Second Reading – Social Services Legislation Amendment (Energy Assistance Payment and Pensioner Concession Card) Bill 2017
Mr PITT (Hinkler—Assistant Minister for Trade, Tourism and Investment) (16:57): I rise to make a brief contribution. I am very pleased to be speaking in support of the Social Services Legislation Amendment (Energy Assistance Payment and Pensioner Concession Card) Bill 2017, which will help the people in my electorate of Hinkler with the ever-increasing cost of electricity. We should look at just how serious this rise in electricity prices is and what it is doing to a number of businesses, and of course to the residents in my electorate.
Year after year, the cost of electricity has risen. It has become a massive problem in the region, not just for residents but also for businesses and, in particular, for those in our agricultural sector such as canegrowers.
Third-generation Bundaberg canefarmer Dean Cayley says that his electricity prices have increased by 126 per cent since 2008—126 per cent. He is not sure there will be a fourth generation of cane farmers in his family, due to the continued pressure of electricity prices. He says that it is out of control, and it is not just for farmers; it is across all rural production. Mr Cayley’s electricity bill for the 90-day period 7 October 2016 to 5 January 2017 was $20,307. He estimates he was only irrigating for around half of that time.
Electricity pricing in Queensland, as I am sure you know, Mr Deputy Speaker Vasta, is controlled by the Queensland state Labor government. And we ask: what are they doing about it? The answer is: absolutely nothing. When it comes to rising electricity costs, they have been absolutely asleep at the wheel.
A Queensland Competition Authority increase of 2.8 per cent for customers on tariff 11 was implemented for bills between 2016 and 2017. The draft determination by the QCA says that energy costs are expected to increase for all customers in 2017-18, primarily driven by increases in wholesale energy costs and the large-scale renewable energy target costs. Based on draft estimates, a typical household on the main residential tariff, tariff 11, is projected to pay $1,515 on its 2017-18 annual bill. This represents a 1.7 per cent increase from the 2016-17 bill of $1,490. For a typical customer, on a combination of tariff 11 and controlled load tariffs 31 and 33, the expected increase will be 2.3 per cent and 1.6 per cent respectively.
Large business customers can expect increases in their annual notified price bills of between 1½ per cent and three per cent as a result of the draft change in notified prices between 2016-17 and 2017-18. The annual notified price bill for a typical customer on the main small business tariff, tariff 20, is expected to increase by $37 or 1½ per cent as a result of the draft change in notified prices between 2016-17 and 2017-18. For a typical customer on the seasonal time-of-use tariff, tariff 22A, the expected increase will be slightly lower, at one per cent. So it is hardly surprising that people, businesses and organisations are looking for a cheaper source of energy due to the Queensland state Labor government’s inability to reign in this ever-increasing cost of living.
A local hospital in Bundaberg is looking to install a solar energy system which will save $84,000 per year in hot water bills. What prompted the hospital to take this step? It recently received news of a 30 per cent increase to its $80,000 per month electricity bill, so it had no choice but to start looking for other options. On 1 July 2017 the Queensland state Labor government is set to slug motorists with a 3.25 percent increase on car registration. The residents of Queensland are being treated as a cash cow by the state Labor government—it has to stop.
The coalition government is helping out people with these rising costs of living by providing a one-off energy assistance payment. The payment is for recipients of the age pension, the disability support pension and parenting payment single, as well as for veterans and their partners paid the service pension, the income support supplement and relevant compensation payments who are eligible for payment and are residing in Australia on 20 June 2017—the test date—to assist them with their energy costs. The energy assistance payment will be $75 for singles and $62.50 for each member of a couple, providing additional assistance to around 3.8 million Australians, including 2.5 million age pension recipients, 770,000 disability support pension recipients, 260,000 parenting payment single recipients, and 235,000 recipients of veterans payments. The payment will not be taxed and will not reduce their rate of income support.
The coalition government is also looking at ways to deliver practical actions to help Australians through the next few summers while laying the foundations for long-term reforms to ensure the energy market is better equipped to handle future challenges. This is a challenge that I think both sides of parliament need to address. This should be a bipartisan issue. It affects all people and all businesses in this country, and we need to get on with it.
The government will provide $7.9 million in 2017-18 to the ACCC to review retail power prices. The ACCC will produce a paper within six months on its preliminary insights into the strategies and pricing behaviours of key electricity retailers. The ACCC’s inquiry will identify and report on the key cost components of electricity retail pricing and how they affect the retail offers made to customers. The inquiry will examine whether electricity retailers’ margins and profitability are in line with their costs and risks. The inquiry will consider any obstructions to consumer choice, such as the transparency and clarity of contracts that energy companies offer to consumers. This is something which has been raised with me on a number of occasions. We have a local baker who is with particular supplier and who had a no-exit or no-return component in their contract. The expectation for the next 12 months for this baker was an increase from some $45,000 a quarter to $120,000 a quarter. They simply did not have that on their bottom line. This has to be addressed. In this instance it was sorted out through an arrangement between other providers. However, this simply cannot continue.
