Disappointing political response to energy cost issue



 THE strongest community response to a recent issue of concern raised by Brighton Council has been the comments I have received regarding the dramatic increases cost of energy for businesses and householders over recent years.

In early February, I raised concerns at the impact of these high costs on one of our local businesses, Polyfoam Australia Pty Ltd, that provides direct employment for 16 people at Bridgewater and many more jobs through contractors and buying local goods and services. The Bridgewater plant is the most modern and efficient of the company’s multiple plants around Australia, yet its energy costs are substantially higher – up to 258 percent above those of Polyfoam’s Melbourne factory.

Polyfoam supplies polystyrene containers and material for the aquaculture, agriculture, building construction and medical sectors

The irony is that in 2007 Polyfoam moved its Tasmanian operations from Franklin in the Huon, to Bridgewater to take advantage of the availability of ‘cheaper’ natural gas to fuel its operations. Now, the high cost of energy is forcing the company to seriously consider whether it should continue manufacturing in this State. A comparison of the company’s energy costs for Tasmania and Victoria makes stark reading. As of August last year, the cost of gas at Bridgewater was $19.57 a gigajoule and Melbourne just $7.59 a gigajoule. Comparable electricity charges were $0.1288 a kilowatt hour in Melbourne and $0.2264 a kilowatt hour for the Bridgewater plant.

The only advice available from the Government was to contact the Department of Economic Development to see if financial assistance could be provided to install a bio-fuel boiler. This is effectively an admission from the Government that gas and electricity prices are too high and businesses are being advised to explore other options.

Yet when questioned over the Ployfoam issue, all Premier Lara Giddings is reported as saying is that Tasmania’s energy costs are competitive with the rest of Australia and Opposition energy spokesman Matthew Groom said the removal of the carbon tax by the Commonwealth Government would redress the situation.

Well I beg to differ. Gas prices in Tasmania over two and a half times greater than in Victoria and electricity charges nearly double those interstate are not ‘competitive’ and removing the carbon tax at best will only lower energy costs a fraction. Any reduction will be the same in Tasmania, Victoria and the rest of Australia.

Polyfoam is just one example of the impact of high energy costs. I am sure there are countless other businesses suffering and every Tasmanian household knows how much more they are now paying for the electricity and gas than they were a few years ago. It is a sad reality that some people cannot even afford to run heaters in winter because of high electricity charges.

We are now in an election climate and I believe it is irresponsible to call for exorbitant promises when Tasmania is facing serious economic, employment and budget challenges. But we deserve better than ‘energy costs are competitive’ and ‘removal of the carbon tax will solve all problems’ responses from the Government and the alternative Government party.

The early part of the State election campaign has concentrated on issues such as the NBN, which is in fact a Federal responsibility, and the issues of real concern to Tasmanians and where the State has responsibility have been ignored. Like health and education, the cost of energy, the operations of the State-owned electricity authorities and the profits taken from them by Government are issues that should be at the forefront.

Energy costs impact on every Tasmanian household and they impact on our businesses that provide employment for Tasmanians and the prices they charge us for their goods and services. Let’s hope that the final weeks of the campaign see this issue addressed and solutions develop that result in Polyfoam and all Tasmanians paying energy costs that are actually competitive and comparable to those paid by the rest of Australia.


Tony Foster