Huge de­posit a pow­er­ful dis­in­cen­tive

Townsville Bulletin - - OPINION -

THE soaring cost of elec­tric­ity is a big is­sue for house­hold­ers and busi­ness peo­ple, par­tic­u­larly in North Queens­land.

While re­gional house­hold­ers and small busi­nesses are shielded to some ex­tent through reg­u­lated pric­ing and the pay­ment of sub­si­dies by the State Gov­ern­ment amount­ing to more than $ 600 mil­lion a year, our large busi­nesses pay a premium of 20 to 30 per cent com­pared with their coun­ter­parts in cen­tral and south Queens­land.

This is be­cause of trans­mis­sion costs as­so­ci­ated with the need to draw elec­tric­ity from power sta­tions so far away in cen­tral and south­ern Queens­land.

So it is some­thing of a rev­e­la­tion to learn that re­tailer Er­gon En­ergy is re­quir­ing se­cu­rity de­posits of as much as 37.5 per cent of a busi­ness’ es­ti­mated an­nual bill to con­nect new busi­nesses to the elec­tric­ity grid.

Townsville Cham­ber of Com­merce has raised the is­sue, say­ing busi­nesses have be­gun cit­ing the pol­icy as an im­ped­i­ment to start­ing trade, per­haps be­cause as the econ­omy im­proves op­por­tu­ni­ties for new busi­nesses only now are be­gin­ning to arise.

It might also be that un­der the pol­icy as elec­tric­ity prices rise, so too does the se­cu­rity de­posit.

Cer­tainly, de­posits amount­ing to $ 20,000 to con­nect premises for a small bakery, as our story re­veals to­day, are a lot of money to find for a new busi­ness among the myr­iad other ex­penses and red tape to over­come to be­gin trad­ing.

At a time when so many peo­ple are un­em­ployed and small busi­ness is ex­pected to pro­vide the ma­jor­ity of jobs that are so badly needed, huge elec­tric­ity se­cu­rity de­posits do not help.

It is ap­pro­pri­ate that Townsville- based State Gov­ern­ment Min­is­ter Co­ralee O’Rourke has at least ac­knowl­edged that th­ese are le­git­i­mate con­cerns.

Ms O’Rourke says she can un­der­stand it can be chal­leng­ing for small busi­nesses start­ing up and that the Gov­ern­ment doesn’t want to see them fac­ing un­nec­es­sary hur­dles.

But the real test will be whether Er­gon ac­tu­ally amends its pol­icy to take th­ese cir­cum­stances into ac­count.

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