Australian households and businesses are paying two to three times more for their energy than their American counterparts and if prices remain as they are, Australia will face serious economic consequences according to a new report from the United States Studies Centre (USSC). Data presented in the research also shows US energy is also more reliable, transparent in pricing and decreasing carbon emissions much faster than Australia.
“The genesis of this project lies in our 2017 work mapping the depth and value of the US-Australian investment relationship," USSC's CEO Professor Simon Jackman explained. "Manufacturers we spoke to repeatedly rated the United States as vastly more attractive for investment because of the relatively high cost of electricity and gas in Australia. For large, industrial consumers of energy, Australian prices are simply making us uncompetitive."
Written by economist Alex Robson, the report released today – supported by Dow Chemical and Chemistry Australia – will be the first in a multi-year energy project for the Centre, analysing key US and Australian energy policies, and flagging important policy pathways forward for Australia.
Dow Chemical Australia President and Managing Director Louis Vega welcomed the report and said it showed how, with an appropriate focus on developing the right policies, Australia can ensure its economy has enough resources to allow for both reliability and lower costs.
"Without a bold and concerted effort to deploy an energy policy for Australia, consumers will continue to see the incredible rise in costs and the terrible effects of those higher costs on jobs, economic growth and energy security," Mr Vega said.
"This study shows just how important legislative and policy action is in building a stable and functioning energy market. We repeat our call for a national energy plan and stand ready to share our experiences, data and knowledge to work with policymakers across Australia on the right plan for Australia, its citizens, environment and economy."
Chemistry Australia CEO Samantha Read said, based on scenarios presented in the report, further energy price increases may cause economic losses of up to $19 billion in the chemistry industry alone and put the $40 billion chemistry industry and its workforce at greater risk.
"The chemistry sector must have competitive energy supply and pricing to continue adding value to resources, employing Australians and supplying the economy," Ms Read said.
"This report reinforces, in the case of the United States, the significant benefits to industry, communities and households when a country chooses to get its energy policy right."
- Economic modelling indicates that a 25% increase in electricity generation prices and domestic gas prices costs more than 33,000 Australian jobs and 1.15% of GDP.
- Hawaii is the only US state with higher average household electricity prices than every Australian state and territory.
- Queensland industrial gas prices have risen 197% since 2008, as opposed to all US states, which have decreased.
- If Australia’s energy policy settings don't change, industry will be forced to either scale back production, investment and employment, relocate to states where gas is cheaper, move overseas, or simply shut down.
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