Geelong manufacturers are sweating on the Turnbull Government’s plan for power supplies as energy prices continue placing a “great drain” on local operators, according to their representative body.
Geelong Manufacturing Council’s David Peart named energy prices ahead of skills shortages as sources of pressure on local manufacturing, employing more than 10,000 workers locally.
“Similar to manufacturers outside of our region, the industry remains under pressure, awaiting outcomes of the National Energy Guarantee, as energy prices are providing a great drain and challenge on business profitability, impacting on growth,” Mr Peart told the Indy yesterday.
His comments followed a series of stories in the Indy last year about power prices threatening the viability of local businesses.
Australian Industry Group warned in November that the rising prices could cost Geelong 2500 manufacturing jobs. The group’s national police advisor, Tennant Reed, said energy pricing was a “life and death issue” for a quarter of Australia’s manufacturers.
Viva Energy last year forecast power price rises of more than half, or $25 million annually, for its Geelong refinery but a source said the bill could instead double to up to $100m, jeopardising 700 jobs.
The manufacturing sector is Geelong’s third largest employer and produces the city’s highest economic output, according to Enterprise Geelong statistics. The sector produced $9.6 billion a year, more than a third of Geelong’s $26.2 billion annual economic output.
But Geelong Chamber of Commerce, with more than 900 members, said in November that higher power costs were hurting beyond local manufacturers.
“A lot of our members have raised concerns from the point of view of their day-to-day operations,” said chamber chief Bernadette Uzelac.
The concerns come as the Turnbull Government develops its National Energy Guarantee, effectively the government’s policy on power supply to force down prices. The guarantee will affect energy providers and large-scale users in a bid to improve reliability while meeting the government’s targets for carbon dioxide emissions.
Despite the rising power costs, Mr Peart said “most” Geelong manufacturers were experiencing growth.
Geelong was reflecting a “trend” exposed in new figures revealing a record 14 consecutive months of growth in Victorian manufacturing, he said.
“Across the wider membership base we are experiencing stability and growth conditions in the manufacturing sector in the Geelong region, adding to the confidence and momentum that has been building over the past year”.
“Since 2017 local manufacturers in most local industry sectors reported growth in output, capital expenditure and new jobs.
“The expansion of Avalon Airport for international flights, ongoing export success in carbon manufacturing and the strong innovation drive of our local manufacturers will attribute to further growth for the Geelong region.”
The reported return to growth in Geelong manufacturing follows major setbacks in previous years, including the closure of Ford’s factory at North Geelong and the end of Alcoa’s aluminium production on Pt Henry.
