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Alarmed by rising electricity prices?

admin — Wed, 06 Feb 2013 01:36:55 +0000

Electricity prices have been rising alarmingly over the past few years. It’s hard making sense of all the electricity companies all trying to win your business with amazing and complex sounding offers.
The 30% discount on offer may not be the best offer… you need to take into account the discount offered and the rates to really know how much you’re saving.
Locking in rates may seem good now, but could cost you big in the long run. Comparing your usage habits can help us to properly determine if locking in rates is right for you.
When you are choosing a better energy deal there are many different factors to compare to ensure you get a good deal. Daily usage, where you live, contract type, meter type and rates are just some of the items to compare… and the list goes on.
The good news is you can speak to one energy consultants for free now. Click here for a call back or speak to one of our Youcompare energy consultants for free on 1300 683 009.

2 tips for comparing electricity and gas deals

admin — Tue, 05 Feb 2013 05:25:32 +0000

Electricity prices have been rising alarmingly over the past few years. It’s hard on your own comparing electricity company’s offers, who are all trying to win your business with amazing and complex sounding deals.

Here’s three tips to help you to compare electricity deals:

Tip one – make sure you are comparing apples with apples.

That massive per cent discount on offer may not be the best deal for you… you must take into account the usage and supply rates on that deal; not just the enticing discount to really know how much you’re actually saving.

Tip two – compare energy usage before you lock in rates.

Locking in rates may seem good now, but could cost you big in the long run. Comparing your usage habits can help properly determine if locking in rates is right for you.

The good news is you can speak to one energy consultants for free now. Click here for a call back or speak to one of our energy consultants for free on 1300 683 009.

Private health premiums to rise 27 per cent

admin — Tue, 05 Feb 2013 04:14:08 +0000

Health insurance premiums are on the rise again… here’s an article from today’s Australian detailing what could happen in the coming months. Now is a better time than ever to compare health insurance policies against others in the market.

Read more: http://youcompare.com.au/blogs/wp-content/uploads/2012/11/health.png

ONE in seven Australians with private health insurance faces a premium increase of up to 27.5 per cent in July under planned changes to the government rebate, according to the industry lobby group.

In a submission to a parliamentary inquiry into the commonwealth’s plan to narrow the scope of the rebate, Private Healthcare Australia has warned that almost 1.1 million members will be adversely affected by changes to Lifetime Health Cover — some of them by up to $500 a year.

The impact of the decision to remove the rebate from Lifetime Health Cover loadings — which apply to those who delayed taking out insurance until later in life — is in addition to the annual premium increases that last year averaged 5 per cent.

That means some premiums are likely to rise by almost a third this year.

“This significant increase in premiums will inevitably result in many people choosing to downgrade health cover or terminate their cover, thereby relying more on the public hospital system for their healthcare needs,” the submission warns.

The Australian last month revealed the government would investigate the trend of people winding back their coverage to cope with rising premiums and also look at whether it should be easier to switch funds to find a better deal.

Delivering the mid-year budget review, Wayne Swan — at the time still vying to deliver a surplus — said the rebate changes would save the government $1.1 billion.

Read More: http://www.theaustralian.com.au/national-affairs/health/private-health-premiums-to-rise-27pc-lobby-warns/story-fn59nokw-1226570348037

How to avoid health insurance tax pain

admin — Tue, 15 Jan 2013 00:50:10 +0000

MILLIONS of Australians affected by new means testing of private health insurance rebates are facing a financial dilemma.

Do they tell their fund to reduce their monthly premiums now, or do they wait until tax time and take the hit then?

It’s a personal decision, but deferring the expense until later may benefit your household budget today.

About 2.4 million of Australia’s 12 million private health members will be means tested. It affects singles earning more than $84,000 and couples earning more than $168,000, and can add up to $1000 to an annual health cover bill.

H&R Block processes 700,000 tax returns each year, and regional director Frank Brass says there is no requirement to tell your insurer to increase your premiums to offset a smaller rebate.

“It’s a financial decision and it depends on how financial you are,” he says. “Some people would prefer to know upfront and not get a tax bill.”

The average tax refund in Australia has been about $1700, Brass says.

HLB Mann Judd partner Steven Toth says it’s best to have an idea of costs.

“If people are aware they have to pay, they need to make a provision for it,” he says.

“Assess what level of rebate you are allowed.”

Details about the means testing are available online at health.gov.au.

Health insurance giant Bupa eyeing foothold in public health

admin — Mon, 14 Jan 2013 22:41:29 +0000

HEALTH insurance giant Bupa is aspiring to be managing public hospitals in conjunction with government in Australia by 2020, as the company looks to extend its reach throughout the healthcare system.

The global group has also signalled a more aggressive approach to expanding its operations, which now include aged care, dental, optical and preventative health services, following the announcement of more than $500 million worth of acquisitions in the local market.

“The bottom line is, we’re not going to achieve the extent of our ambitions doing what we’re doing,” Bupa chief executive Stuart Fletcher told The Australian on a visit to Melbourne last week.

“We’re going to have to change the pace. We’re going to have to change the mindset, both within the leadership and the organisation at large, and we’re going to have to take more risks than perhaps we have in the past.”

