CLAIMS by the National Irrigators’ Council that profits made by energy network companies are $2.6 billion "higher than they should be" are a misrepresentation of facts, Energy Networks Australia CEO Andrew Dillon said today.
Mr Dillon said when network businesses earned profits above the allowed return set by the Australian Energy Regulator, it reflected efficiencies made in their operations, not more money out of customer pockets.
In fact, he said, under the incentive-based regulatory model, efficiency gains (reflected in higher than forecast profits) are returned to customers by way of reductions in prices.
“The regulator sets the allowed return and expenditures for most networks every five years,” Mr Dillon said.
“If a business is able to make savings by reducing operating costs, of course they will make more profit than forecast. But the regulator then in the next five-year period will return those profits to customers by setting lower benchmarks – which means lower network prices.
“This is a good thing for consumers as it serves as an incentive for businesses to become more and more efficient, which in turn keeps prices down.”
Mr Dillon said the poorly-understood nature of incentive based regulation and the frameworks that governed energy networks made it easy for facts and figures to be misrepresented.
“The worst thing that could happen from this type of fact-twisting is the introduction of rate of return regulation that has been tried and comprehensively failed overseas,” he said.
CONTRARY to Labor’s claims, its policies on negative gearing and capital gains tax will not increase the supply of new housing or create new jobs in the building industry according to new independent economic modelling commissioned by Master Builders Australia.
According to modelling prepared by Cadence Economics, if Labor’s policies are implemented it will mean Up to 42,000 less new dwellings being built across the country; up to 32,000 less full time jobs; up to $11.8 billion less building activity; and up to $210 million less renovation building activity.
"Labor’s policies on negative gearing and CGT fails its own test,” Denita Wawn, CEO of Master Builders Australia said.
“Master Builders calls on the ALP to rethink their policies in the light of this new research and a changed housing market. Australia cannot afford for housing supply, building activity and employment to go backwards,” she said.
“Cadence Economics was commissioned by Master Builders Australia to test Labor’s claims that its policy to restrict negative gearing to investments in new housing and halve the capital gains tax (CGT) discount to 25 percent all properties will increase the supply of new housing and employment in the building industry,” Ms Wawn said.
The results of the modelling show that within five years of Labor’s property tax policy being implemented the construction of new housing would fall in all states and territories and employment would fall over the same period.
Labor has previously stated its policies would boost new dwelling construction “by thousands of new homes each year".
“On the other hand independent modelling by Cadence Economics shows that Labor’s policy would mean up to 42,000 fewer new homes would be built over the five years following the implementation of Labor’s policies, resulting in a reduction in the value of residential building activity of between $2.8 billion and $11.8 billion,” Ms Wawn said.
“Home renovations would also be hit by an expected reduction of between $50 million to $210 million in activity over a five year period. Inevitably this would mean a fall in employment which is expected to be between 7,200 and 32,000 less jobs across the country,” she said.
“Finally, the context of Labor’s policies, namely an ‘overheated’ housing market no longer exists, bringing into question the need for reforms to curb investor activity,” Ms Wawn said.
THE House of Representatives Standing Committee on Health, Aged Care and Sport will be holding a roundtable public hearing in Canberra on Friday, 26 October 2018, as part of its Inquiry into the Aged Care Amendment (Staffing Ratio Disclosure) Bill 2018.
The Committee Chair, Trent Zimmerman MP, stated, "As part of this roundtable public hearing, the Committee will hear from aged care providers, government agencies, peak bodies, and professional nursing and medical associations. The inquiry is expected to provide the Committee with a range of perspectives on the Bill, including whether or not it should be passed and also highlight broader issues regarding levels of staffing for aged care services."
Further information about the Committee’s inquiry, including the public hearing program, is available on the Committee’s website.
THE Australian Renewable Energy Agency (ARENA) has today announced it will help build Australia’s first Business Renewables Centre to encourage Australian businesses to make the switch to renewable energy.
On behalf of the Australian Government, ARENA will provide $500,000 in funding to Climate-KIC Australia, WWF-Australia and UTS Institute for Sustainable Futures for the project.
The New South Wales and Victorian Governments have each provided $150,000 in funding to the Project.
