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No clear line yet on power prices charging ahead

Date

National security correspondent

View more articles from David Wroe

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JOHN Watson, owner of the Copper Lantern Motel in Rosebud, expected his power bills to rise by about 10 per cent under the carbon price, which was the amount forecast by the government for household increases.

Last month he discovered the figure was considerably more than that. His provider has put a 2¢ carbon charge per kilowatt hour on top of his electricity charges. Because he is on a bargain tariff and his guests consume a lot of cheap, off-peak electricity, Mr Watson's latest bill rose about 24 per cent.

''That's $320 a month I no longer have, and it's meant I've had to cut the hours of my casual cleaner,'' he said after expressing his frustration in writing to his local MP, the federal Coalition's Greg Hunt.

One hundred days since the introduction of the carbon tax, power bill rises are a visible impact.

One hundred days since the introduction of the carbon tax, power bill rises are a visible impact. Photo: Reuters

One hundred days since the Gillard government introduced its carbon price, power bill rises are a visible and indubitable impact.

As for the rest of the dire predictions, from Barnaby Joyce's $100 roasts to Tony Abbott's forecast that the steel town of Whyalla would be ''wiped off the map'' - they are refusing to come true.

The prices of beef and lamb have fallen since June, according to Meat & Livestock Australia. A 1.7-kilogram leg of lamb from Woolworths online was last week going for just over $18.

Meanwhile, Whyalla's main employer, Arrium, previously OneSteel, has been the target of an Asian takeover bid - a vote of confidence in Australia's steel industry. The town, according to independent mayor Jim Pollock, is ''kicking goals''.

Countrywide, the economic data is solid. The Westpac-Melbourne Institute consumer sentiment index climbed from 95.6 points in June to 98.2 in September. Unemployment has fallen from 5.3 per cent in June to 5.1 per cent in August. There are 2900 more Australians employed now than there were before the carbon price.

Finance firm TD Securities and the Melbourne Institute said last week they had ''still not noticed any broad-based impact of the 1 July introduction of carbon pricing spilling over into prices''.

Even the power price rises aren't always so bad. Another small business owner in Mr Hunt's electorate, Michael Carroll, who runs an injection moulding firm on the Mornington Peninsula, got a better result.

Told he faced a 47 per cent rise, he shopped around using a price comparison website. A different retailer offered him a favourable deal - his current rate locked in for three years. Though he is still wary, describing the carbon price as ''another nail in the coffin'' for the manufacturing sector, he says he's ''feeling a bit more confident'' about his own power costs.

The Gillard government is growing in its confidence that the electoral albatross around its neck just might shrink to a bearable weight.

But is it crowing too early when it says the hip-pocket pain Tony Abbott forecast has proved a mirage? There are probably still some price rises to come. Bill Lang, head of Small Business Australia, and Innes Willox, head of the Australian Industry Group, both say it will take a few power bill cycles for companies to be able to figure out what to pass on to their customers.

Mr Willox acknowledges many businesses ''had expectations they would be impacted harder than perhaps they have been''. But he adds: ''People are still feeling their way.''

That said, Michael Chua of the Melbourne Institute said he would have expected to see more price rises by now.

''We are into the third month of the carbon price. We should see this happening already.''

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