The Queensland Competition Authority’s (QCA) announcement that electricity prices for irrigated agriculture will increase by up to 5.1 per cent is another blow to the state’s farmers dealing with spiralling electricity bills.
The 5.1pc increase comes on the back of the state government’s intervention on the original QCA determination for a 10.3pc rise – yet another double digit annual increase. The government’s action proves that it can address electricity price increases, something it previously claimed cannot be controlled.
The intervention is welcome, but the government must do more; much more. Electricity price increases of at least 130pc in less than a decade, when CPI has only increased by 21pc over that period, have severely eroded farm business profitability and for some businesses, is challenging viability. For a small irrigated farm business paying around $20,000 per annum for electricity (just for irrigation), a 5pc increase still delivers a nasty price rise, with an additional $1000 per annum, and that is based on the current transitional tariffs which will be removed in 2020. For those farms using electricity continuously for refrigeration or animal welfare, the QCA announced determinations will result in price increases of over $10,000 per annum. How many companies can afford that magnitude of increase on a single input cost?
Governments seem to have failed to recognise that reduced farm business profitability has a direct correlation to less money being spent in regional communities, so the ‘multiplier effect’ is lost from those economies. The unjustifiable price increases continue to directly and indirectly impact the economic prosperity of regional Queensland, resulting in lost jobs and opportunities.
The QCA announcement revised determination merely reduces the size of the price hikes on farmers, it does not fix the systemic issue. The government has proven it can act so it is now time to make good on its promise to address electricity prices or face the reality that more Queensland farmers will simply leave the grid. Not only does this have a negative knock-on effect for those who remain connected, it accelerates the grid’s ‘death spiral’.
The Queensland Farmers’ Federation (QFF) remains willing and ready to work with all political parties to urgently resolve the issue of unsustainable and indefensible electricity price rises hurting our farmers and our rural and regional communities.
