The PIAA has backed the 56 recommendations made by the Australian Competition and Consumer Commission (ACCC) following its inquiry into the Australian electricity market, but says it does not go far enough to solve immediate issues.
Commercial and industrial customers, the heaviest users, could see electricity costs decrease on average by 26 per cent, says the ACCC, which describes the current market as broken.
The body says its recommendations will save Australia’s 2.2 million small to medium businesses could save an average of 24 per cent on their electricity bill, if its recommendations are adopted.
Andrew Macaulay, CEO, PIAA says, “The issue is that neither side of politics understands economics 101, they have continually interfered with markets which is why we have rising energy prices. Now, to fix the market swiftly, as it needs, they will have to interfere further.
“The only way to do that, which is where the report has not gone far enough, is that the Government needs to not only guarantee investment in on-demand power, but supporting the investment themselves.
“They have set the precedent for the past decade, so it is nonsense to say they do not interfere. Industry is bleeding, people are losing jobs, and consumers are suffering.
“The report clearly says to government, the national energy guarantee (NEG) needs to broaden the base of where energy is coming from, it needs to support dispatchable power, but the issue is urgency. It is one thing saying these things going into an election, it is another to deliver it in the immediate term, and the prime minister seems really good at saying things rather than doing things.”
Rod Sims, chairman, ACCC, says, “Many small to medium businesses operate on small margins, and cannot afford the increases to their costs that have occurred over past years.
“Commercial and industrial customers, like mining and manufacturing companies, have watched what has been a relative competitive advantage to them, affordable electricity, now threatening their viability.
“The National Electricity Market is largely broken and needs to be reset. Previous approaches to policy, regulatory design and competition in this sector over at least the past decade have resulted in a serious electricity affordability problem for consumers and businesses.”
Walter Kuhn, president, PIAA says, “The report has some good points, but also some average points. From my perspective, we need to do a lot more to fix the energy issue. The way it is going up, it will start to cost jobs. If that becomes a fixed cost, with wages as a variable, it will cut into wages.
“We put solar on our roof some years ago, but even with that our power bill is still more expensive than it was before we put it in.
“I do not think the ACCC is able to bring it down to where it should be, costs should be lower as it is in Europe and America, when we have all the natural resources here. Otherwise all manufacturing in Australia will go as we will not be able to afford it.
“If it puts fixed pricing in, they are saying it will be a decrease of 26 per cent, but that is only a token gesture compared to how much costs have went up. It is a start, but not the industry role the industry needs. We need to have prices comparable to America. They pay 5-7c per kilowatt, we are paying up to 29c per kilowatt, when we have all the natural resources. Go figure.”
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Maybe they might cut us some slack on electricity cost – have you noticed petrol prices have been going up and now it doesn’t seem to go any lower than $1.32 here in Victoria? Well maybe these products do come under the Energy umbrella – controlled/coordinated by whom? My favourite (bad joke) though is banking; the family “home loan” in my view should get some real help. I mean taking out “mortgage insurance” for the bank?! – and so after the bank gets looked after by the insurance company, the insurance company seeks to recover cost from the one who paid the insurance premium??! Why not the cover for oneself and if one get’s into hardship and can’t pay then the insurance kicks in and pays the bank on behalf of the customer. And then there bank interest, now apart from the equivalent of buying one house (and land) for the bank over the course of a loan just for borrowing some money to house your family, the bank is also underwritten by the RBA — yes, the banks are covered 3 fold; firstly by your blood-sweat-n-tears, two, by your property and the mortgage insurance that you pay for and then – three, by the RBA. Why can’t the RBA offer home loans for one family home and charge the family the 2% and like you, I’d gladly take out mortgage insurance to ensure the RBA is looked after. This ain’t over by a long shot =]