Small biz gouged on electricity: Carnell

Marnie Banger
(Australian Associated Press)

Small businesses are being dealt more than their fair share of Australia’s rising electricity prices, the small business ombudsman says.

Kate Carnell says she is “deeply concerned” that recent submissions to the Australian Competition and Consumer Commission’s inquiry into the electricity system show small businesses are being gouged.

Households in several states are dealing with price increases of between 15 and 18 per cent but most small businesses are grappling with hikes above 20 per cent, she says.

“It’s totally unacceptable that energy-dependent small businesses like manufacturers and rural industries are being slugged more than householders and big business,” Ms Carnell said in a statement.

The ombudsman has highlighted several examples of submissions to the inquiry showing how small businesses have been hit by price jumps, including a South Australian Wine Industry Association case study of a larger winery.

The winery invested $400,000 in initiatives to reduce its electricity costs by about $120,000 a year, only to face a 160 per cent price hike that meant it had to pay $250,000 more annually.

The Printing Industries Association of Australia said some of its members had reported electricity price rises of between 25 and 67 per cent over the past 12 months or a comparable period.

It said one larger printer in Melbourne is preparing for its electricity bill to increase threefold, from $120,000 each year to $360,000, when its current contract ends in December.

“Many of our members have incurred these increases despite decreasing the amount of electricity they use,” the association’s submission said.

Business SA said regional South Australian feed maker JT Johnson & Sons had its total energy bill double from $800,000 to $1.6 million in mid-2016.

The hike, on the back of the wholesale energy peak price tripling from 6.4 cents to 19.3 cents, came just after the company underwent a major upgrade of its power infrastructure.

Written submissions to the ACCC inquiry closed at the end of June, with public hearings now being held until mid-August.

A preliminary report is expected to delivered to Treasurer Scott Morrison – who requested the inquiry into electricity prices and supply – by September 27, and a final report completed by June 30, 2018.

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