THE PRESS FRIDAY, DECEMBER 4, 1981. Power bills that hurt

Press, 4 December 1981, Page 12

THE PRESS FRIDAY, DECEMBER 4, 1981. Power bills that hurt

In a study made public this week, the Council of Social Services identified the rapid rises in electricity costs over recent years as a cause of suffering among lowincome families and social welfare beneficiaries. Because a further increase of 12 per cent in the bulk power tariff is due to take effect from next April, the problem can be expected to become worse. Increases in the price of power which can be managed easily by the better paid, loom disproportionately large in the budgets of those on lower incomes or benefits because the percentage of household expenditure spent on electricity and other fuels is necessarily higher for those on low incomes. Although it may be hard to identify cases of serious hardship arising from the size of an electricity bill, such bills are certainly causing many people concern and perhaps requiring them to take steps to reduce use of power which are not in the best interests of their families or dependants. The case for assistance to be given, even if extreme hardship cannot be demonstrated, is strong. The assistance may not have to be financial. There are ways of holding power consumption, and so power bills, down without any sacrifice of comfort or wellbeing. Some, at least, of these do not require initial expenditures which are beyond the means of. low-income households. Counselling and advice in these areas could go some way towards easing the burden of power charges on lowincome households. So too could budgeting advice, and the introduction of ways in which power bills can be paid less painfully than through one big bill every two months or so, which can easily throw a delicately balanced family budget into confusion. Nevertheless, the problems which high powej bills bring to some families will only be solved by financial assistance. It would be most unwise to attempt to solve these problems by reducing the cost of electricity to all consumers. There may be reasons why this should be done, but helping those in difficulties with their power bills is not an additional reason for adopting this course. To spend, in effect, government funds to help the many who do not need assistance as well as the relatively few who do, would be unsound.

The assistance should be provided selectively, to those who really need it. The same argument which makes across-the-board food subsidies unwise also applies to an across-the-board subsidy on electricity supplied to domestic consumers. It would be better to “target” the assistance directly to those in need in the form of discounts, rebates or additional benefits. The Department of Social Welfare is already seeking information about a possible discount scheme on power bills for low-income workers and beneficiaries. Rebates for people suffering genuine inconvenience because of the price of electricity could be applied in much the same way as rebates are already offered certain industries and farmers for certain farm activities. Such a scheme should provide relief to those who need it without unduly increasing government expenditure and without any insurmountable administrative problems. An across-the-board decrease in electricity prices would, of course, solve many of the problems which arise from low-income families receiving high power bills. A case can be made for saying electricity is over-priced and that domestic consumers are bearing a disproportionate share of the cost of capital works needed to supply electricity at “bargain” rates to certain large industries. But it would be sensible to keep any debate about whether assistance in meeting big power bills should be extended to families on low incomes, and if so, how this might be done, separate from arguments about the level of the bulk tariff for power. The problems which arise from people on low incomes facing hefty power bills only exist because power is highly priced, perhaps too highly priced. But effective assistance for those in need should not be stalled or postponed because the Government will not budge on the major question of over-all power prices. It will be much easier to persuade the Government to help beneficiaries and those on low incomes who are hurting because of high power bills and it seems fairer to them not to let their plight become caught up in a bitter and prolonged, essentially political, argument about whether domestic consumers are subsidising the construction of power stations for the benefit of a few large industrial projects.