Power firms give in to PM’s threat – $280 off but we’re still paying too much

A “loyalty tax” of up to $280 a year will be automatically wiped from southeast Queensland power bills from today but the Morrison Government has declared consumers are still paying too much.

A “LOYALTY tax” of up to $280 a year will be automatically wiped from southeast Queensland power bills from today but the Morrison Government has declared households are still paying too much.

After threats from Prime Minister Scott Morrison, big energy companies across Australia have buckled and will give discounts to customers of between 5 and 20 per cent.

Energy Minister Angus Taylor at Parliament House in Canberra.

Thousands of families and small businesses will get a discount on their standing offer from today. The ongoing savings are over the life of an annual bill.

It will be welcome relief for many households, who face Christmas credit card hangovers, looming school fees and a hot summer cooled by pools and air conditioners.

When consumers sign on with a power company, they are usually lured by a good deal. However, when that deal expires, customers are often rolled over to a more expensive, standing offer.

Lower-income households and the time poor usually do not change from their standing offer and are often paying hundreds of dollars more than more savvy neighbours.

A household using 5000kWh a year in the southeast corner will save $70 if they have been on a standing offer with AGL for more than 12 months; receive a discount of about $130 from Origin; save $210 if Energy Australia customers are concession holders; save $180 from Red and Lumo and $280 if they buy their power from Alinta.Energy Minister Angus Taylor said the savings were directly because of Government pressure on energy retailers. “For too long energy retailers have been taking advantage of these customers’ loyalty by massively increasing their electricity prices,’’ he said.

Southeast Queensland energy coonsumers should see up to $280 wiped off their power bills. Picture: James Ross/AAP

“The Government has demanded customers be put first and today loyalty tax customers are getting a better deal, including concession customers who need it most.

“While the Government welcomes the action taken by the energy retailers, there is more to be done.”

It is understood the Government believes households in southeast Queensland should be getting another $90 off their standing offer.

It comes as the Government has asked the Australian Energy Regulator to develop a reference bill that helps families and business compare their own bills.

Mr Taylor said the Government was also “driving changes” to end the “shameful practice” of dodgy late-payment fees”. “An average customer can end up paying $600 more a year just because they struggle to pay their electricity bill on time.”