Action on energy prices urged after ACCC release report

| July 12, 2018

The Australian Small Business and Family Enterprise Ombudsman has welcomed the ACCC’s retail electricity pricing report and urged state, territory and Australian governments to act on the recommendations that impact small businesses.

“An annual saving of 24% to 26% on electricity for any small business is significant,” Ombudsman Kate Carnell said. “It might literally save a business from closing or having to ‘let go’ staff.

“There are a number of realistic and achievable recommendations in the report that would support Australian small businesses.

“Offering a standard ‘default’ price, determined by the Australian Energy Regulator, would allow transparency for small businesses to compare deals and choose the best plan for their circumstances.

“At the moment, over 20% of small businesses are on high ‘standing’ offers, so moving to standard ‘default’ would save them up to $2,250 each year.

“We welcome the recommendation that consumer benefits are expanded to include small businesses, for example, streamlined price reporting.

“It is also vital that small businesses get the right tailored information and advice for their energy needs, and adequate funding for an effective awareness raising campaign is essential.

“Change is urgently needed and we hope these recommendations will be accepted and implemented this year.”

The Council of Small Business Australia also congratulated the Chairman of the ACCC Rod Sims and his staff for a thorough and constructive report coming from their inquiry into the power crisis in Australia.

Peter Strong, CEO of COSBOA, noted “the report shows just how complexity and a lack of transparency can create uncertainty and increased costs for the business community.  The recommendations from the report show that small business people may decrease their power costs by almost a quarter which, in anyone’s language, is a substantial amount.”

COSBOA’s members are concerned that the costs of power have taken away any gains made from tax cuts and inhibited companies from growing, employing more people and writing business plans with confidence.

Certainty and the removal of complexity is vital if business people are to make the best-informed decision for their business needs. Less complexity is essential if we are to have continued innovation, lower unemployment and a good economy.

Mr Strong added “the report helps develop certainty as it gives credence to the National Energy Guarantee (NEG) with the important warning that the NEG includes safeguards to ensure that any new obligations on retailers does not deliver advantages to larger players.

We are aware that the Energy Security Board has recognised this risk in the development of the NEG and has sought to address it through mechanisms that will be built into the design of the policy. COSBOA and its members supports the incorporation of NEG safeguards to improve liquidity and encourage transparency. It must be supported by our politicians.”