Small businesses brace for looming power price hikes

Small businesses are itching to see details of an energy price relief plan with fears rising bills may need to be paid by increasing prices or reducing employment.

The Australian Energy Regulator on Wednesday released its draft default market offer decision for the 2023/24 financial year, which estimated a power price increase of up to 25.4 per cent – equal to $1,738 a year – from July 1. 

The default market offer represents the maximum price energy retailers can charge residential and small business customers in NSW, South Australia and southeast Queensland.

A final decision on the offers will be made in May.

The head of the peak body representing small businesses, COSBOA, told AAP owners would have to significantly manage costs in the upcoming months.

“Many small businesses are individuals in business, mum and dad businesses or family enterprises with one or two employees,” chair Matthew Addison said. 

“If energy becomes more expensive again then typically business owners work harder and are paid less. Many will consider closing.”

The government has flagged relief in the federal budget – to be handed down in May – through rebates.

Mr Addison said small business owners were holding out for these details and many had questions about how they would access price relief.  

But in the meantime, he said, the best support would come from customers. 

“Small businesses not only want to survive this period of rising costs but to also develop, employ more people and try to be innovative,” he said.

“We are looking for ongoing support from consumers … if we have activity from our consumers we are able to make money, keep the doors open and hopefully keep our prices down.” 

Australian Chamber of Commerce and Industry chief Andrew McKellar said the forecast energy price spike was a “hammer blow” to small businesses already facing increasing input costs.

He urged accelerated investment in renewable energy generation, storage and transmission to keep up with growing energy demands.

“A long-term solution focused on boosting production is absolutely essential to bring stability to the energy market,” he said.