Bupa has undergone a dramatic organisational restructure under Mr Fletcher, the former head of beverages group Diageo who admitted he knew little about healthcare when he stepped into the job in March last year.

However, within months he had consolidated the group’s management structure into five geographic regions, appointing a 20-year veteran of the company, Dean Holden, to run its Australian and New Zealand division.

While Australia’s small population typically renders it a peripheral market for most multinationals, the same cannot be said of its importance to Bupa. Australia and New Zealand is the group’s largest market unit by a significant margin. With more than 3.3 million policyholders in Australia alone, which constitutes about 27 per cent of the private health insurance market, the division generates about 40 per cent of the group’s earnings.

Skyrocketing electricity costs makes cotton-growers take stock

admin — Wed, 09 Jan 2013 00:34:45 +0000

THE state’s cotton industry has been savaged by energy costs that have up to tripled, says a submission to the Queensland Competition Authority.

The hikes come as a return to dry conditions in central Queensland has meant many cotton growers are abandoning their present crop just a year after heavy rains provided one of the best yields on record.

An indication of how the industry’s fortune has been turned upside down are the dam levels at St George, a prime cotton region in the state’s southwest, that have dropped to 30 per cent, according to Balonne Shire mayor Donna Stewart.

Cotton Australia said the changes to tariffs following the QCA draft determination would have a significant impact on growers who relied on electricity for irrigation pumps.

“Modelling shows that in a number of instances the impact will be in the order of 200 to 300 per cent increases,” Cotton Australia’s submission said.

It called for the State Government to commission a review to ensure irrigators had access to tariffs that matched their usage requirements and provided affordable electricity.

Increasing power costs are forcing many cotton growers to abandon their expensive electricity infrastructure and make the switch to diesel-powered pumps.

Price of the summer peak

admin — Mon, 07 Jan 2013 00:49:07 +0000

IN late November, summer began early for Victorians and South Australians. As temperatures soared past 35C in Adelaide and flirted with 40C in Melbourne, sweltering residents took refuge in the comfort of their air-conditioned homes.

On November 29, thousands of kilometres away on the central coast of NSW, one of the state’s energy generators, Delta Electricity, switched on its flagship gas-fired power plant to absorb some of the surging national demand.

Between 1995 and 1998, Australia’s state-based electricity markets merged (except for Western Australia’s, which is too far away) into the National Electricity Market, the world’s biggest interconnected power system, covering a distance of 4500km. Tasmania is a net energy exporter, while NSW is typically an importer.

Nearly 40m high, the equivalent to four jumbo jet engines huddled alongside each other, Delta Electricity’s $500 million gas-fired power station at Colongra is only turned on a few days a year, when daily demand surges past about 12,000 megawatts.

“The power station is up and running within half an hour,” says Delta chief executive Greg Everett, “whereas our coal power stations can take a day to warm up and are also much more expensive to build or buy.”

“Gas-fired power stations are the Linda Evangelistas of power supply,” says Matthew Warren, CEO of the Energy Supply Association, referring to the supermodel’s famous quip she only got out of bed for $10,000 a day.

Coal cheaply supplies almost 80 per cent of Australia’s electricity needs, but the 12 per cent sourced from about 25 gas-power stations, mainly to satisfy “peak demand” on hot days, massively increases the capital costs of Australia’s electricity network.

Sydney and Melbourne electricity prices have tripled since 1998, reversing more than four decades of real price falls. Since 2008, retail energy prices in Sydney, Melbourne and Brisbane have surged between 10 and 20 per cent a year, so much so that total demand has started to wane.

“Electricity consumption grew about 3.5 per cent a year since World War II, but very recently has started to fall,” says Tim Reardon, executive director of the National Generators Forum.

But maximum demand on very cold or hot days has still been growing, thanks to our growing battery of 8.5 million airconditioners, prompting huge investments to upgrade the energy grid.

“Around 25 per cent of the electricity network is built to run on only those handful of days a year when demand peaks, leaving billions of dollars of plant and equipment sitting idle for most of the time,” Warren says.

The growing costs of keeping comfortable on a handful of days a year has pushed up average costs throughout the year.

Cheap energy had long been one of Australia’s comparative advantages, underpinning our fledgling manufacturers. “Sydney is a geological freak,” says Warren, “surrounded by copious volumes of coal in the north and south.”

But the ultimate cost of electricity has decoupled from the price of coal, thanks to a perfect storm of rising “peak demand”, obsolescent infrastructure, a dubiously effective raft of “green schemes” and a flawed regulatory system that has encouraged unnecessary investment.

Government rules ensuring households are left entirely in the dark about the huge variation in the cost of supplying power, including at peak times, have made the situation worse. Customers face no incentive to be careful with electricity consumption, resulting in much higher prices for everyone all year round.

The standard wholesale prices of electricity are about $30 to $60 per mega watt hour, but on very cold and hot days the price can rocket beyond $12,500 Mw/H.

Power consumption, and the wholesale electricity price, surge in the morning at about 8am and then again at about 7.30pm.

“If prices bore a closer relationship with real costs a factory might shut down on a 40C day, or a middle-class family might choose to turn the pool filter off,” says Warren.

