Joint media release with the Treasurer the Hon Josh Frydenberg MP
The cost of electricity for households and businesses continues to fall across much of eastern Australia, thanks to strong action from the Morrison Government.
The Australian Competition and Consumer Commission (ACCC), in the fourth report of its ongoing inquiry into the National Electricity Market, has found the Government’s Default Market Offer has led to customers on standing offers paying less for their electricity.
Treasurer Josh Frydenberg said the ACCC analysed data from 8.5 million bills and found the Default Market Offer has led to cheaper prices.
“The ACCC report underlines the Government’s initiatives are delivering a fair deal on electricity for households and businesses , particularly as Australia recovers from the impacts of the COVID 19 pandemic,” the Treasurer said.
“The ACCC has found the median price for standing offer customers across Victoria, New South Wales, South Australia and south east Queensland between 2018 and 2019 fell by 4.4 per cent for households, and by 7.5 per cent for small businesses.”
Minister for Energy and Emissions Reduction Angus Taylor said the Government introduced the Default Market Offer in July 2019 to protect loyal customers on standing offer contracts from paying excessively high prices, and around 800,000 Australian households and businesses have benefited from this action.
“Earlier this year, the Government acted to expand the protections provided by the Default Market Offer to cover people and small businesses with solar systems, and on flexible or time-of use tariffs,” Minister Taylor said.
“The Default Market Offer has clearly helped to lower electricity prices, and not just for standing offer customers, with the average market offer price falling by up to 7.6 per cent for residential customers, and 3.7 per cent for small businesses.
“Importantly, the Default Market Offer also acts as a reference price, making it easier for consumers to make an apples-for-apples comparison of prices and offers from different electricity retailers.
“There are great benefits in shopping around for a competitive deal, with the ACCC finding typical residential customers could save up to $219 by switching to the median market offer, while typical small businesses could save $424 a year.
“The Government’s free energy comparison website, energymadeeasy.gov.au compares all available offers in the region and is an excellent resource for families and small businesses to find the best deal for their energy needs.
“The findings of the ACCC demonstrate our policies are creating real savings for Australians, and we will continue to deliver reforms across the electricity market that put downward pressure on prices and ensure families and businesses have access to affordable, reliable power.”
In addition to the Default Market Offer, the Government has taken a range of actions to ensure Australians have access to cheaper and more reliable electricity, including:
- Introducing the ‘Big Stick’ legislation to deal with misconduct in the electricity sector and ensure retailers pass on reductions in wholesale prices to consumers;
- Getting rid of sneaky late payment penalties imposed by energy retailers;
- The Underwriting New Generation Investments program to improve competition and reduce wholesale prices;
- Establishing a new $1 billion Grid Reliability Fund to support investment in new energy generation, storage and transmission infrastructure;
- Extending the Consumer Data Right to energy, to make it easier for consumers to switch provider to get a better deal; and
- Extending the ACCC’s gas sector inquiry for a further five years to ensure energy companies continue to be held to account.
The ACCC’s fourth report into the NEM is available on the ACCC website.