Nahan misleads media over Western Power financials

Monday 30 May 2016

Treasurer and Energy Minister Mike Nahan is misleading the media in an attempt to downplay the significant financial benefits Western Power currently deliver to the state government.

In a newspaper article today, Dr Nahan is reported as having released figures that argue Western Power is a drain on state government finances.  Dr Nahan is then reported as arguing that the $315 million in interest payable on Western Power’s borrowings of $7.1 billion in 2014/15 “more than offset” the $132 million dividend the utility paid the to state government that year.

Electrical Trades Union WA (ETUWA) Branch Secretary Les McLaughlan said Nahan either misunderstood his own budget papers, or he was deliberately misleading the media.

“Three weeks ago, we released an independent report that outlined how, after earning enough revenue to pay its own $315 million interest bill, Western Power delivered an additional $515 million in financial benefits to the state government,” Mr McLaughlan said. 

“The most glaring inaccuracy in the figures Nahan is reported to have released relates to Western Power’s interest bill.  Nahan appears to be deliberately creating the impression that the state government has to cover the cost for this.  However, as Treasurer, he should know that Western Power covers its own interest bill from the revenue it earns.

“A glaring omission from Nahan’s figures is the $136 million Western Power provided to cover the state government’s commitment to the Tariff Equalisation Fund, which ensures regional Western Australians don’t pay any more for their electricity that people in Perth.

“The only way Nahan can leave this out of any calculation of the benefits Western Power delivers the state government is if he intends to discontinue this program once Western Power is privatised, sending regional power prices through the roof.

“By misrepresenting who pays Western Power’s interest bill and forgetting to mention that Western Power covers the Tariff Equalisation Fund, the figures that Nahan provided the media are immediately out by almost half a billion dollars each year – and that’s before you take tax equivalent payments and retained earnings into account.

“No wonder Western Australia’s finances are in such a mess, when we have a Treasurer who so grossly misunderstands his own budget papers, or is willing to say anything to support his ideological pursuit of privatisation.

“It is clear that the media cannot rely on figures being released by the Treasurer and I encourage all media to refer to the ORION Consulting research on our website for a factual and fully referenced analysis.”

Use Your Power is a community campaign that was established by the Electrical Trades Union and the Australian Services Union in 2014 to fight the Barnett Government’s plans to privatise Western Australia’s publicly owned electricity system.