“Households without airconditioners pay an implicit subsidy of $330 each year for upgrades to networks and generators to ensure electricity can get through in times of high demand,” he adds.

At the same time as peak demand has been rising, the ageing grid of power lines and substations is being upgraded. The bulk of electricity generators and supporting grid were built during the 1960s and 70s with lifespans no longer than about 50 years. More than half the increase in power costs since 2007 is a direct result of extra investment in electricity networks.

Improved reliability standards have sped up the refurbishment. A major blackout in Sydney in 2004 prompted state governments to ratchet up reliability standards.

If households realised the ultimate cost, they might have complained less about blackouts.

David Leitch, a utilities analyst at UBS, says “the NSW government’s decision to make Sydney an N-2 city rather than a N-1 city, meaning at any given time two rather than one major lines could be down without triggering major disruptions, pushed up investment costs by 25 per cent”.

Flawed regulatory arrangements have encouraged excessive investment, lumping consumers with higher bills than they should otherwise be paying.

Since the Australian Energy Regulator became the national body responsible for setting the maximum prices energy networks could charge in 2009, the pace of price increases has accelerated dramatically.

Unlike electricity retailers or electricity generators, electricity networks are natural monopolies, resulting in government regulation of their charges.

Every five years the AER sets a price trajectory for the electricity grids across Australia’s states, except those in Western Australia. The regulatory price caps of the networks are set according to the value of their assets, so they have an incentive to “gold-plate” their networks to ensure higher returns, unless regulators have the power to penalise them for over-investing.

The value of the regulated asset base of NSW networks has risen from $10 billion to $30bn since 2005. In the decade from 2001, Queensland’s transformer capacity grew by 130 per cent, more than it had in the 23 years prior.

By 2015, NSW networks will have a regulated asset base per customer that is more than five times greater than electricity networks in Britain, where regulators have had far greater powers to penalise firms for excessive investments and to force them to conform to efficiency benchmarks. Permitted rates of return on investments for networks in Britain are about 3 percentage points lower than in Australia in 2010, according to a recent study.

“In Australia, whatever networks spent would be included as a valid capital expense, forcing up costs in the next regulatory period,” Phil Manners, an economist at the Centre for International Economics in Sydney, says.

The chairman of the AER, Andrew Reeves, concedes the rules had been too generous to the electricity networks, permitting rates of return on investment of about 9 per cent.

A new set of rules, which have effect from 2014, are likely to limit future prices increases, he says. “If we find that any of the expenditure was unnecessary or inefficient we can refuse to add that expenditure to the network’s asset base – so they won’t earn a return on the investment,” he adds.

Nearly 20 years after the Hilmer report recommended privatising state electricity assets, only in Victoria has the state government privatised all its electricity assets – generation, distribution and retail provision.

The Productivity Commission says “the rationale for state ownership of network electricity businesses no longer holds”, pointing to the unfairly cheap borrowing costs publicly owned companies enjoy over private competitors, which in turn encourages lazy and excessive spending.

“State-owned businesses in NSW and Queensland have increased their capital expenditure to levels well above those of private firms in Victoria for a level of peak demand,” said the commission recently, citing studies that suggest state-owned networks in NSW and Queensland were half as efficient as their privately owned peers in Victoria.

“State-owned businesses have had relatively large increases in regulated assets for a given increase in their network capacity,” it added.

So far, renewable energy schemes and the carbon tax make up less than 20 per cent of households’ ultimate energy bill, but falling consumption and rising commodity prices may increase their burden.

The Renewable Energy Target forces retail electricity providers to source energy from more expensive renewable sources, such as wind and solar energy. By 2020 electricity retailers will be required by legislation to buy 41 terawatts of energy from renewable sources.

“At the time RET was legislated, such a sum was bound to amount to around 20 per cent of total electricity consumption coming from renewable by 2020,” explains Reardon, “but falling electricity consumption could mean the ultimate fraction is much larger, putting even more pressure on prices.”

Cameron O’Reilly, chief executive of the Energy Retailers Association, points out that solar and wind energy are about three times as expensive to buy as electricity from coal-fired power stations.

Gas is about half as emissions-intensive as coal, but O’Reilly worries the $23 a tonne carbon tax will be ineffective because it won’t provide sufficient incentive to shift from coal to gas.

“If Australian gas prices ever rise to the levels in Japan and Korea, coal will remain a more attractive fuel for electricity generation, even with a carbon tax, which would simply serve to damage the country’s economic competitiveness by artificially putting up energy costs,” O’Reilly says.

Reardon agrees, adding that “the carbon tax would have to be between $80 and $100 a tonne to have any substantial impact on the energy supply decisions”.

Making forecasts about future energy prices is difficult, though. Warren points out current coal prices have been fixed by long-term contracts. “In 2015 lots of those contracts will need to be renegotiated at higher coal prices,” he says.

Manners from CIE is critical of state-government feed-in tariffs, which force retailers to buy solar energy from customers with solar panels.

NSW’s scheme, introduced by the previous Labor government, forced retailers to buy solar energy at six times the market price.

