Queensland rural lobby groups say electricity price hikes of more than 10 per cent this year will spell doom for the agriculture sector.
Canegrowers and Cotton Australia have slammed the determination from the Queensland Competition Authority (QCA) for a 12.3 per cent hike in transitional tariffs from July 1.
“The spiralling cost of electricity to run pumps to water farming land has becoming an untenable outlay,” Canegrowers CEO Dan Galligan said.
“Farmers are fed up with this situation. Our voices and concerns have been ignored.”
Transitional tariffs, which are commonly used by irrigators, have risen dramatically over the past decade as the QCA moved to a more cost-reflective pricing model.
While admitting the price jump was more significant than he would have liked, Queensland Energy Minister Mark Bailey defended his Government’s role.
“I submitted to the QCA for a better outcome and they didn’t accept my submission,” he said.
“I’m always very supportive of the business sector but in the end, it’s a QCA recommendation.”
In fact, Mr Bailey argued there had been greater price stabilisation since the Palaszczuk Government came to office last year.
“Well, last year it was of course zero per cent [price rise], so if you look at the last two years for transitional and obsolete tariffs, it’s about a 5.5 per cent increase over the two years,” he said.
“I understand it’s challenging for transitional and obsolete tariff users.
“These tariffs are being subsidised by the taxpayer; we are supplying power to them at below the cost of supply.”
However, that was of little comfort to Mr Galligan.
“We are absolutely fed up with successive ministers suggesting it’s better now that it was under a previous government,” Mr Galligan said.
Farm groups call for price cut
Canegrowers has been lobbying for a reduction in electricity prices for the past four years, including a plan for a 33 per cent cut which it claimed would be cost neutral to the Government due to increased demand.
Mr Bailey maintained that he was yet to see any financial modelling to support such an “optimistic position”.
“It’s hard for me to make a judgement when I don’t have that before me,” he explained.
“If they want to present evidence and modelling that shows it’s cost neutral, we will look at that closely.
“But to be quite frank, I do have my doubts that a 33 per cent price drop could possibility be cost neutral.”
Mr Galligan said Canegrowers had made numerous submissions calling for a new irrigation-specific tariff but it needed the Government and regional electricity distributor Ergon Energy to agree to further analysis.
“We can’t model it without the data associated with the usage of electricity; we need the minister to say ‘ok, let’s give this a go’,” Mr Galligan said.
Price rises will hurt farm production
Cotton growers are also heavy users of irrigation and have been campaigning for tariff reform.
“We’re just sick and tired of the excuses that keep coming through,” Cotton Australia general manager Michael Murray said.
“What we’ve seen over the last decade is just year on year of double digit price rises.
“And it doesn’t seem to matter what party, what government … nobody seems to want to bite the bullet and reform electricity prices.”
The Far North Queensland Electricity Users Network said the price rises would be detrimental to all small businesses.
“Small business will be laying-off people, closing down, reducing hours, reducing expenditure,” network coordinator Jennifer Brownie said.
“If you wanted to slow down regional Queensland, I can’t think of a better way to do it.
“They’re blaming these charges on higher network and energy costs; let’s have a look at who owns the network in Queensland.
“A hundred per cent of the transmission and distribution network is owned by the Queensland Government.
“It is a cash cow for the Queensland Government.”
Figures from the QCA suggested a typical small business could expect an 11 per cent increase on their electricity bill next financial year.