New measures were introduced by prime minister Scott Morrison and energy minister Angus Taylor in October aimed at helping Aussies save between $273 to $832 a year on expensive energy bills.
And with retail energy prices soaring 99 per cent in the last decade, the NSW government has released a free tool to help residents save hundreds.
But it won’t just be everyday Aussies who feel the pain: new economic modelling from the United States Studies Centre (USSC) shows that high energy prices will also have serious consequences for the national economy.
How much will it cost?
Economic modelling reveals that a permanent 10 per cent increase on both gas and electricity would see the Australian GDP hit by 0.46 per cent, or $8.5 billion.
And that’s conservative modelling: an increase of 25 per cent would see a permanent GDP reduction of 1.15 per cent, or a whopping $21.2 billion.
How does that work out?
Energy is involved in keeping the wheels turning for many of Australia’s major industries, such as manufacturing, chemical, plastic, rubber, fertiliser, mining and metals processing, and food and beverage manufacturing.
“Increases in energy prices therefore increase overall costs for virtually the entire economy,” said the USSC report.
Not only that, but energy price increases then push up the prices of consumption goods – like energy bills – as well as other goods and services that use electricity as an input.
Both effects reduce real wages, household incomes and overall living standards.
Who will be affected?
Businesses with higher energy bills pass on these costs to other businesses, or in other instances, down to the consumers themselves.
Industries will be affected as well, but not all are made equal: some will suffer more than others, with energy-intensive, trade-exposed sectors such as those mentioned above likely to be hit hardest.
“As the exchange rate, wages, prices and other variables change in response to the shock across the economy, some sectors win, whilst others lose,” the report said.
“But the overall economic effect is clear: energy price increases impose significant costs on the Australian economy.”
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