The inquiry will also consider the competitiveness of offers available to larger business customers and will take into account wholesale electricity market conduct, price and cost issues where relevant. The terms of reference provided to the ACCC will direct them to consider the key cost drivers of retail electricity pricing, the existence and extent of any entry barriers in retail markets, the impact of vertical integration, whether there is any behaviour preventing or limiting competition or consumer choice, the profitability of electricity retailers and whether these profits are commensurate with the risk retailers face, and all wholesale-market price, cost and conduct issues relevant to the inquiry.
The Hinkler electorate has one of the highest numbers of retirees in the nation, but I want to make it very clear to those listening, to members in the House and of course to my constituents: seniors are a valued part of our community. The seniors in our community are the people volunteering and making sure sporting and recreational clubs continue to operate and attract new members. These include clubs like the Bundaberg Bowls Club, which I visited recently to see the upgrade to their shade structures. That upgrade was funded through the very successful Stronger Communities Program, which I am pleased has been extended for a third round. Those new shade structures are a huge benefit to the club for both player comfort and SunWise health outcomes. Not only does the bowls club have its own competitions; the club is used by a number of other groups. The Endeavour Foundation, with 12 to 15 players, uses it twice monthly. Students from North Bundaberg High School—about 80 students a week—use it, as lawn bowls is included as a component of their school sport curriculum. A varying number of NAIDOC children, of mixed ages, use it. They both learn and participate in the game, with the club providing junior bowls sets and rubberised bowls sets for their smaller participants. A group of mature-aged ladies, in varying numbers, takes advantage of the playing facilities and equipment every Wednesday. And periodically there are barefoot social bowling events held by various social groups. And I am sure that my colleague the assistant minister has been to many barefoot bowling events in his time in his local electorate!
With an ageing population, the coalition government is committed to providing a sustainable aged-care system that meets the needs of our older Australians. Just last week, the successful applicants in the 2016-17 Aged Care Approvals Round were announced. More senior residents in Hinkler will benefit from an additional $11.4 million for 174 new places in Bundaberg in the north of my electorate—144 residential care places at The Lakes Aged Care and 30 additional residential care places at Kalkie Residential Care Service. This funding will provide new aged care services or enable them to expand their current facilities. This is in addition to funding announced last year for new services in the southern end of the electorate, which are under construction and nearing completion—and can I say they look magnificent.
The new residential aged care places followed the announcement of 475 short-term restorative care places, which help older people remain in their homes longer after an injury or illness. It aims to slow functional decline in older people and improve their health and wellbeing so they can remain independent for as long as possible and avoid prematurely entering permanent residential aged care. Older Australians want and need flexible services that will help them when they need it and encourage independence for as long as possible. These places will help people age well and access care as needed.
Under this bill, the pensioner concession card will be reinstated for around 92,300 former pension recipients. Of course, this has been well received by those people in my electorate. Former pensioners who lost entitlement to the pensioner concession card when they ceased being eligible for the pension on 1 January 2017 due to the rebalancing of the pension asset test will once again be eligible for this card. The pension changes were designed to ensure the pension remains sustainable into the future by making it fairer and better targeted. Australians are healthier and living longer than ever before. By 2054-55, one Australian in five will be aged over 65. I think that is something we as a nation should celebrate. By 2054-55, there will be 2.7 people of working age for every person aged over 65. That means fewer people of working age will be paying tax to support those in retirement. The changes only impact people with significant assets outside of their home who have greater capacity to support themselves.
From 1 January 2017 these people were all issued with a health care card and those over age pension qualification age were also issued with a Commonwealth seniors health card. These cards provided the same benefits to the card holder in terms of access to cheaper medicines through the Pharmaceutical Benefits Scheme and lower extended Medicare safety net. These cards did not, however, provide access to free hearing services provided by the Department of Health for a range of concessions and benefits provided by states and territories and/or private providers which are available to pensioner concession card holders. The coalition government has decided to reinstate the pensioner concession card for those individuals to maximise concessions to this cohort. Reassuring the pensioner concession card will help overcome this anomaly and help facilitate people to again access these discounts and concessions. Consistent with the health care card and Commonwealth seniors health card they have now, the pensioner concession card will be automatically reissued from 9 October 2017 with an ongoing income and asset test exemption. This amendment will help out those who need assistance with climbing electricity bills. It will go a long way to assist pensioners in managing their daily budgets. I commend the bill to the House.