Labor promises to reduce power costs if elected

The State Opposition has promised to cut power prices by seven per cent if it wins the next state election.

The Opposition Leader Mark McGowan says Labor would scrap a levy paid by customers in the South West interconnected grid to subsidise bills in Esperance, the North West and the Kimberley.

The idea was recommended by the Economic Regulation Authority and would cost the government about $200 million a year.

Mr McGowan says the government would pick up the $200 million bill.

He says that would save the average family about $111 on their annual bill.

"I see cost of living as a huge issue for West Australian families," he said.

"I also see this as an important economic reform and it's also about protecting regional consumers and helping small business so it goes across the board." Mr McGowan says Labor will wait until the mid-year budget review, due in December, before outlining how the commitment would be funded.

The proposed policy comes after power prices in WA have risen by 62 per cent under the Barnett government, adding up to $520 to the average annual household power bill.

Cost shifting The State Government has dismissed the election promise as cost shifting.

The Energy Minister Peter Collier says it has been poorly thought out.

"We already pay, we already have a subsidy for electricity of $1.4 billion," he said.

"Now, all this is going to do is add to that level.

"Western Australian taxpayers need to understand that that is money, that we as a government cannot or the opposition can, spend on other service delivery areas." The WA Council of Social Service's Irina Cattalini says it is a positive move.

"We think it's fairer, more efficient and more equitable," she said.

The Chamber of Commerce and Industry's chief executive, James Pearson, has welcomed the Labor pledge.

"It's important that if the government is going to subsidise the cost of providing power to people in regional Western Australia, that that be as transparent as possible," he said.

"And, it's better if that be done through a government subsidy than being paid for directly by businesses and households in the South West." Mr Pearson says it is a good first step towards improving WA's energy market.

"Removing the levy means it will no longer be paid by households and businesses in the South West, it will be paid by all tax payers though," he said.

"At least it should be a transparent subsidy but much more is needed and what we really need is we need to encourage private sector investment." The Prime Minister Julia Gillard has previously called on state governments to rein in power price hikes.

She has said regulators will be given more power to haul in the price hikes.

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