How you just lost $20 without even hearing about it

A PROPOSAL to remove GST from electricity rates - which could slash as much as $200 from an annual energy bill - has been voted down.

The private bill was rejected despite fears Australians could die in the upcoming summer season due to "crippling" costs.

Liberal Democrat senator David Leyonhjelm argued that despite water being GST-free because it is considered an "essential service", energy is not given the same consideration.

Senator Leyonhjelm, who put forward a private bill, has been campaigning for the government to right a wrong and help ease the pain of household bills for average Australians.

He said households have been crippled by soaring electricity costs over the past decade, with bills rising about eight per cent each year.

In the last quarter alone, power bills rose by a whopping 20 per cent.

According to the Australian, the proposal would have cut Australian power bills by nine per cent on average.

But his bill was voted down by Labor.

"We will never know just how many deaths this winter can be attributed to unaffordable electricity but the number would be substantial," Senator Leyonhjelm said, adding a stark warning that more deaths would occur this summer if something wasn't done to fix the problem.

"Thousands of households will go without cooling this summer and more deaths will be the result.

"I challenge those who feel morally superior when they cheer for policies that make electricity more expensive to acknowledge these deaths. I challenge them to acknowledge their role in these deaths."

Treasurer Scott Morrison refused to back the bill saying the $2 billion cost to each state was too high.

"I have no doubt they would be running around saying now we've got to shut hospital beds or schools or the rest of it because you've ripped $2 billion a year out of the GST," Mr Morrison told ABC radio.

"Creating a tax merry-go-round like that where it's ... given away on one hand and taken back on another, I think it's a bit of smoke and mirrors."

He said NSW and Victoria would be the worst hit financially, losing $500 million each, but these costs would be recovered thanks to their multimillion-dollar surpluses. Western Australia would lose $80 million, while South Australia, Tasmania and Queensland would lose $1 billion between them.

Yet an investigation by the Parliamentary Budget Office found that Senator Leyonhjelm's proposal would in fact raise government revenue by "$600 million over the next four years because the foregone GST meant Canberra wouldn't have to pay the states as much", according to AAP.

South Australia now has the most expensive electricity in the world, three times more expensive than the US and 50 per cent higher than the UK.

News Corp Australia

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