Electricity price increase leaves Tasmanians out in the cold

Fruit Growers Tasmania | Tuesday, 27 June 2023, 2.00pm

The decision by the Tasmania Government last week to increase electricity prices by 9.5 per cent under a banner that “Tasmanians are paying among the lowest power prices in the nation” is cold comfort to Tasmanians and Tasmanian businesses across the state.

Fruit Growers Tasmania warn a 9.5 per cent increase in our electricity prices just doesn’t make good economic sense.

“It’s short-sighted and quite frankly, lazy. As an island state, with a small population, in the coldest part of the country and separated by one of the most expensive pieces of water in the world, it’s a great place to call home and operate a business, but it’s expensive to do both,” said Fruit Growers Tasmania CEO, Peter Cornish.

“In the middle of a cost-of-living crisis, the Tasmanian Government has full control over electricity prices and could make a real difference. But with inflation at 7 per cent, the Tasmanian Government has decided to increase electricity prices by 9.5 per cent. Which will in fact increase inflation putting further pressure on Tasmanians and Tasmanian businesses,” he added.

Tasmanian governments of the past invested in hydro power schemes to provide reliable and inexpensive electricity to attract people to come to live and work in Tasmania and companies to invest in the State. It should be no different now.

“Electricity is a big cost to businesses with price increases for many Tasmanian businesses on electricity contracts, well above 9.5 per cent. But if Tasmania was known for lower electricity prices for business, it would become a selling point for companies to relocate or expand here. And on top of that, we are in the enviable position to be able to offer 100% renewable electricity,” said Mr Cornish.

The independent Tasmanian Economic Regulator sets the maximum electricity price, but it doesn’t set the actual electricity price. Electricity prices are set by the Tasmanian Government, not the Regulator.

Fruit Growers Tasmania believes there is no plausible justification for electricity prices increasing by 9.5 per cent. The cost of production hasn’t gone up by that much. The reason our electricity prices are going up is that the Tasmanian Government is effectively taxing users through electricity pricing. As Guy Barnett stated in March, the returns from electricity are “providing a financial return to Tasmanians, allowing us to reinvest in health, education and other essential services.”

“Let’s call it what it is, it’s a tax! Fruit Growers Tasmania is instead calling on the Government to provide lower electricity prices so companies can invest more, expand production, employ more people, pay more tax, and help fund those essential services we all want. Perhaps this could be the “renewable energy dividend payment for all Tasmanians” that the Premier mentioned in his State of the State address earlier this year,” said Mr Cornish.

For the Tasmanian fruit industry, Tasmania’s renewable electricity supply and pricing should be a competitive advantage, not a disadvantage. From every perspective, lower electricity prices would provide an advantage to Tasmania’s fruit industry.

It would be an advantage for the 10,000 people needed each year to work in our industry and live in our state.
It would be an advantage to help with the cost-of-living pressures of the 500,000 Tasmanians, most of whom are our customers.
It would be an advantage for apple growers who produce apples that store better than anywhere else in the country. To lower the cost of the electricity to power those cool stores would enable customers around the country to enjoy Tasmanian apples all year round.
It would be an advantage to the packhouses that sort, pack and store our berries, cherries, stone fruit, and pears. And to the pumps that power our irrigation, and the processors that convert our fruit into juice, cider, and other value-added products.

Mr Cornish concluded, “It’s not cheap to live, work and operate in Tasmania, but we produce the very best and offer a fresh, vibrant taste experience like few other places in the world. Here flavour lasts, but so must the competitiveness of our industry.

“Our renewable electricity pricing should be one of Tasmania’s competitive advantages. We really need our government to stop forcing Tasmanians out in the cold and embrace one of this state’s true advantages – affordable, renewable, clean energy.

“It’s time for a change of heart and a better approach to electricity pricing. It’s time to give Tasmanians the “renewable energy dividend” they deserve. And that’s a price increase well below inflation.”