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Thursday, 16 December 1993
Page: 4828

Senator HARRADINE —My question is directed to the Minister representing the Treasurer. Given the admission by federal Treasury to Estimates Committee D that it had not studied the impact on families of monopoly pricing by public utilities, does the government endorse the view expressed by the Industry Commission in its annual report that `public utility dividend payments to governments are too low'?

Senator McMULLAN —I was not aware that the Industry Commission had made that report, so I cannot deal with it in context. But as to whether dividend payments by those utilities are too low overall, I think that some of them are and that some of them are not—both at the federal level and in some of the states. It varies from state to state.

  Senator Harradine would understand that the Industry Commission approaches this matter from a particular philosophical point of view about the role of prices in making markets operate and a belief in the distributive capacity and power of the price driven market system. One would therefore expect it to come up with that recommendation. Government is a bit more complex than that. So I do not think—as a universal statement—that all dividend payments are too low. I for one would accept that the government, overall, does not have a view. We deal with the dividend payments of our instrumentalities on a case by case basis. But I suspect that some of them probably are too low.

Senator HARRADINE —Mr President, I ask a supplementary question. I am a little surprised that the minister has not focused on this very important matter, which has become more and more important and which affects many family lives. The annual report of the Industry Commission also stated that public utility monopoly pricing above marginal costs `is simply another form of indirect taxation'. Does the government consider that higher charges for water and other necessities of life are any fairer as taxes on families than taxes on food and clothing, which were rejected by the public at the last poll?

Senator McMULLAN —As a matter of general principle, I do not think that public utilities should be used as taxing mechanisms.