Ben Potter & Andrew Tillett wrote in the Australian Financial Review August 5th, 2016, “Australian residential customers are paying the highest electricity prices in the world – two to three times more than American households” . Whilst Australian residential consumers are struggling, the impact of these high power prices on business is huge and likely unsustainable.
It goes without saying, that unless Australia finds a way to reduce the price of energy and remain competitive with the rest of the world, we will see industries move off shore. But, what of small business? They will find it very hard to move off shore. Ultimately, their only choice might to be to shut-up-shop when their power costs keep rising with the resultant job losses.
These power increases have coincided with the introduction of subsidies for alternative energy, primarily Solar and Wind. I am an environmentalist at heart, and I support initiatives to make our planet a better place. What I do not support is an over reach, where the price of energy is making it difficult to stay in business.
Given that Australia only contributes to about 1.3% of the world’s global emissions, we risk sending our business’s broke, and leaving our most vulnerable without the financial capacity to heat or cool themselves, or simply able afford the essential power to run their households.
Speaking to a medium-sized business last year, I was told that their “3-year power contract increased from $30,000 p.a. to over $100,000. p.a.” . For a company to absorb an increase of this size and stay in business and make a profit they were faced with no alternative but to restructure their business model. I am now aware that they have moved some of their back-office functions to an overseas destination, with lower labour costs and overheads. It was not unexpected but very sad for their Australian former employees.
Australia has just about more natural resources than any other country in the world, and a small population to feed. Yet with all these resources we are unable even provide our people with a cheap source of energy. If we do not change this fast, the lights will be turned out on this country.
Are the politicians even listening ? I think not! Perhaps we need the lights to go out in Parliament before they know what’s happening.