The mercury has dipped, and the recent early morning chill has had Queenslanders reaching for their winter warmers. Townsville has experienced its coldest start to winter since 2012, temperatures have fallen in the Central Highlands and the Granite Belt has been blanketed by a thick layer of frost. Queenslanders have piled on the jumpers and jackets as winter shows its teeth and the cost of heating our homes well and truly bites.
While these cooler temperatures have arrived, so too has the latest damning report of the state of the Australian electricity system. The Australian Energy Market Commission’s (AEMC) 2018 National Retail Energy Competition Review identified that consumer confidence in energy retailers has dropped to new lows.
Only one in four consumers now say energy retailers are working in their long-term interests, down 10 per cent from last year. Satisfaction with value for money in the energy sector is now lower than the water, broadband, mobile and even banking sectors, which is saying something considering the banking royal commission. Small business satisfaction has been decreasing since 2016 and it is now at the lowest level since the AEMC’s annual reviews started.
Trust in the energy sector has dropped from 50pc in 2017 to 39pc in 2018. And while businesses have higher consumption on average than residential customers, their energy costs have risen materially on the past year with 36pc experiencing bill shock. With 100pc ownership of the networks, 65pc ownership of the generators and 100pc ownership of the regional retailer, the Queensland Government clearly has some work to do.
Last week’s 2018-19 State Budget said a lot about delivering a reliable electricity supply and driving down energy prices with dividends from Queensland’s electricity providers paying for various rebates and concessions. These electricity measures are positive for city customers – the AEMC reported the annual cost for electricity and gas increased across all jurisdictions, except south-east Queensland where it decreased by $70. Unfortunately, these measures do nothing to assist Queensland farmers and other regional businesses from unsustainable electricity price increases.
This ongoing ‘energy crisis’ continues to have real world implications for regional Queensland. According to the Australian Energy Regulator, there was an 82pc increase in the number of small businesses disconnected by Ergon Retail (regional Queensland’s monopoly network) last financial year. This comes as no surprise with some farmers on the receiving end of electricity cost increases of more than 200pc in 10 years – compared to 24pc inflation over that time. And based on current state government policy and tariff offerings, more is to come when tariffs specifically designed to meet the needs of irrigation and other farming activities are phased out by June 30, 2020. Without meaningful transition spending in the Budget, those farming businesses already struggling to cope with unsustainable electricity price increases and lagging productivity will be unable to continue operation when this occurs.
It is hoped that the establishment of the Agricultural Ministerial Advisory Council (AgMAC) this week will provide a forum to genuinely address critical competitiveness and productivity issues, including electricity affordability and its impact on effective water use. QFF looks forward to working with government through AgMAC, but the forum must be effective – the worst outcome would be if it is yet another talkfest that does not deliver solutions for Queensland farmers and regional businesses.