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Energy security needs national leadership

Rising power costs are felt by everyone. But the impact they have on small businesses can have follow-on effects which hurt the community – and economy – even further.

Indeed, energy security and affordability has been a key focus of the Victorian Chamber of Commerce and Industry’s policy and advocacy activities this year. Our members tell us their businesses face unsustainable energy price increases that are threatening their competitiveness and, in some cases, their ongoing operation.

The Victorian Chamber’s recent Survey of Business Trends and Prospects found 37 per cent of respondents were experiencing significant energy price increases over the past year. The pressure is being felt hardest across manufacturing, building and tourism.

" Around one in five Victorian businesses said they would pass on increased energy costs to consumers." Mark Stone

Around one in five Victorian businesses said they would pass on increased energy costs to consumers, while 40 per cent said they would absorb cost rises in their operations.

National need

As many of our members are struggling to plan their growth into the future, the Victorian Chamber is calling for a national energy policy.

This policy should address the energy supply and pricing issues because currently businesses cannot predict the increased costs they will face and can only imagine the worst.

While it is refreshing that all sides of politics see energy policy as a bipartisan issue, they must come together now to address it.

We need a long-term national plan agreed and committed to by all governments to ensure businesses have access to secure and affordable energy supplies.

Rising gas prices are being driven by significant exports of natural gas out of Queensland that are placing pressure on the supply of gas for local markets.

Meanwhile, electricity prices are being pushed up by the lack of investment in new electricity supply, the closure of a number of large coal fired generators, including Victoria’s Hazelwood Power Station, and the high price of gas being used to generate electricity to make up the shortfall.

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Source: Victorian Chamber of Commerce and Industry, Survey of Business Trends and Prospects, March Quarter 2017

What should businesses be doing to manage the impacts of rising power prices?

  • Know when their current energy supply contracts expire.
  • Seek quotes and advice well in advance of current contracts expiring, to strengthen their negotiating position.
  • Seek multiple quotes at the same time, as they may only be valid for a few days.
  • Look at ways to cut energy use by auditing usage.
  • Consider investing in subsidised energy efficiency upgrades through the Victorian Energy Upgrades program.
  • Develop a plan to manage higher energy prices.
  • Explore Victorian Government support for businesses impacted by rising energy prices.

Energy is expected to be one of the hot topics at the Victorian Chamber’s flagship policy event this year, the Victoria Summit 2017. The event at Parliament House will feature more than 100 of Victoria’s business leaders.

The summit is just one of the many ways that the Victorian Chamber, as the peak body for business in Victoria, is representing and supporting our members to manage and grow their businesses.

Mark Stone AM is Chief Executive at the Victorian Chamber of Commerce and Industry

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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