28 Oct 2018

Morrison and Taylor are touting huge potential savings in typical annual household power bills




'Big stick' energy plan is bad

 politics as well as bad policy

Edited by S.W.T.Read



by Ben Potter


"Never interrupt your enemy when he is making a mistake," Napoleon Bonaparte is supposed to have said.

Labor leader Bill Shorten and energy spokesman Mark Butler can't believe their luck. Morrison bends the truth in plain sight.

The package of energy measures unveiled by Prime Minister Scott Morrison and energy minister Angus Taylor plays with a number of myths and distortions about power and energy.

For example, they've distorted the Australian Competition and Consumer Commission's findings and recommendations to justify the measures and achieve the claimed savings.

The government is touting huge but unrepresentative savings from its proposed"default offer" for retail electricity. 

Here are some of the most glaring myths and distortions on show.

So called 'Big stick' equals huge savings

Morrison and Taylor are touting huge potential savings in typical annual household power bills from forcing power retailers to use regulated "default offers" - from $369 in southeast Queensland and $411 in NSW to $652 in Victoria and a massive $832 in South Australia.

The reality as described by the ACCC in its retail Electricity Pricing Inquiry—Final Report is a lot less exciting.

Here are some of the most glaring myths and distortions on show.

Buried away on page 368 of the report are the ACCC's findings on typical annual savings that households on standing offers can reap from switching to the new regulated "default" offer.

They range from $105-$106 in NSW and South East Queensland to $140 in SA and $165 in Victoria.

But because only a fraction of customers are still "loyal" enough to be on standing offers, the average savings per retail customer from the default offer are even smaller - $11 in Victoria, $17 in SA and $22 - $24 in NSW and SE Queensland.

Total average savings from retail price reductions range from $26 in Victoria and $37 in NSW to $42 in SA and $62 in Queensland. 

In other words, a few coffees worth a year. There's no question that power companies have moved too slowly to shift customers off standing offers. But huge retail savings aren't on the table for most.

Buried away on page 368 of the report are the ACCC's findings on typical annual savings that households on standing offers can reap from switching to the new regulated "default" offer.


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