The Business Renewables Centre Australia will be a resource centre and an online marketplace platform designed to accelerate the purchase of renewable energy by Australian business.
The $1.74 million project aims to make it easier for Australian corporates and local councils to purchase or procure renewable energy through corporate Power Purchase Agreements. The initiative will establish an online resource centre and a marketplace platform, and will be supported by face to face events for its industry members.
The goal is to help Australian businesses and local governments procure 1GW of installed renewable energy by 2022 and 5GW by 2030.
The Centre draws on the proven model of the Rocky Mountain Institute’s Business Renewables Centre in the USA, to provide members with information, a network of energy buyers and project developers, inexpensive training and advice on power purchase agreement requirements.
Last year, ARENA previously released a report on the Business of Renewables which outlined how Australia’s biggest businesses were falling behind their global peers in transitioning to renewable energy.
The report also found that Australian consumers support businesses making the switch, with more than three quarters of Australian consumers surveyed saying they would buy a product or service powered by renewables over one that wasn’t.
ARENA CEO Darren Miller said the Business Renewables Centre Australia would have a wealth of knowledge to draw upon.
“The future for energy is a large number of smaller renewable generating facilities often developed by non-generating entities. The Business Renewables Centre will help in that transition in using its vast expertise in running programs, entrepreneurship, innovation, education and other sustainability objectives to make it easier for companies and councils to enter into the renewables market,” Mr Miller said.
WWF Australia CEO Dermot O’Gorman said that the Business Renewables Centre Australia will build on the success of WWF’s Renewable Energy Buyers Forum, which now comprises over 230 members organisations, as well as the growth in corporate renewable Power Purchase Agreements in the last 12 months.
“The future of renewables in Australia looks positive because it makes sound business sense. Contracting for long-term renewable energy will save customers money and will support growth in renewable energy infrastructure across Australia,” Mr O'Gorman said.
Climate-KIC Australia CEO Christopher Lee said that the BRC would drive capacity building in the industry.
“We are excited to be collaborating with industry players from small and large scale renewable energy developers, service providers and corporate buyers to build capability across the industry and lower the cost of transactions. Our partners bring a broad breadth of experience and look forward to driving the uptake of renewables,” Mr Lee said.
Professor Stuart White, Director of the UTS Institute for Sustainable Futures said: “There’s a lot of interest in renewable energy PPAs, but they’re new to Australia and the key decision-makers often lack the information they need. We will be applying a model that’s been successful in the US to give companies the tools and resources they need to make the shift to renewable energy.”
THE ACCC will not oppose the proposed $6.6 million acquisition by Cabcharge Australia Limited (ASX:CAB) of Mobile Technologies International Pty Ltd (MTI).
MTI is the most widely used provider of taxi dispatch systems to taxi networks in Australia.
The ACCC found that it was unlikely that the acquisition would result in Cabcharge supplying inferior dispatch systems or withholding technology features from rival networks.
“Alternative dispatch system providers are available in Australia and the threat of network switching is likely to provide sufficient constraint on Cabcharge,” ACCC chair Rod Sims said.
The ACCC also investigated concerns that Cabcharge could put rivals at a competitive disadvantage by accessing the dispatch data of competing networks through the MTI system.
“Cabcharge is unlikely to be able to substantially lessen competition through any use of the data. Because of the threat of networks switching to alternative providers, we consider Cabcharge is unlikely to use the data to harm its competitors,” Mr Sims said.
The ACCC also considered whether Cabcharge could harm rival providers of taxi dispatch systems and payment systems by bundling the supply of the MTI dispatch system with its payment terminal.
“It is unlikely that Cabcharge would engage in anti-competitive bundling, as this would risk degrading its payment processing business. Further, drivers generally have another payment terminal available in their vehicles,” Mr Sims said.
Cabcharge is an ASX-listed company that provides services, including booking and dispatch services and taxi network services to its network-affiliated taxi operators and drivers.
Cabcharge does not have its own dispatch technology and uses MTI’s taxi dispatch system and equipment to provide booking and dispatch services to taxis in its network.
MTI is a privately owned Australian company that provides technology for the processing, management and distribution of bookings to the taxi industry.
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