“The government has closed the scheme to new entrants, but it’s still costing households around $40 a year on a typical bill,” he says, pointing out the scheme effectively forced poorer households, who couldn’t afford solar panels to subside the energy use of richer ones who could.

Bupa goes on $500m health kick

admin — Mon, 07 Jan 2013 00:01:31 +0000

THE giant British health insurer Bupa is making an aggressive expansion into Australia, splashing half-a-billion dollars on acquisitions.

The first is the $374 million purchase of Australia’s biggest dental chain, Dental Corporation, which has about 190 clinics in Australia and New Zealand and more than $400 million in annual revenue.

Dental Corporation was 64 per cent owned by the Indian giant Fortis Healthcare, which is quitting Australia.

The second, smaller buy is Innovative Care’s aged-care operations – 10 residential aged-care homes and more than 1100 beds in Victoria, New South Wales and Queensland.

The purchase takes Bupa’s total residential aged-care portfolio to 60 homes and more than 5600 beds – a small chunk of a cottage industry still strongly represented by churches and charities.

Together, Bupa and the government-owned Medibank control more than half of Australia’s private health insurance policies. But unlike Bupa, Medibank does not own or run aged-care facilities.

A spokeswoman for Medibank said the government-owned business was focused on its private health insurance and health services operations.

Paul Gregersen, a Bupa manager in Australia, said the purchase of Innovative was the largest in the sector for several years. Innovative Care is an unlisted public company owned by the Croft family, of Victoria.

”It’s an excellent business with relatively new accommodation, strong dementia care and great people,” Mr Gregersen said.

A Bupa spokesman played down reports that Bupa was looking seriously at Regis Group’s aged-care portfolio or Lend Lease’s 2317-bed portfolio.

But this week’s Innovative Care purchase coincided with an announcement by the Mental Health and Ageing Minister, Mark Butler, that aged-care providers would have to publish their accommodation prices on a website and seek government approval to charge more than $85 a day.

Charges of more than $50 a day would need to be ”justified”, Mr Butler said.

Further, new residents would have 28 days after moving in to decide whether to make accommodation payments through a daily payment, a refundable accommodation deposit or a combination of the two.

Mr Gregersen said the announcements were ”great for consumers” and provided a ”degree of transparency”.

Bupa, which acquired MBF in NSW and HBA in Victoria, reported a $225.1 million after-tax profit in the 2011 calendar year, slightly down on the previous year.

But premium revenue increased by 7.3 per cent to $4.56 billion. With more than 3.3 million policyholders, Bupa is expecting to increase profit.

Youcompare Blog from the Australian: Health insurance unit hits wealthy

admin — Fri, 04 Jan 2013 00:10:31 +0000

It seems high income earners who take out budget plans to avoid tax will be targeted by a new federal government probe, Youcompare has found this article in the Australian

HIGH-INCOME earners who take out cheaper health insurance to avoid paying the Medicare levy surcharge will be targeted by a new federal government probe.

Amid fears that the principle of community rating is under threat, due to a major imbalance in the health insurance market, the government will also look at families and single parents who are stripping back their cover to reduce their premiums.

An intelligence unit established in the last budget has told the industry it would examine whether rising premiums and changes to government subsidies and taxes had prompted consumers to make changes to their cover that could undermine the entire health system.

“In recent years as consumers have been faced with a range of incentives to take out private health insurance, the market has reacted by increasing the availability of exclusionary and restricted products, in addition to the use of excess and co-payment based products,” the Premiums and Competition Unit said this week.

“The greater range of products available may be a positive for competition but on the other hand consumers may not be fully aware of their future care requirements and may not be able to make an informed choice.”

Community rating is a cornerstone of the health system, requiring funds not to discriminate on the basis of a person’s health status, even if it provides for little difference between insurance products.

Over the past five years, health funds have been trying to compete for money-savvy consumers by offering them policies with large excesses and co-payments or significant exclusions.

Of the 5,130,000 policies in Australia, 2,833,000 now have an excess or co-payments – often high-income earners who want to pay the lowest premiums possible while still avoiding the Medicare levy surcharge. Meanwhile 1,353,000 have exclusions. Families and single parents are more likely to have a policy with an excess and exclusions as a means of reducing their premium.

With cost-of-living pressures fuelling this market trend, insurers have been left with fewer well-paying members and more high-cost claimants, forcing them to reduce the benefits on offer, inevitably making insurance less attractive to potential new members.

There are also fears more members will be caught out when they need treatment — 33 per cent of all complaints to the Private Health Insurance Ombudsman last year related to benefits and levels of cover — or simply add their names to public hospital waiting lists to avoid out-of-pocket expenses.

Private health insurance test a taxing time

admin — Thu, 03 Jan 2013 23:21:29 +0000

Individuals earning over $84,000 a year and families earning over $168,000 a year had their 30 per cent government subsidy reduced or eliminated in July this year.

It was their responsibility to notify their fund of their income so their premiums could be adjusted to reflect the new lower government subsidy. However, the survey of over 1300 Australians found most of those hit by the means test have failed to take any action to avoid a tax penalty.

They will face a tax bill of between $339 and $1000 next July when the government moves to claw back subsidies fund members were not entitled to. The bad news for the government is that this tax bill will arrive around the same time as a federal election is due.

