The harsh cost-of-living crisis: One Aussie faces a 900K power bill jump
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The financial pressure that many families across Australia are facing is becoming increasingly unbearable. To make things worse, those struggling to keep up with their bills can now expect to witness further price hikes.
In a bracing reminder of the harsh impact of the cost-of-living crisis Aussies are facing, a third-generation family business is about to be slapped with a $900,000 power bill increase.
Nippy's is a family business that provides juice and milk to Aussies from three different manufacturing sites in South Australia.
On the current three-year electricity plan, the business pays $916,000 a year — but that’s all about to end.
The latest quote has come back with a whopping $1.7 million per year electricity contract – an increase of a staggering 95 per cent.
Joint Managing Director at Nippy’s, Ben Knispel said it was a complete shock to receive news of the bill jump.
‘It’s scary. Our current bill is a three-year contract so we have the current year to try and work out if we can find another offer,’ Mr Knispel told reporters.
On top of the electricity increases, the cost of their main product and the milk from the farms has increased by 25 per cent in the last 18 months.
Aside from the burden of having to find an extra $900,000 to pay for their electricity bill, the business is also worried about passing on the costs to customers to stay afloat.
‘I’m nervous about how much customers are willing to pay,’ he said before admitting that the business will have ‘no choice’ but to pass on the costs.
‘We’ll have to find the money somewhere and unfortunately, some of it will come from another price rise,’ Mr Knispel explained.
Nippy’s story is a grim reminder of inflation and its effects on Australian households and businesses. The staggering cost of energy bills could put a strain on tight budgets and force home-grown shops to make cutbacks or even close their doors permanently.
However, Liberal MP Tony Pasin said that ‘it is inevitable’ that the costs businesses are slapped with will be passed on to the consumer.
He also mentioned that prices are going to keep rising.
‘When people go to the grocery store, they’re not getting far down the aisle before they run out of cash,’ Mr Pasin declared.
Naturally, this may drive away customers from Australian businesses. He warned that Australian manufacturers need to be careful, because ‘ultimately people will look for alternatives’, such as products made in other countries. Some items imported from other countries may be free of taxes and charges, which may be why they are cheaper.
‘Australians are going to find themselves in a situation where they can’t buy Aussie grown, Aussie made. That would be a travesty,’ Mr Pasin explained.
It comes as inflation has hit a historic high at 7.8 per cent during the last quarter of 2022, as reported by the Australian Bureau of Statistics (ABS). The ABS said that the figure marked the fastest annual rise of inflation since March 1990, and well above the Reserve Bank of Australia’s (RBA) 2 to 3 per cent target.
Not only that but it was reported that the spike in prices was also fuelled by rising transport and housing costs. As well as the spill-over effects of the Ukraine invasion, which pushed up crude oil prices to as high as 13.2 per cent in the early part of 2022.
But there may be good news on the horizon, as Aussie households are expected to save $230 on their electricity bills in the next financial year.
According to Treasury analysis of ASX data in December, wholesale electricity prices for 2023 fell by 44 per cent in Queensland, compared with prices in November 2022. Meanwhile, prices fell by 38 per cent in New South Wales, 32 per cent in South Australia, and 29 per cent in Victoria.
This came after the Albanese government introduced a $1.5 billion energy price relief package late last year, which temporarily capped gas prices at $12 per gigajoule and coal prices at $125 per tonne.
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In a bracing reminder of the harsh impact of the cost-of-living crisis Aussies are facing, a third-generation family business is about to be slapped with a $900,000 power bill increase.
Nippy's is a family business that provides juice and milk to Aussies from three different manufacturing sites in South Australia.
On the current three-year electricity plan, the business pays $916,000 a year — but that’s all about to end.
Nippy’s was hit with a 95 per cent increase in their energy bill. Credit: Nippy’s
The latest quote has come back with a whopping $1.7 million per year electricity contract – an increase of a staggering 95 per cent.
Joint Managing Director at Nippy’s, Ben Knispel said it was a complete shock to receive news of the bill jump.
‘It’s scary. Our current bill is a three-year contract so we have the current year to try and work out if we can find another offer,’ Mr Knispel told reporters.
On top of the electricity increases, the cost of their main product and the milk from the farms has increased by 25 per cent in the last 18 months.
Aside from the burden of having to find an extra $900,000 to pay for their electricity bill, the business is also worried about passing on the costs to customers to stay afloat.
The family-run store is worried about the spill-over effects of its electricity plan. Credit: Mikhail Nilov/Pexels
‘I’m nervous about how much customers are willing to pay,’ he said before admitting that the business will have ‘no choice’ but to pass on the costs.
‘We’ll have to find the money somewhere and unfortunately, some of it will come from another price rise,’ Mr Knispel explained.
Nippy’s story is a grim reminder of inflation and its effects on Australian households and businesses. The staggering cost of energy bills could put a strain on tight budgets and force home-grown shops to make cutbacks or even close their doors permanently.
However, Liberal MP Tony Pasin said that ‘it is inevitable’ that the costs businesses are slapped with will be passed on to the consumer.
He also mentioned that prices are going to keep rising.
‘When people go to the grocery store, they’re not getting far down the aisle before they run out of cash,’ Mr Pasin declared.
Naturally, this may drive away customers from Australian businesses. He warned that Australian manufacturers need to be careful, because ‘ultimately people will look for alternatives’, such as products made in other countries. Some items imported from other countries may be free of taxes and charges, which may be why they are cheaper.
‘Australians are going to find themselves in a situation where they can’t buy Aussie grown, Aussie made. That would be a travesty,’ Mr Pasin explained.
It comes as inflation has hit a historic high at 7.8 per cent during the last quarter of 2022, as reported by the Australian Bureau of Statistics (ABS). The ABS said that the figure marked the fastest annual rise of inflation since March 1990, and well above the Reserve Bank of Australia’s (RBA) 2 to 3 per cent target.
Not only that but it was reported that the spike in prices was also fuelled by rising transport and housing costs. As well as the spill-over effects of the Ukraine invasion, which pushed up crude oil prices to as high as 13.2 per cent in the early part of 2022.
But there may be good news on the horizon, as Aussie households are expected to save $230 on their electricity bills in the next financial year.
According to Treasury analysis of ASX data in December, wholesale electricity prices for 2023 fell by 44 per cent in Queensland, compared with prices in November 2022. Meanwhile, prices fell by 38 per cent in New South Wales, 32 per cent in South Australia, and 29 per cent in Victoria.
This came after the Albanese government introduced a $1.5 billion energy price relief package late last year, which temporarily capped gas prices at $12 per gigajoule and coal prices at $125 per tonne.
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