Prime Minister Gillard Once Backed This Investment In “Poles And Wires” – For A Good Reason

Posted on Tue 12/04/2012 by

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Bolt New 01By Andrew Bolt ~

Australian Prime Minister Julia Gillard

Australian Prime Minister Julia Gillard

Australia’s Prime Minister Julia Gillard is against “gold-plating” of the electricity supply – lots of investment in “poles and wires” as she describes it:

The Prime Minister will today announce her plan to stop the “gold plating” or over-investment in poles and wires that has led to big price hikes and develop new independent national reliability standards…

While the states have fought a strong campaign against the impact of the carbon tax on power bills, Ms Gillard will argue it is the gold plating issue that has delivered the biggest hit to consumers.

“Australian families are under too much pressure from their electricity bills that states keep increasing,” Ms Gillard told The Sunday Telegraph.

“They need action to cut their bills. This plan will give real help to every home. Australians have paid too much for too long due to the gold plating of networks and over-investment in poles and wires.”

Two things about Gillard’s latest position make no sense.

First, why is it good to increase power prices with a carbon tax, but bad to increase power prices by investing in poles and wires? At least investing in poles and wires gives you … poles and wires. paying a carbon tax gives you nothing at all, and especially not a change in the climate.

Second, Julia Gillard today is against big invesments in poles and wires. Just two years ago she was for them – because she knew then what she won’t admit now, that investing in poles and wires was needed to make sure the power stayed on even on the hottest days::

Gillard in December 2010:

Australians are rightly concerned about electricity prices. They’ve seen big increases, and in part they’ve seen those big increases because we’ve had a decade of underinvestment in base load electricity generation, partly as a result of uncertainty about carbon pricing. 

Well, as Prime Minister I am not going to allow the next decade to be the same as the last, meaning Australians will face ever-escalating electricity prices and the risk – the real risk – of black outs in peaks period of usage.

Gillard on ABC radio in December 2010:

HOST: So, is that a good time to add on a carbon price?

PM: Well, we have to, as a country, grapple with this issue (putting a price on carbon dioxide emissions), and I don’t want the next 10 years to be another 10 years of underinvestment in electricity generation causing pressure on prices and the real risk of black outs because we haven’t grappled with this issue. 

Gillard in October 2010:

The current price rises in a number of states have been principally caused by a sustained period of under-investment… Significant investment is required to replace ageing network infrastructure and deliver energy security.

Malcolm Roberts, chief executive of Energy Networks Association, puts the matter in clear English – always the enemy of Government spin:

Gillard referred to this investment as gold plating. Network businesses could equally say that it is giving customers what they want: a reliable supply of electricity.

So-called gold plating is also required by legislated reliability standards, introduced many years ago by the previous state governments in NSW and Queensland. These higher standards were set in response to costly blackouts.

At that time, governments believed the community was willing to pay for new infrastructure to improve reliability.

PS: Is Gillard also against “gold-plating” Internet access? If so, then there’s the Australian National Broadband Network (NBN) that she also should discuss. Why is OK for that NBN to be gold plated and not the electricity network?

Andrew Bolt is a journalist and columnist writing for The Herald Sun in Melbourne Victoria Australia.

Andrew Bolt’s columns appear in Melbourne’s Herald Sun, Sydney’s Daily Telegraph and Adelaide’s Advertiser. He runs the most-read political blog in Australia and hosts Channel 10’s The Bolt Report each Sunday at 10am. He is also heard from Monday to Friday at 8am on the breakfast show of radio station MTR 1377, and his book  Still Not Sorry remains very widely read.

Read more excellent articles from Andrew Bolt’s Blog . http://blogs.news.com.au/heraldsun/andrewbolt/