ZB ZB
Live now
Start time
Playing for
End time
Listen live
Listen to NAME OF STATION
Up next
Listen live on
ZB

Andrew Dickens: Power prices aren't the problem, wages are

Author
Andrew Dickens,
Publish Date
Wed, 12 Sep 2018, 12:10PM
In a low wage, high accommodation and food cost economy, the power prices are the straw that breaks the poor’s backs. Photo / Getty Images
In a low wage, high accommodation and food cost economy, the power prices are the straw that breaks the poor’s backs. Photo / Getty Images

Andrew Dickens: Power prices aren't the problem, wages are

Author
Andrew Dickens,
Publish Date
Wed, 12 Sep 2018, 12:10PM

So the report into our electricity prices has been released and the pundits are pondering what it all means

Households are paying 79 percent more for their power than in 1990 after you take out inflation. Now that is both surprising and unsurprising at the same time. Obviously, the population now is much much bigger than it was nearly 30 years ago and name the new generation that came online in that time. Certainly little hydro-electric, so we have more demand and no more supply which will be a price pressure. Add to that the fact that we use more power today than we did back then. 

Appliances are on, heat pumps are all going. But then again appliances are also more efficient than they were in 1990. Apparently, this price inflation is greater than many other OECD nations, but the Electricity Price Review says the industry is not making excessive profits.

What is surprising is that we’ve opened the market up to competition and that is supposed to have driven prices down but many have not seen it.To that, the report reveals a concept they’ve called the two-tier market. Proactive consumers who shop around, do the research and churn back and forth from company to company are finding the savings, but many households are not doing that work. 

It may be apathy, it’s just too hard and time-consuming. It may be through ignorance or it may be through a lack of the where with all, the internet or the technical knowledge that can unlock the savings. And to be brutally honest that affects the poor and the elderly more.

The report found that 103,000 households nationwide spend more than 10 percent of their annual income on power, putting them in "energy hardship." The rest spend about 3 percent.

Paying the most are those on pre-pay plans, but that is a trick poor households use to ration their power use. Once the pre-pay runs out so does the heating.  Meanwhile the better off invest in solar power and better plans to get cheaper power. The rich keep getting richer and the poor stay trapped.

The elderly also struggle with high power prices. On a low fixed income with many not on the web they struggle to pay the bill. We’ve responded by giving them a power benefit, the Winter Energy Payment.

So with the report failing to vilify the power companies, you’re left with the inescapable conclusion that energy hardship is a symptom of some basic flaws in the way our country works.

In a low wage, high accommodation and food cost economy, the power prices are the straw that breaks the poor’s backs. In response, we put a band-aid of state handouts over the problems. Working For Families and the Winter Energy Payment. Band-aids fix nothing.

Power prices are not the problem. Lift the wages and lower the cost of housing and food and then our perceived power problems will be a thing of the past.

Take your Radio, Podcasts and Music with you