One in four people in the income band affected by the new means test don’t have private cover and they could be facing a higher tax penalty as well because the Medicare Levy Surcharge that applies to them has also been increased.

The Galaxy survey found 91 per cent of those affected by the test were aware of its introduction. However, only 5 per cent said they had contacted their fund to inform them of their income level.

Of those affected, 16 per cent pre-paid for at least a year of cover before June 30, thereby avoiding the impact of the means test for the first 12 months.

And 53 per cent said they had not made any changes to their insurance in the past 12 months.

One in five people affected acknowledged they should look into the means test and admitted they didn’t know how it would affect them.

“This picture signals a level of inertia, if not complacency among Australians with their PHI (private health insurance) that is setting them up for some unhappy tax returns in the year ahead,” the poll analysis says. Individuals earning more than $130,000 and families on over $260,000 will lose the 30 per cent government premium subsidy altogether – but 48 per cent of them have taken no action to avoid a tax bill.

Power bill cuts at stake in AGL fight against ESCOSA

admin — Thu, 06 Dec 2012 23:22:20 +0000

AN average $160 cut to household electricity bills is at stake when the Supreme Court on Friday begins hearing AGL Energy’s challenge to the electricity regulator’s decision to lower power prices.

The state’s largest electricity retailer argues the Essential Services Commission of South Australia wrongly exercised its power to review prices when it decided on October 2 to amend a 2010 price determination following a review forced by welfare groups.

As first reported on adelaidenow, AGL Energy announced late on Tuesday it would launch legal action against ESCOSA in the state’s highest court.

ESCOSA’s change stands to cut an average $160 from the electricity bills of South Australians on standing contracts, although energy retailers have announced savings wouldn’t be passed on to about 570,000 households on market contracts.

Premier Jay Weatherill yesterday said while AGL Energy had the right to pursue legal action, the State Government wanted a “strong regulator that holds their feet to the fire in relation to energy prices.”

“The regulator’s made a decision about an 8 per cent reduction in electricity prices with the standing contract, and obviously we support that, we advocated for that,” he said.

AGL Energy claims the decision in SA, along with a similar decision in Queensland, would reduce profit by about $45 million in the 2012-13 financial year, and curb investment in electricity networks.

The company will have its first opportunity to put their position to the Supreme Court during a directions hearing on Friday.

In a summons obtained by The Advertiser, AGL Energy said the commission’s draft decision was a breach of the law.

The company also claimed that the draft determination was an improper use of ESCOSA’s powers, as it took into account irrelevant factors when making the determination, while failing to consider other relevant factors.

SA Council of Social Service executive director Ross Womersley said AGL Energy’s actions clearly demonstrated a lack of interest in the rights of the state’s energy consumers.
Read More:
“AGL Energy have clearly indicated their interest is primarily only in their shareholders,” he said
http://www.adelaidenow.com.au/business/sa-business-journal/power-bill-cuts-at-stake-in-agl-fight-against-escosa/story-e6fredel-1226530737639” title=”Power bill cuts at stake in AGL”>

PM’s power plan can’t fix shock

admin — Tue, 04 Dec 2012 02:33:40 +0000

JULIA Gillard’s announcement yesterday that she would take action to “save families up to $250 a year on electricity bills” is readily understandable. With a long, hot summer in prospect, Australian families are in for an electric shock.

But Gillard’s efforts to blame Coalition governments for the price hikes are just more of the finger-pointing that has poisoned relations between her government and the states. Were Gillard serious about cutting bills, she would get rid of green imposts that hit consumers for no discernible environmental benefit, and encourage the speedy privatisation of inefficient, state-owned power businesses. Instead, she is doing the opposite.

That families will suffer from high electricity charges is undeniable. With airconditioning ubiquitous, household power consumption surges in hot summers. At the same time, electricity prices are now 40 to 50 per cent higher than when Labor came to power in 2007 and have increased by 10 to 20 per cent in the past year alone.

So Christmas bills will bring a double whammy: higher quantities consumed, and a steeply increased price per unit.

In Queensland, for example, the typical household will consume 50 to 100 per cent more power in a hot summer than in the winter and spring months. With the price 10 to 20 per cent higher than last year, that will translate into a slug of $100 compared with last summer’s bill and $300 to $400 more than last spring’s.

Why charges are now so much higher is no mystery. Again, consider Queensland: climate change charges built into electricity prices have increased tenfold since 2007-08, and now exceed $1 billion a year. In 2007, Queenslanders paid less than 3 cents in the dollar on climate change imposts on electricity; now, they pay 17cents.

With the carbon price set to increase by nearly a third over the next five years, that share is only going to rise. Indeed, despite everything Gillard says, forcing up electricity prices, thus inducing households to slash their consumption, is crucial to her government’s climate change policies: as Treasury said in its carbon tax report, reducing “electricity demand is an important source of abatement, comprising over 40 per cent of the (target) cumulative abatement to 2020″.

To kick-start that choking of demand, electricity generation costs alone seem set to rise by between 50 per cent and 145 per cent over the period 2008-2015. And network costs (the costs of transmitting and distributing electricity) have been rising too.

