Price of electricity may rise 30 p.c.

Press, 23 February 1987, Page 14

Price of electricity may rise 30 p.c.

Electricity charges will increase 30 per cent as a result of the Government’s corporatisation programme, says the National Party candidate for Yaldhurst, Mr James Bacon.

Mr Bacon was commenting on the fact that the Central Canterbury

Electric Power Board intends to borrow more than $2 million in the 1987-88 financial year, because the board will be taxed on its surplus from April 1. Mr Bacon, who is senior lecturer in information

systems and finance at the University of Canterbury, said that the increase would be inevitable because Government

required the new Energy Corporation to pay company taxes rather than putting the money back

into operations. Mr Bacon said there would also be heavy interest charges on the $2 million loan, which would have to be passed on to the consumer. The new corporation would also

have to pay a 10 per cent dividend to the Government.

Mr Bacon said that the higher electricity charges that would have to come in with the energy corporation showed that the corporatisation programme is all about more money for bigger Government.

“This is how the government intends to balance its budget blow out,” he said. “It is a hidden form of taxation.”

With electricity such a basic commodity, ordinary families would .be hurt most, Mr Bacon said.