Rod Sims: SMEs will save up to 10% on energy bills following carbon tax repeal

Australian SMEs can expect to see their annual energy bills fall by as much as 10% as a result of the repeal of the carbon tax.

Speaking in Melbourne yesterday at the Energy Users Association of Australia annual conference, Australian Competition and Consumer Commission chairman Rod Sims said preliminary data collected by the competition watchdog shows SMEs can expect annual savings of between 5-10%, although the estimates differ between different states and territories.

SMEs in the Australian Capital Territory are expected to see the greatest reduction in their power bills, with savings pegged at between 9.3-9.5%, followed by Queensland businesses, which can expect to save between 8.5-9.1%.

Victorian SMEs can expect to save between 7.4-9.7% annually, those in New South Wales can expect to save between 7-8.3%, and those in South Australia are expected to see their bills fall by 5-6.3%.

Sims did not outline expected savings for SMEs in Western Australia, Tasmania and the Northern Territory.

While he said the expected savings are “significant”, Sims said the ACCC is still in the process of assessing data from energy retailers, with the preliminary figures calculated from data provided by AGL, Energy Australia and Origin.

It means the savings for SMEs could be potentially much higher.

“For larger users … however, the savings will be larger as your network costs are a small part of your energy bill,” Sims said.

“In some cases, the savings could be a multiple of those shown.”

Peter Strong, executive director of the Council of Small Business of Australia, told SmartCompany depending on a small business’ energy use, it could save anywhere between $1000 and $4000 based on these figures.

Strong says small supermarkets, convenience stores, hairdressers and cafes are among the SMEs who stand to save the most on their energy bills, but any saving will be welcomed by business owners.

‘We all use power,” he says. “Even if you were to save $400-500 a year, that’s still pleasing because in most cases, small businesses didn’t pass on the costs of the carbon tax to their consumers.”

“It’s money coming back to us.”

While Strong says he is yet to hear from small businesses which have seen their energy bills drop following the repeal of the carbon tax, he welcomed the move by the ACCC to release information about expected savings.

“I want to congratulate the ACCC for providing those figures,” he says.

“It’s what we say all the time: give us the information so we can understand what’s happening.”

Speaking more generally about the carbon tax repeal, Sims reinforced the ACCC’s previous warnings it will take action against any business that chose to pass on the costs of the tax to consumers but not the savings from the repeal.

“Our motto is: what went on should now come off,” he said.

“If a business, any business, passed through a carbon component in its prices during the carbon tax period, then the ACCC expects it to now pass back the costs savings from the repeal.”

Businesses must also be careful not to makes misleading representations in relation to the repeal, said Sims.

“We recently instituted court proceedings against synthetic greenhouse gas supplier Actrol Parts Pty Ltd for false or misleading representations including about the effect of the carbon tax on the way in,” he said.