Vic govt attacks fed tax on power safety

Victorian Premier Denis Napthine has criticised the federal government for taxing power companies on money they received for safety improvements after Black Saturday.

Dr Napthine says the state government gave power companies more than $200 million to reduce the risk of bushfires by making power lines safer in regional and rural areas after the 2009 Black Saturday bushfires which killed 173 people.

But he says power companies are claiming they have to put up power bills because of a federal tax on the money received.

Dr Napthine called it a travesty and said he would raise it with federal Treasurer Joe Hockey when they meet on Friday.

"It just seems ridiculous that when the state government gives taxpayers' money to the power companies to help them make power lines safer across Victoria following Black Saturday, that they have to pay tax on it, and seek to get power-price rises as a result," he told Fairfax Radio.

"That is a nonsense and we need to fix it," he said.

Dr Napthine said the government was also looking at ways to reduce gas bills, which have increased by about 66 per cent since 2008 and could increase by another 25 per cent next year.

He said gas price increases could not be avoided but the aim was to keep them to a minimum.

"What we need to do is increase the gas supply in Victoria and we've certainly got additional gas being harvested now in Bass Strait," he said.