24 Mar 2012 - Australian electricity prices most expensive

Today I was reading an article on The Age website, relating to the cost of doing business in certain countries around the world. Overall the article was about how Australia is currently, for a variety of reasons, a very expensive place to do business. However the thing that interested me most, was that Australia has been assessed as having the highest prices for electricity than any of the other major economy in the world. This got me to thinking about our electricity prices, and I came to the same conclusion about the high prices of electricity as I did about the high prices of mobile phone services in Australia. Many people I have spoken to, who have lived in different countries, compare our high prices for mobile phones, electricity and other similar services, and wonder why America or the United Kingdom have better mobile phone deals or lower utilities costs than Australia. Most of these conversations are about the unfairness of the high prices and how Australian companies need to get their issues sorted, and start offering better deals. 

My thoughts are that many of these companies are doing the best that they can in the Australian operating environment, comparing Australia to America is far from fair. If you consider that the costs for setting up a service, across a geographical distance, in Australia would be similar to those when setting up a service in America, however, once they have spent this money in America they have access to a population of over 300 million people, as oppose to a population of around 22 million in Australia. This is around 13 times more potential customers in America, and we expect them to offer the same range of services at the same price here is Australia with 13 times less potential customers. The same would be true of electricity prices, now I am not saying that there is nothing that can be done to lower prices and that companies aren't making large profits, but people have to keep in mind that we are a country the geographical size of America, with 13 times less the population. So companies investing in Australia have less potential revenue, for a similar investment cost, which in turn means that prices will be higher in Australia.