Northern exposure: Queensland poll test case on power prices

Queensland election: electricity to drive producer votes at ballot box


National Issues
Harrisville farmer and Dairyfarmers Organisation vice president Ross McInnes says power prices are a top priority at the state poll. Photo by Robert Shakespeare.

Harrisville farmer and Dairyfarmers Organisation vice president Ross McInnes says power prices are a top priority at the state poll. Photo by Robert Shakespeare.

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Power prices top priority for producers in November elections

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BAD energy policy has hamstrung industries across the country and now, with the impending Queensland state election, producers have their first opportunity to pass the price pain to their ballot papers.

The vote, on November 25, will be closely-watched by state and national political parties, particularly in regional electorates where agriculture is a significant contributor to the economy.

Citrus producer Judy Shepherd, secretary of Gayndah Fruitgrowers representing the Burnett Valley region, said power prices were a primary concern. The industry draws power at high rates for heavy pumps, cool rooms and packing sheds.

“Where I am from, and in my industry, the election will be all about power bills. In 2005-06, my annual bill was $16,000 and last year it was $43000,” Ms Shepherd said.

After a challenging drought, which forced growers to pay for power to pump water to sustain their permanent plantings, the industry is enjoying a resurgence thanks to recent free trade agreements that opened market access to South East Asia for mandarin growers like Ms Shepherd.

But power bills are a significant component of businesses costs and electricity prices rises have impacted producer margins and employment numbers.

“The industry has cut back on employees. Most people went down by two full time workers,” Ms Shepherd said.

“Reverting to casual staff is not ideal for anyone. We (growers) have to train them and hope they are available when they’re needed, and the workers don’t have a commitment of full time employment.”

A recent survey of small businesses by the Chamber of Commerce and Industry Queensland found rising power prices would increase costs to consumers and reduce profits for one third of the sector, while 14 per cent reduce staff and 6pc would go out of businesses.

Australian Farm Institute executive director Mick Keogh said the power price impact on intensive energy users, like dairy, citrus, other irrigators and processors was far more significant than broadacre agriculture, where power bills typically amount to 1pc to 2pc cent of total business costs.

“There is a serious risk for agriculture in regional areas of stranded assets, with enormous implications for local employment,” Mr Keogh said.

Queensland Dairy Farmers Organisation vice president Ross McInnes runs 500 milkers with his two brothers at the family’s Harrisville property.

“Electricity cost increases were absolutely dramatic over the past 10 years. And one of the worst things about it is we can’t find anyone in authority to say what the future holds,” said Mr McInnes, who is chairman of Queensland Farmers Federation water and energy committee.

The cost of off-peak power rose 358pc in South East Queensland in the past nine years. Running a motor for a high pressured pump jumped from less than $3 an hour to more than $9/hr, Mr McInnes said.

The Palaszczuk government committed $10 million to extend its Energy Savers Plus program, designed to assist farmers achieve energy costs savings.

Queensland Farmers Federation president Stuart Armitage said the announcement was a welcome but it was “still not the answer we’re looking for”.

The resources sector has entered a downturn while the increasing prospects for agriculture, which employs more than 300,000 people in Queensland, demanded policy to remove cost impacts.

“The problem is, we aren’t any hope of keeping up with the rising cost of energy,” he said.

According to the ACCC’s recent report, electricity prices rose on average 63pc in the past ten years.

It found residential and especially industrial have seen prices double, or even triple where there is limited competition for tenders.

According to the Australian Energy Regulator in Queensland between 2012-13 and 2015-16 an average of 462 small business disconnected each year from regional retailer Ergon.

In the first three quarters of 2016-17 there have already been 556 already disconnections. Across the state, there has been an average of more than 1900 small business disconnections across the same period.

Queensland producers are currently on transitional tariff structures, following market deregulation in 2016. Government plans to introduce new tariffs from 2019 that charge electricity users based on peak rate of usage, rather than overall take or what is often a consumption tariff.

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