Page 13 - National Poultry Newspaper

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The true cost of electricity
THE royal commission into misconduct in the banking, superannuation and financial services industry has laid bare the finance sector’s litany of misdeeds, with reports of mismanagement, un- scrupulous, insidious and sometimes illegal practices.
In the wake of damag- ing revelations during the banking royal commis- sion, you would think it is only a matter of time before the calls for greater transparency and account- ability of the energy sec- tor are acted on.
The Winners and Losers of the Monopoly Game report, commissioned by QFF industry member CANEGROWERS, ex- amines the profitability of Queensland’s electric- ity networks and reveals similar unconscionable conduct and rorting by these government-owned corporations.
The report demonstrates the Queensland networks’ prices are over twice the efficient level, making them extraordinarily prof- itable and achieving three to four times the annual profit margins of compa- rable energy companies.
Thinking back to the finance sector royal com- mission, consider that over the 15-year period to 2014, the Queensland Government’s returns from the GOC Powerlink amounted to 10 times the returns achieved by the National Australia Bank.
Looking at other sec- tors, these returns were 23, 15.5 and 10.5 times greater than Lend Lease, Telstra and BHP, respec- tively.
Over the past three years, for every dollar that Queensland energy con- sumers paid for network charges, the Queensland Government collected 47 cents in profits.
Despite those extraordi- nary returns, successive governments have con- sistently extracted more profits from the networks
than they create.
Another questionable
practice is the extraction of competitive neutrality fees.
Despite Queensland’s transmission and distribu- tion networks being 100 percent government-owned with no private competi- tion, the Queensland Gov- ernment charges them competitive neutrality fees to ensure they do not have a competitive advantage, which are then passed on to the consumer.
Another recently re- leased report by the Grat- tan Institute into the cost of the Australian electric- ity networks also high- lights a broken energy system.
The independent think- tank’s report provides some useful analysis of one of the systemic prob- lems with why the cost of electricity in this state is too high – the regulated asset base.
The RAB is important because its size largely determines network costs for consumers, and its growth has far outstripped both potential use (capac- ity) and actual use.
Poor government deci- sions have driven exces- sive investment in the net- works.
The institute estimates that over the past decade, Queensland’s network assets per customer grew from under $8000 to almost $14,000 (in real
terms) – the highest in the nation.
The institute recom- mended the Queensland Government write down the RABs of the distribu- tion networks by up to $7.19 billion, or about 25 percent.
Whileencouraging,QFF contends that this figure is too low, as numerous reviews have identified that reducing the RABs to efficient levels would require write-downs of at least 50 percent.
While none of these ac- tions are illegal, they cer- tainly point to ‘gaming’ the system – not the type of behaviour that taxpay- ers expect from GOCs providing an essential service.
For Queensland farmers, the result has been unsus- tainable electricity price increases.
Some farmers have been on the receiving end of electricity cost increases of more than 200 percent in 10 years – compared to 24 percent inflation over that time.
A nd more is to come when tariffs specifical- ly designed to meet the needs of irrigation and other specific farming ac- tivities are phased out by June 30, 2020.
This ongoing ‘energy crisis’ continues to have real-world implications for Queensland farmers and other regional busi- nesses.
According to the Austral- ian Energy Regulator, there was an 82 percent increase in the number of small businesses disconnected by Ergon Retail (regional Queensland’s monopoly network) last financial year.
Governments should treat electricity as the ba- sic, fundamental need it is–notasacashcowat the expense of our sector’s international competitive- ness and future prosperity. About Queensland Farmers’ Federation
The Queensland Farm- ers’ Federation as it exists today was formally estab- lished in 1992 with the ex- press purpose of provid- ing a single voice for the diverse agricultural indus- tries that operate across Queensland, so they could more effectively advocate for sector-wide issues with a unity of purpose.
The creation of QFF saw the unification of the Council of Agriculture (1922-1992), which was made up of 18 former stat- utory agriculture bodies, and the Queensland Pro- ducers’ Federation (1969- 1989), which was a broad coalition of agricultural commodity groups.
In 2008, the Queensland Irrigators’ Council also became part of the fed- eration.
Currently bringing to- gether 15 peak state and national agriculture indus- try organisations and the state’s irrigation groups, QFF collectively repre- sents more than 13,000 primary producers across Queensland, including chicken growers and egg producers.
As the unified voice of intensive agriculture, QFF engages in a broad range of economic, social, en- vironmental and regional issues.
Unsustainable electric- ity price increases are an issue that has challenged the profitability, and in some cases the viability, of most QFF members, including the poultry in- dustry.
Australian farmers get world-first access to latest agvet chemicals
AUSTRALIAN farm- ers are the first in the world to access new agricultural and veterinary chemical technologies following approval from the Aus- tralian Pesticides and Veterinary Medicines Authority for afidopy- ropen and duddingto- nia flagrans.
APVMA chief ex- ecutive officer Dr Chris Parker said the registra- tions provide Australia’s agricultural industries with enhanced access to safe and effective pest management tools for use in vegetable, cotton and livestock production.
“There is strong de- mand for new crop pro-
tection and animal medi- cines to be made avail- able in Australia and it’s important that the APV- MA delivers a regulatory service that is responsive to market demands and can support innovation in our agricultural sector,” Dr Parker said.
“Australia is the first nation to register afi- dopyropen, which is an insecticide to aid in the control of aphids and sil- verleaf whitefly in cot- ton and vegetables.
“The APVMA is also the first regulator to ap- prove duddingtonia fla- grans, a biological pre- sent as a palatable feed supplement used to treat parasitic gastrointestinal
nematodes of grazing animals.
“We strive to be a world leader in agvet chemical regulation, and being first to register these new products is a step in the right direc- tion that will encourage further investment from agvet chemical manu- facturers to register safe products that advance Australia’s agricultural productivity and animal health.”
The APVMA com- pleted the assessments for both product applica- tions in a timely manner, undertaking a rigorous scientific assessment that involved chemistry, residues, health, envi-
ronmental and efficacy assessments.
The product manufact- urers are awaiting deci- sions on registration for the same products in a range of other markets globally.
Details of the active constituent afidopyropen in Versys Insecticide and duddingtonia flagrans in BioWorma and Livamol with BioWorma prod- ucts can be found on the APVMA’s public data- base of registered chemi- cals at portal.apvma.gov. au/pubcris
Learn more about the APVMA’s regulatory framework for the ap- proval of active constitu- ents at apvma.gov.au
www.poultrynews.com.au
National Poultry Newspaper, May 2018 – Page 13