Those costs, that account for about half the average household bill, have increased by 77 per cent since 2007-08. In large part, that reflects the cost of replacing network assets installed in the electricity investment surge that went from the late 1960s to the 80s.

But greater spending has also been driven by the need to strengthen the network to cope with rising peak demand.

And adding to the cost pressures, the NSW and Queensland Labor governments imposed tougher reliability requirements in the early to mid 2000s, following strong public reaction to widespread blackouts.

Unfortunately, exactly like the National Broadband Network, those tougher reliability standards were never subjected to cost-benefit appraisal.

Read More: http://www.theaustralian.com.au/opinion/columnists/pms-power-plan-cant-fix-shock/story-fn7078da-1226528456409

Power price rises foreshadowed in wake of PM’s plan to cut bills

admin — Tue, 04 Dec 2012 02:15:02 +0000

It seems that Julia Gillard’s plans to save consumers $250 a year on power bills may already have been sandbagged in NSW. It’s due to plans for more price rises for many consumers in the very state which Federal Labor has identified as crucial to its hopes for re-election next year. Energy Australia, one of the biggest electricity suppliers, has outlined plans to put prices up by 10.5 per cent over the next three years.

Here More: http://www.abc.net.au/news/2012-12-03/power-price-rises-foreshadowed-in-wake-of-pms-plan/4405588?section=business

Solar and wind could offer ‘cheaper power than coal’

admin — Fri, 30 Nov 2012 01:30:46 +0000

THEY account for less than 4 per cent of our electricity generation now, but solar and wind could be cheaper than coal by 2030, according to the Climate Commission.

Chief commissioner Professor Tim Flannery said rooftop solar panels may already be cheaper than conventional electricity in areas with high power prices, such as south-west Western Australia, and some regional areas.

Solar generates about 0.3 per cent of the nation’s electricity and he said the industry was set to boom as costs fell and markets expanded in places like India and sub-Saharan Africa.

”If you had looked at penetration of mobile phones into the market 15 years ago, you would have seen a similar sort of thing,” he said. ”These technological changes can happen incredibly quickly.”

About 754,000 households and businesses have installed solar panels.

”I think a lot of people are saying ‘why would we be hostage to ever increasing electricity prices’?” Professor Flannery said. ”The price of production has dropped 75 per cent in four years, this is now affordable technology.”

Australia aims to generate 20 per cent of its energy through renewables by 2020. That figure is now about 10 per cent, two-thirds of which comes from hydroelectricity, nearly a quarter from wind and 3 per cent from solar.

The Generating a Renewable Australia report to be launched on Monday in Sydney by Professor Flannery and fellow author, Climate commissioner Professor Veena Sahajwalla, reiterates that global carbon dioxide emissions will need to be near zero by 2050 to ensure a two-thirds chance of keeping the planet’s average temperature less than 2 degrees above pre-industrial levels.

Macquarie eyes smart meter rollout

admin — Thu, 29 Nov 2012 01:35:51 +0000

IF THERE is money to be made in government-regulated assets such as toll roads, electricity and gas, it does not take long for Macquarie Bank to show its hand.

And with the likelihood of a rollout of smart meters in NSW, the bank is only too keen to help. The introduction of the meters is under way in Victoria and this week the NSW government disclosed it had established a working party to study their introduction in NSW.

So-called smart meters can be read remotely and the power supply also controlled remotely. As a result, they promise significant savings for power companies, but with uncertainty about their benefit for most households.

But the poor experience in Victoria, where the cost of the rollout has risen to more than $2.3 billion, from the initial estimate of $800 million, and a lack of household benefit from the move, threatens to derail the proposal in NSW before it gets off the ground.

Recently, the power industry overseer, the Australian Energy Markets Commission, opened the door to the possibility of taking meters out of the hands of the power distributors and putting them into independent management, in a bid to drive change.

Macquarie Bank, for one, reckons electricity retailers are the natural owners of the meters, since they already hold the supply contracts with electricity consumers.

This would involve taking the metering business out of the hands of the distributors, such as Ausgrid and Endeavour Energy in NSW, or Citipower, Jemena or Powercor in Victoria, in favour of having the retailers such as EnergyAustralia, Origin Energy and AGL run it.

In a submission to the Productivity Commission review of electricity networks, Macquarie argued power retailers were better placed to assess and manage the risk of the introduction of meters – and face the loss of customers and market share if they have an uncompetitive product.

For most power users, the lack of clear benefits from smart meters means there is natural concern that their introduction will emerge as a new revenue stream for power companies.

Coming as electricity prices are surging to fund an upgrade to the electricity network, without readily identifiable positives, resistance will be acute.

CLIMATE SPECTATOR: Australia’s smart meter snag

admin — Thu, 29 Nov 2012 01:12:39 +0000

A report released by Smart Grid Australia reveals that government and energy companies face a huge task ahead educating and persuading consumers/voters of the merits of smart meters and time-varying pricing.

This is bad news for the federal government whose energy white paper has pretty much hung much of its hope on time varying pricing as the recipe for containing peak demand and electricity costs, with little emphasis on alternative measures such as an energy efficiency credits scheme and other dedicated measures to encourage demand management.

