Small businesses struggling with rising electricity prices can look forward to some relief following price cuts from some of Australia’s leading energy providers this month.
Government pressure has resulted in energy retailers lowering their standard offer prices, meaning thousands of Australian families and small business owners will receive an automatic discount of up to 15 per cent off their electricity bill.
According to one of Australia’s leading energy comparison services, Make It Cheaper, 85 per cent of Australian Small and Medium-sized Enterprises are overspending on their electricity with many small business slugged with a ‘loyalty tax’ if they don’t compare prices.
However, Federal Minister for Energy Angus Taylor said the government had introduced measures to drive down electricity prices.
As of July 1, the Australian Energy Regulator will introduce a default price, which is expected to save small businesses thousands of dollars off their energy bills.
Mr Taylor said this default pricing would get rid of the ‘loyalty tax’.
“This means that when your contract with your energy company comes to an end, or you want to negotiate a better deal sooner with your energy company, the default price will be your guide,” he said.
“Median standing offers in NSW can be up to $411 per year more expensive than the cheapest market offer for households and up to $2,582 per year more for small businesses.
“I know people are struggling with rising power prices. Negotiating with energy companies can be time-consuming and confusing.”
“Our plan will take the pressure off families and small businesses, and put customers back in charge,” Mr Taylor said.
The Government’s measures to drive down power prices include:
- Stop the price gouging by big energy companies by banning sneaky late payment penalties, requiring them to pass on savings in wholesale prices to customers and strengthening the regulator’s power to crack down on dodgy, anti-competitive practices.
- Create a price safety net (default price) to protect customers and remove the ‘loyalty tax’ on those who have stayed with their energy company or don’t have time to shop around.
- Back investment in reliable generation which, over the longer term, will improve competition, lower prices and guarantee reliable supply. The Government will support projects that reduce wholesale electricity prices, support the reliability of the grid and increase competition.
- Support reliable power by requiring energy companies to sign contracts guaranteeing enough energy to meet demand.
Make It Cheaper found that SME’s still had massive potential to save big just by comparing multiple energy offers and the Government’s Business Energy Advice Program will help small businesses find the best energy deal.
The $11.6 million program is currently open for tender for organisations interested in supporting small businesses switch energy providers.