Master butcher Pino Tomini Foresti expects the cost of refrigerating meat and small goods in his fridges,freezers and 15 coolrooms for his Kogarah butcher/cafe/restaurant business and Kingsgrove factory to skyrocket,forcing him to pass price increases on to customers who were already counting their pennies.
Master butcher Pino Tomini Foresti is facing a big hike in his energy bills.Flavio Brancaleone
“I see young families asking for something a little more economical to feed the family. People will start to feel it like they did when interest rates went up in the 80s,” he said.
Treasurer Jim Chalmers has warned households will be hit by a 56 per cent surge in energy bills in the coming two years - a 20 per cent price increase this financial year,on average.
That’s on top of a 15 per cent average increase in gas bills for residential customers and 26 per cent for small businesses already reported earlier this year by pricing regulator,IPART NSW. Electricity bills are already up 19 to 24 per cent for residential and 31 per cent to 34 per cent for small business customers.
The St Vincent de Paul Society has reported that households connected to gas and electricity in Sydney’s inner,Eastern and Northern suburbs experienced a $295 increase in annual energy costs from July this year. The cost increase for households in Western Sydney and the Blue Mountains was as high as $425.
The federal budget set a grim forecast for Australia but didn't provide many cost of living treats.
Muir Thomson,who runs a sheet metal manufacturing company in St Marys called Laser Wizard,said he would have to pass the increased power costs on to customers including students and small family businesses. His gas and electricity costs were about $215,000 in 2021 and were expected to increase by about $130,000 per year.
“It’s going to flow on,” he said. “Our business uses a lot of electricity.
“We have lasers and machinery that consume a lot of power ... cutting sheet metal and producing parts. All the products will increase in price. It’s going to be huge.”
Muir Thomson (left with glasses) and brother Lawrence Thomson own a business called Laser Wizard at St Marys.Photo supplied
Joel Gibson,from consumer network One Big Switch,said the energy price crisis should be a top priority for governments in Australia to avoid similar hardship faced in the UK as a result of the cost of living crisis.
“We now need a national summit to deal with this issue. If we don’t ring the bell now,we’ll have millions of Aussies who can’t afford to turn the lights on.”
Associate Professor Lynne Chester,an expert on electricity markets from the University of Sydney,said regulators had long been warning of the coming energy price hike. “It’s going to be horrific,” she said. “I would say there are going to be a lot of households that will start defaulting on mortgage repayments.”
Chester,who studied the impact of escalating energy costs on low-income households across Australia 10 years ago,said the pressure of higher power bills now extended to middle income households.
“It broke my heart as a researcher to hear what people were doing to pay their electricity bills,” she said. “Not filling their pharmaceutical scripts,going without food,so children could eat and selling possessions.”
Energy Consumers Australia chief executive Lynne Gallagher said helping consumers control their energy use would take pressure off the grid and lower the need for expensive network investment at a time when infrastructure costs were at record highs.
“Energy affordability affects us all,but for some in our community it is a painful choice between paying the
power bill and putting food on the table and that is only going to get worse in the year ahead without a lot
of hard work by government,together with consumers,” she said.
Business NSW Executive Director David Harding said the utility cost increases would have a particularly big impact on smaller businesses that were running on smaller margins.
Faced with the need to pay their power bills and staff on time,it was likely increased costs would be passed on to customers.
“We are only starting to see the start of the journey that the UK has been in a lot longer. It is going to be one of the biggest issues in town and probably rising to be a very big issue by the NSW election in March.”
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