The chart on the left below, taken from the Smart Grid Australia report, reveals that a third to almost a half of consumers haven’t even heard of smart meters, except for in Victoria which has had a mandatory roll-out over the past few years. Unfortunately while Victorians are certainly aware of smart meters, the chart on the right reveals that a large proportion of the population tends to have an unfavourable view about them. For the other states consumers tend to have a neutral view, probably because they haven’t really thought about them.

The poor experience in Victoria it appears has served as a loud and rude wake-up call to electricity businesses and government about energy consumer behaviour and attitudes.

Reading through this report from Smart Grid Australia, what you read between the lines is that energy companies know there’s a need for greater use of demand management, but they’re struggling to deal with an apathetic and grumpy consumer.

Jemena blames politics for smart meter confusion

admin — Wed, 28 Nov 2012 01:59:21 +0000

Update One of the largest network operators in Victoria has criticised state governments in Victoria and New South Wales over their handling of the debate about the roll-out of smart meters.

Jemena, which provides electricity to 319,000 homes and businesses across north-west Melbourne, said the Victorian government under Ted Baillieu had failed to back the $2.3 billion program for political reasons.

An earlier version of the program introduced by Labor premier John Brumby used simpler devices and would have cost $850 million.

The larger sum, along with Wonthaggi desalination plant and the Myki transit card, became key election fodder for the Coalition and they have continued to wield it, Scott Parker, Jemena’s general manager corporate affairs, said.

The government was happy to attend launches of online portals by firms such as Jemena that show how households could save money from the meters, he said.

“But it won’t get up there and defend the integrity of the program, and will still call it a program whose budget blew out under the previous government – and no such thing happened – but it’s not in their political interest to say otherwise.”

Victoria’s Energy and Resource Minister Michael O’Brien, though, said the state’s Auditor-General had found a “massive smart meter cost blowout” during the former government’s watch.

“The Coalition Government independently reviewed the program,” Mr O’Brien said in a statement. “As a result we are reining-in the costs and bringing forward the benefits of smart meters to consumers.”

The Baillieu government decided a year ago to proceed with the mandatory state-wide introduction of the intelligent metering device – which provides two-way communication between the consumer and the energy provider – but had provided textbook “learnings” that other states would do well to study, Mr Parker said.

“The big thing was that smart meters needed to be rolled out in conjunction with time-of-use pricing … so that people can see the benefit.”

Instead, the government introduced a moratorium on more flexible pricing in the state six months after the first meter installed, leaving consumers confused and opposed to the meters. From next July, Victorians will have the option to choose variable pricing from peak to shoulder and off-peak rates.

“The Coalition Government is determined to make smart meters start to pay their way, after years of mismanagement by Labor,” Mr O’Brien said.

“Victoria will be the first State to introduce widespread access to flexible pricing and off-peak rates from mid-2013″.

First electricity, now we face big rise in gas prices

admin — Tue, 27 Nov 2012 22:59:48 +0000

THE impact of the resources boom is soon to be felt by NSW households as surging gas prices from export projects in Queensland force up household gas bills.

AGL has applied to the NSW government pricing regulator IPART, the Independent Pricing and Regulatory Tribunal, to raise gas prices by an estimated 10.4 per cent from mid-next year, with further steep, although unspecified, price rises expected over the following two years.

Rising gas exports from eastern Australia will push up domestic prices since international prices are more than twice as high.

The impact is compounded by the fact that AGL’s long-term gas purchase contracts from producers are expiring over the next few years, leaving it fully exposed to an expected surge in gas prices.

As it has yet to finalise its new gas purchase contracts, AGL has not indicated the likely rise in gas prices that will occur in 2014-15 and 2015-16 in its application to the regulator.

The rises come in the wake of large rises in electricity prices, with increases of up to 20 per cent taking effect from July 1 just the latest.

Australia Phases Out Solar Credits Early to Curb Power Bills

admin — Tue, 27 Nov 2012 01:05:13 +0000

The Australian government said it will phase out a solar incentive program in January, six months earlier than scheduled, to cut electricity bills for homes and businesses next year by as much as A$100 million ($103 million).

The decision “will strike the appropriate balance between easing upward pressure on electricity prices and supporting households and suppliers who install solar” systems, Climate Change Minister Greg Combet said today in a statement.

The government program provided additional support for small-scale solar power by multiplying the number of certificates the systems would create under the government’s Renewable Energy Target, according to the statement.

The early removal of the incentives is a “decisive and positive step by the government toward minimizing the cost burden of the renewable energy target on Australian families and businesses,” Origin Energy Ltd. (ORG), Australia’s largest electricity retailer, said in an e-mailed statement.

The Sustainable Energy Association of Australia said the decision was “untimely and unnecessary.” Electricity regulatory reform would dwarf savings from the government’s announcement today, according to the industry group, which represents companies from Rio Tinto Group to Wesfarmers Ltd. (WES)

Mobile data usage sparks bill shock

admin — Mon, 26 Nov 2012 22:55:04 +0000

CLOSE to half of Australian mobile users are receiving bill shock and paying 40 per cent more than their advertised monthly contract, according to a study of the sector by Macquarie University.

