POWER OUTAGE: Storms cut power to hundreds of residents this morning.
POWER OUTAGE: Storms cut power to hundreds of residents this morning. John Farmer

Businesses fear energy price hikes

BUSINESSES could be forced to the wall if the Queensland Competition Authority allows large electricity price increases today, according to the state's peak business organisation.

A Chamber of Commerce and Industry Queensland spokesman said the business community was bracing itself for increases of between 10 and 20%.

"These price increases will threaten the viability of many Queensland businesses. We have already seen a range of Queensland business closures including Xstrata, WOW, Heinz, Geon, CTE's Industrial & Protective Clothing and Amcor," the spokesman said.

"The doubling in electricity prices over the past seven years has unquestionably been a significant influencer of these regrettable closures."

The spokesman said while these closures were well know there were many more that have "silently closed their doors".

"Official ABS data reveals that in 2011-12 there were 60,149 businesses that ceased to trade with a net reduction in the Queensland business population of 2,032 following business entries (of) 58,117.

"The Queensland businesses community is numb to the rhetoric and lack of genuine commitment to comprehensively reform the electricity sector in Queensland.

"Any suggestion that electricity price increases ranging between 10 per cent and 20 per cent are "reasonable" is disconnected from the reality of doing business."

The CCIQ's primary concern was for businesses for which electricity represented more than a quarter of their costs, however it was also concerned for other businesses for which such rises would be "the straw that broke the camel's back".

"The majority of businesses indicate that they have taken all action possible to reduce their electricity usage. These businesses are quite simply unable to further reduce their energy usage and in turn cost," the spokesman said.

"CCIQ firmly believes that electricity price increases have had a disproportionally higher impact on business than they have for the residential sector, primarily due to the scale of operations and level of energy use."

The CCIQ called for energy sector reforms including a focus on price stability rather than "gold plating" of infrastructure, better regulation to improve price competition and support and education for businesses for making long term business investment decisions.  

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