SA premier wants rates, power price cuts

www.theaustralian.com.au
2 Oct 2012

A CUT in interest rates and lower power prices in South Australia could provide a "tipping point" to revive consumer confidence and the state's economy, Premier Jay Weatherill says. The premier says it is vital all banks pass on Tuesday's cut in official interest rates and has urged electricity retailers to proceed with price cuts for some consumers which have been earmarked for 2013.

"It's something they can do; it's something they should do and it's something that I demand of them", Mr Weatherill said. "These two initiatives taken together should send a positive message to South Australian consumers who have been incredibly cautious, and rightly so, because of the very uncertain economic environment that they face. "These two initiatives will provide some relief to consumers and we hope that this will stimulate renewed confidence which will not only benefit the South Australian economy but flow through to jobs and to small businesses".

The South Australian essential services commission has recommended a $160 a-year cut for about a quarter of the state's households and businesses from January. The cut will apply to all consumers on the standing contract with retailer AGL Energy, which is regulated by the commission. It won't apply to consumers on market contracts with AGL Energy or to those signed with other retailers, unless retailers respond to the government's call. Welfare groups and the Greens have hailed the price cut, which MP Mark Parnell said was driven by the greater use of renewable energy, including wind and solar.

"Finally, sanity has prevailed", Mr Parnell said. "We have the lowest wholesale electricity prices in South Australia in eight years, yet the retail price has continued to soar". Business SA chief executive Nigel McBride said the cut in interest rates of a quarter of a percentage point had come at the ideal time. "Consumers need the confidence to get out and start spending again in the lead-up to the important Christmas trading period", Mr McBride said.