The Abbott Government said the repeal of carbon tax, passed by the Senate today, should lower electricity and gas bills by 9 per cent and 7 per cent respectively.
PriceWaterhouseCooper’s Australia and Asia utilities leader Mark Coughlin said households should expect benefits of between $100 and $200 hundred a year as a result of the repeal, though the final figure would depend on the consumption of electricity and gas.
Despite community concern, Mr Coughlin said power companies would have no choice but to pass on all cuts.
“Community reputation is a very important for their business, so it's going to be in their very best interest that they pass on those savings or refunds and the repeal of the tax as quickly as they possibly can,” he said.
The ACCC says it will monitor electricity prices, but what will be harder to track is the other $300 worth of savings per year that the government has been promoting.
Any product or service across the economy which requires energy to produce, such as groceries to waste services, should be at least a few cents cheaper and contribute to a 0.7 per cent fall in inflation.
The Reserve Bank board considers the inflation rate when it makes its decision on interest rates every month, but it tends to look beyond one off movements in the consumer price index.
That means the official cash rate is likely remain steady for some time yet.
Welcome change for some
The fall in electricity costs will come as a relief for Camperdown Cellars managing director, Rip Viropoulos.
Mr Viropoulos said electricity is one of his biggest costs behind occupancy and wages.
He told SBS he tried to get ahead of the carbon tax by upgrading his equipment and fixtures as it was being introduced in 2012.
“We had a lot of halogen lights, there are over 200 in this building alone, and they were chewing 50 watts each,” he said.
“They’ve been reduced to about eight and all the fridges have been converted to LED as well so they went to about 58 watts to 15 watts or less so that's significant in itself.”
The upgrade cost tens of thousands of dollars and Mr Viropoulos said the investment was yet to pay off.
“Over time we hope to recoup most of that,” he said.