by Innes Willox, Chief Executive of the national employer association Ai Group
Published in The Age and The Sydney Morning Herald
Friday, 3 June 2022
Even though Australia is one of the world’s biggest energy producers, we face an immense energy affordability crisis from which nobody is immune.
Why? Power prices have surged in the face of global coal prices, driven by the Russian invasion of Ukraine. Outages at ageing Australian coal power generators have increased reliance on gas. Now gas prices are surging too, also driven by the war in Ukraine.
The situation is becoming chaotic, as price pressures drive smaller retailers from the markets. Even when this settles down, industry and households face years of high power and especially high gas prices.
Energy matters. Power and gas make up a significant part of household spending, especially for the most vulnerable. But they are also important inputs for the industries that supply the rest of Australians’ needs, from tinned tomatoes to bottled milk to bricks and beyond.
Given this is a global crisis that also afflicts our competitors, some businesses will be able to pass on higher costs to consumers. But others will be under dire pressure. Business failures and household pain loom.
So, what can be done?