Electricity bills have many small business owners ducking for cover.
Electricity bills have many small business owners ducking for cover. Contributed

$11.6m program to aid small business power bills

AFFORDABLE and reliable energy is crucial to the survival of a small business that may be powering air conditioners, fans, machinery, cool rooms, industrial fridges and lighting, some of them around the clock. 

However, a lack of clarity over pricing and other changes have "left us with a mess", according to Council of Small Business of Australia (COSBOA) chair Peter Strong. 

Among the key findings of a COSBOA national snapshot of nearly 200 small business owners, released in January this year, are:   

  • 78 per cent of businesses have seen their energy costs increase in the past two years.
  • The rise in energy prices is damaging small businesses, significantly reducing their profitability, affecting their cash flow, restricting their capital expenditure and in some cases requiring them to cut staff hours.
  • More than 50 per cent rented their premises, meaning far fewer energy saving measures were available to them compared with businesses that owned their properties.
  • Small business owners reported feeling high levels of stress and anxiety about future energy bills.
  • 85 per cent of respondents said they would struggle to absorb any future energy price rises, and one in eight businesses surveyed were already unable to pay their energy bills.

"Increased electricity prices are forcing small business owners to rethink their future," Mr Strong said last September, on the release of the draft report.

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Small business minister Michaelia Cash acknowledged that power prices "are stopping small businesses from investing, expanding and employing more people".

"Government pressure on retailers has already resulted in lower power bills by up to 10 per cent from January 1, 2019 for more small and medium businesses on standing offers in New South Wales, Victoria, South East Queensland and South Australia," Ms Cash said.

Welcome to our Business Class series.
Welcome to our Business Class series. News Corp

"We have also announced the Business Energy Advice Program, which will help small businesses find the best energy deal and identify opportunities for them to use energy more efficiently. 

"We know that small businesses tend to have limited bargaining power to lower their prices, and limited resources to identify and implement energy efficiency measures."

The minister said the $11.6 million program will open for tender shortly.

Energy Minister Angus Taylor said that for "too long energy retailers have been taking advantage of ... customers' loyalty by massively increasing their electricity prices. The government has demanded customers be put first and today ... customers are getting a better deal...".

Mr Taylor said the government had also asked the Australian Energy Regulator to develop a reference bill to be implemented by July 1: "[It] will provide a clear benchmark against which ... businesses can compare their own bills with ease. It will serve as a safety net to ensure customers get a fair deal."

Ahead of Labor's energy policy release last November, opposition leader Bill Shorten said the government's lack of clarity on energy and climate policy was "the number one driver of the spiralling power prices in this country", and promised investment in "new power generation" if elected.

Small businessman Nick Gleeson, who owns with his wife Ruby the Factory Espresso cafe and comedy venue in Orange in regional NSW, said that power prices were a significant cost, but not his greatest concern. He said that to avoid bill shock they put aside money each week for energy bills. 

News Corp Australia


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