Regional business hit by energy price rise
Thursday 6 April 2017
Rising gas and electricity prices are a massive challenge facing our regional businesses this year.
With the closure of Hazelwood Power Station on March 31 and no baseload power alternative from the Andrews Government, it’s only going to get worse.
The closure of Hazelwood is the result Daniel Andrews always wanted.
In an act of economic vandalism Labor tripled the coal tax, effectively forcing the closure of Hazelwood and the loss of 22 per cent of Victoria’s electricity production capacity.
On the outskirts of Kyabram, in my electorate of Murray Plains, Wayne, Peter and David Mulcahy run a successful dairy farm and processing facility.
KyValley Dairy employs 100 local people and processes about a million litres of milk per week, which makes its way down the processing line onto the kitchen tables of families across Australia, and the world.
But the Andrews Government’s failure to secure adequate baseload electricity or gas supplies in the face of Hazelwood closing has left the Mulcahy family with a difficult choice.
The dairy’s energy bills rose nearly $50,000 this year, an increase of about 23 per cent.
Wayne recently told The Australian: “We either shut the whole factory down and put 100 people out of work, or we just pay it. We have no alternative”.
The experience of the Mulcahy family is not isolated. Businesses across Victoria are feeling the burden of increasing energy prices.
Victorian Wool Processors, Kagome Foods, Cobram Coldstores, Burra Foods, particle board manufacturer D & R Henderson and Patties Foods have all recently taken their energy bills to the media too, trying to impress upon the Andrews Government the enormity of the risk to business and jobs.
It’s not just agricultural businesses that are feeling the pinch.
Dairies, food processors, cool stores and abattoirs are just some examples of energy-intensive businesses, but that list also includes hospitality businesses, laundries, all kinds of manufacturers and more. When cheaper gas and electricity supplies cannot be negotiated, staff find themselves facing redundancy or businesses closing down altogether.
The fact that Victorian businesses are already considering reducing staff or shutting down due to gas and electricity prices is a warning that the Andrews Labor Government can’t ignore.
Yet as thousands of businesses across Victoria consider rising energy prices in the lead up to the next financial year, the Premier is MIA and refusing to admit that his Government’s policies are driving up energy prices and hurting our regional businesses.
With the historic closure of Hazelwood on March 31, the Australian Energy Market Operator (AEMO) has predicted Victoria will have an energy reserve shortfall of 72 days this coming summer.
The Andrews Labor government will have no choice but to act to prevent the lights going out next summer, but the stark reality is that it may be all too late by then for some of Victoria’s regional businesses and, sadly, for thousands of jobs and the communities they support.
Peter Walsh is Leader of The Victorian Nationals and Shadow Minister for Agriculture