PM warns of policing big power bills

CANBERRA: Prime Minister Julia Gillard has given the states four months to come up with ways to slow surging energy prices or face market watchdogs with more powers to ease the pressure on households.

Ms Gillard used her first day back at work yesterday after annual leave to single out the conservative states of NSW, Queensland and Western Australia and draw a line to separate rising electricity prices from the Federal Labor Government’s July 1 carbon tax.

But the states stuck to their argument that the carbon tax is to blame, with the energy ministers of Queensland and NSW accusing Ms Gillard of trying to stem the political damage from the impost on major polluters like electricity generators.

As a new opinion poll showed Labor’s two-party preferred vote had bounced 5 percentage points to 33 per cent, Ms Gillard said the average electricity bill had risen by at least 48 per cent over the past four years.

‘‘ Australians can’t afford the same kind of increases over the next four years,’’ Ms Gillard said yesterday.

The prime minister now wants the states to find solutions to the price pressures, for consideration at the next Council of Australian Governments meeting in December.

‘‘Decisions made this year will reap benefits over several years to come, so we must get on with the job now,’’ she said.

If a deal cannot be reached cooperatively, the Federal Government will give stronger powers to the Energy Regulator and the Australian Competition and Consumer Commission.

The Federal Opposition and Coalition state governments maintain the best thing Ms Gillard can do is axe the carbon tax.

But Ms Gillard rejected this, saying energy prices were rising even though demand was falling.

Federal Energy Minister Martin Ferguson said the states should look at whether they were over-spending on infrastructure – a message that was backed by the Australian Greens.