Soaring power prices a threat to SMEs

SMEs are at risk of being crippled by soaring power costs and instability in energy supply levels, according to the Australian Small Business and Family Enterprise Ombudsman.

“Business as usual is no longer an option. Business as usual is lack of reliable power and exponential price increases,” says Ombudsman Kate Carnell.

“If Parliament obfuscates and refuses to get behind [the] Finkel [report on energy], it will cause small business closures and job losses, it’s that simple.”

Ms Carnell attacked both the federal government and the opposition for politicking on the issue rather than working with the energy industry to find a practical, sustainable solution to secure the nation’s energy supplies at manageable costs.

“What we’ve seen up until now is a perception from both sides that there are more political brownie points in shooting down the other side than there is in coming up with a solution,” she says.

“The most important issue here is that support from all sides of politics for Finkel gives investment confidence.

“These investments are long-term. You don’t invest in power for two, three or five years.”

The warning comes just days after widespread criticism of the decision by major energy companies AGL and EnergyAustralia to increase gas and electricity prices by up to 20 per cent in the eastern states as well as South Australia.

Such large increases will reportedly see household energy bills rise by hundreds – if not thousands – of dollars per year, with businesses likely to feel even more pain.

Utility prices has been a major contributor to cost concerns for SMEs in recent months in particular. MYOB's 2017 Business Monitor found that of those businesses reporting a fall in revenue in the previous year, nearly half (46 per cent) attributed their greatest cost pressure to utilities.

Also worrying is the fact that businesses in South Australia reported feeling the greatest pinch from energy costs (44 per cent), at a time when the state is expected to be one of the hardest hit in the latest round of price increases.

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