Surging power costs are hurting Victorian manufacturers

BUSINESSES are being stung with power price rises of up to 200 per cent in a crisis that is stunting jobs growth and the crippling impact has been revealed in new research.

The crippling impact of soaring energy prices is revealed in research carried out on behalf of councils in Melbourne’s southeastern suburbs.

BUSINESSES are being stung with power price rises of up to 200 per cent in a crisis that is stunting jobs growth.

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Massive cost increases have forced some Victorian manufacturers to delay hiring workers and shelve expansion plans and equipment investment.

The crippling impact of soaring energy prices is revealed in research carried out on behalf of councils in Melbourne’s southeastern suburbs.

Victorian Chamberof Commerce and Industry chief executive Mark Stone. Picture: Alex Coppel

“Jobs and livelihoods are on the line,” South East Melbourne chair Simon McKeon warned. “We urge all sides of politics at all levels to find solutions as a matter of urgency.”

One firm said: “We’ve put off hiring and have not replaced people who left. We’ve also shelved projects and not ­ordered new equipment.”

Some businesses had installed energy-efficient fittings and machinery to mitigate the impact, only to be hit with price rises from suppliers also enduring higher energy costs.

Dozens of small, medium and large businesses in the region, which employs more than 90,000 manufacturing workers, were contacted.

Victorian Chamber of Commerce and Industry chief executive Mark Stone warned businesses were facing “unsustainable electricity price increases that threaten their competitiveness, and in some cases, ongoing operation”.

“This is damaging business confidence, investment and jobs,” Mr Stone said.

Massive cost increases have forced some Victorian manufacturers to delay hiring workers and shelve expansion plans and equipment investment.

An in-depth study of 19 respondents reported average electricity price rises of 25 per cent in the past year.

Two said their bills had almost doubled.

A few larger factories on fixed-price arrangements said energy providers had warned them to brace for a doubling or even tripling in costs upon contract renewal this year.

Australian Manufacturing Workers’ Union Victorian state secretary Steve Dargavel said local manufacturers were disadvantaged when they had to pay more for energy than international competitors.

“We used to have cheap power because it was run for the public, not profit for private companies,” he said.