Opinion: Hey, Clueless of Canberra- Australian Energy Prices to Rise 62%

The words you won’t hear in any of the information about the rises provided to date are “cost efficiency”. It’s a matter of opinion whether IPART has been listening to any commercial overheads issues in Australian economics over the last 40 years, but the overall guess would be that it hasn’t.

Australian consumers and businesses, meanwhile, are apparently expected to open their wallets, forget about the already massive holes in their disposable income, and the recession and say “Moo!” as and when required. It’s not like these prices will ever go down again after the capital works have been conducted, either. This will be a cost structure set in stone, with increases based on it. Even for non retail buyers of energy, this is looking like an unholy vision of future possibilities for their bottom lines, too. That’ll be fun, as their costs knock on into the consumer and business mainstreams. With what, pray, are the merry denizens of Oz supposed to pay for this version of Snow White and the Seven Idiots? About half a month’s mortgage or credit line payments per year, sure, why would that be a problem? A few “Hi Hos”, and the subject is covered. Particularly the “Ho” part. The rate rise includes projected CPI rises. Australia has a system whereby consumer price index rises are legitimate reasons for cost hikes. The fact that such a huge increase is of itself likely to raise inflation apparently hasn’t occurred to IPART. This figures out as compound price increases for energy providers. Australia also has a hilarious innovation/party trick called the National Competition Policy, which is supposedly based to relate to actual commercial competition, not cartel pricing policies sanctioned by a regulator. If this price hike was conducted by the energy suppliers as a private deal, it’d be illegal as a breach of competition laws and possibly any requirements for corporate sanity. The price rises are supposed to be phased in over three years. That’s just long enough for a few groans, winces, and to find some cheap medication. It’s not long enough to figure out personal or business budgets. The fact that a large part of the Australian workforce will be retiring, and that the health care system and other big domestic energy users with already high cost bases aren’t about to suddenly vanish also has a bearing on this Utopian slopfest. When, and by whom, did the Australian public and business sector get declared charities? Every other living human thing in Australia is expected to pay for itself. If energy production capacity is too low, and has some fondly remembered aspects of the pit pony era, who’s supposed to be responsible for the efficiency of the energy sector? All looking great, so far. Imagine if you had a business where you were given a regulator’s blessing to raise your revenue, and not expected, let alone considered responsible, for funding your own capital expenditure like a normal business. Particularly if your business and technical models happen to be as fossilized as your fuels and production rates. Viability? What’s that, and what’s it doing in basic business training? Why would that be an issue in regulatory policy? Who would ever doubt the business methods of utilities which can’t fund their own basic core operations? What requirements have been placed on the energy suppliers to perform and provide additional capacity at good viable rates for end users? Why is energy becoming more expensive, not less expensive, which is a basic price model for proof of efficient competitive practices? Merry Christmas, someone.