Electricity Prices

The Hon. J.S. LEE (15:15): I seek leave to make a brief explanation before asking the Minister for Manufacturing and Innovation a question about South Australia's electricity prices.

Leave granted.

The Hon. J.S. LEE: The Australian Energy Regulator State of Energy Market 2015 report contains significantly bad news for South Australia's business sector and for job seekers, as businesses are set to have high electricity prices this year. In a Financial Review article dated 15 December 2015 it was outlined that South Australian businesses will face electricity futures contract prices of $87 to $90 a megawatt hour from 2016, which is more than twice the Victorian future prices and nearly twice that of New South Wales.

Manufacturers Australia says that competitiveness of manufacturers is being eroded by rising power prices and unpredictable energy markets. It was reported in the Australian Financial Review that this is putting future investment at risk because big manufacturers invest on time horizons of between 10 to 20 years and need stable low prices that compete with offshore rivals. My questions are:

1. How does the minister intend to cushion South Australian industry from impacts of sharply increased electricity prices?

2. How will the minister ensure South Australia remains competitive with electricity prices in order to attract manufacturers?

3. What actions has the minister actually taken so far to lower the cost of electricity in South Australia?

The Hon. K.J. MAHER (Minister for Employment, Minister for Aboriginal Affairs and Reconciliation, Minister for Manufacturing and Innovation, Minister for Automotive Transformation, Minister for Science and Information Economy) (15:17): I thank the honourable member for her question and her interest in this area. The Minister for Energy in another place is the minister responsible for electricity, and I will see whether he has anything that can supplement the brief remarks I will make for the honourable member.

Energy prices are one of many input costs for businesses, particularly manufacturing businesses in South Australia. The government held an energy forum round table towards the end of last year, where various companies were able to share the ways they are mitigating costs of electricity to make South Australian businesses even more competitive. One major way to reduce the electricity price input for businesses is for greater interconnection between states, and I note the Heywood interconnector to Victoria is being heavily upgraded in the near future.