while those costs can be passed on to households via transmission charges on energy bills. Picture: MELBOURNE AIRPORT

A Victorian government spokesperson rejected Mr Davis’s attack.

“All money raised will benefit local communities across regional Victoria — any suggestion otherwise is a lie,” they said.

“This new approach is making sure communities that host energy infrastructure see real and lasting benefits.”

The government has faced a fierce backlash from some regional communities over its renewable energy zone and transmission plans, which it says will take Victoria to net zero emissions later this century.

Farmers have protested against high voltage power lines being built on their land, and are threatening to block access.

Landowners will be entitled to compensation if they host transmission lines, with the government promising annual payments of $8000 per kilometre, for 25 years.

Originally published as Allan Labor government accused of creating ‘sneaky tax’ through energy fund loophole