The study finds that the average advertised monthly cap cost is about $53 but the actual cost to consumers averages $73.

The study’s author David Gray said one of the main factors behind excess charges was data usage as more people switched to smart phones.

”The data amount is probably going to increase as people move to 4G,” Dr Gray said of the new high-speed wireless services.

”This data would become more of a problem over the next 12 to 24 months as more of these 4G services begin to hit the market.”

Penetration of smartphones in the Australian mobile market has led to increased demand for data and complaints about disputed internet usage charges.

Telecommunications Industry Ombudsman Simon Cohen said last month the increased use of smartphones had triggered a doubling in complaints about unexpectedly high bills and a 150 per cent surge in complaints about disputed internet usage charges.

The Australian Communication and Media Authority said a new consumer protection code introduced this year would give better protection to mobile phone customers.

The new code restricts use of the term ”cap” and forces providers to send usage alerts to customers on included value plans.

The study, which was jointly funded by Amaysim, a low-cost mobile services provider, found mobile users between the age of 25 to 39 were the hardest hit by bill shock. It found 40 per cent are paying more than their advertised monthly cap plan and their monthly bill averages $88 – the highest among all age groups.

Renewables to dominate ‘within decades’

admin — Mon, 26 Nov 2012 02:37:34 +0000

CHIEF climate commissioner Tim Flannery believes Australia will be generating 100 per cent of its energy from renewable sources within decades.

At the moment renewables such as hydroelectricity, wind and solar power account for 10 per cent of Australia’s energy mix. That figure is expected to rise to 25 per cent by 2020.

But Professor Flannery insists there’s “no doubt” Australia will end up with 100 per cent renewables sooner rather than later.

“It’s only my gut feeling, but I would say (it will happen) within decades and not many,” Prof Flannery told AAP, adding that prices were coming down and penetration was growing “massively”.

The Climate Commission on Monday is to release a report examining renewable energy in Australia.

It suggests there is enormous potential but so far it’s under-utilised.

“Solar PV and wind could be the cheapest forms of power in Australia for retail users by 2030, if not earlier, as carbon prices rise,” the report states.

“The rate of growth of wind energy is well above any other large-scale generation source, growing at an average of 40 per cent each year over five years to 2009-10.”

Prof Flannery said the situation was similar to what was happening in the media where historically there’d been a few large generators of news and many consumers.

“But the internet means there’s now a whole lot of producers and a whole lot of consumers,” he said.

“The electricity sector is going the same way. We led the world in terms of small installations of PV (solar) last year.”

Smart move – but consumers pick up the costs

admin — Mon, 26 Nov 2012 02:04:44 +0000

DO WE really want to check our smart meters every time we turn on the dishwasher, take a shower or toast a slice of bread?

Has anybody wondered why almost every power company and lobby group in the country is pushing for the introduction of smart meters? It is worth pondering, for government, it seems, is about to fail the public again over energy policy.

First it was a faulty regulatory system which gave rise to ”gold-plating”, or overspending on networks, and spiralling power bills. The increase in ”peak demand” remains the industry catch cry to rationalise its rampant spending, even though peak demand has actually been falling for three years.

But as the myth of peak demand is now harder to propagate, industry is pushing for smart meters. The smart meter is the next big ruse.
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Smart meters and ”flexible pricing” merely shift the business risk from the company to the consumer. Like mobile phone bills, their sheer complexity will enable the promoter to game the customer.

Who will pay for the devices? Who will pay for the software upgrades? Where should the metering company sit, in an offshore structure? Should the device be company-specific?

The power lobby has done a first-rate job of spruiking the smart meter regime to governments so far, despite the issues in Victoria, the only state where they have been installed.

”In my view, smart meters combined with flexible tariffs are the next ‘gold-plating’,” says Bruce Robertson, the industry critic from consumer activist group Manning Alliance who exposed the ruse of overspending.

”The generators already game the NEM (National Electricity Market) by withholding supply at peak times and so on. Smart meters combined with time-of-use pricing open up a whole new range of gaming possibilities.”

The consumer takes on all the business risk for a start, says Robertson. If a power station, for example, suffers an outage for whatever reason, consumers pick up the cost.

Wholesale electricity prices can be extraordinarily volatile (they can be as high as $12,500 per megawatt; although, perversely, the price per megawatt-hour can also be negative). Under a flexible pricing regime the customer pays for this, says Robertson.

”Just how much fun is it to get the family together to eat a turkey at Christmas only to find it will cost $50 to roast it because some technician at a power station dropped a spanner in the works?”

This story really only deals with the economic and market aspects of the smart meter. There is a human cost. In lifestyle terms, the implications of constantly checking, or worrying about not checking a meter, will affect a lot of people.

AGL readies biggest wind farm in southern hemisphere

admin — Fri, 23 Nov 2012 00:20:05 +0000

AGL Energy, Australia’s largest operator of renewable energy projects, expects its $1 billion Macarthur wind farm to be operating fully in February as the country seeks to reduce its’ reliance on coal.

“It’s on time, on budget and, in fact, may well be completed a little ahead of schedule,” Managing Director Michael Fraser said.

Sydney-based AGL and partner Meridian Energy are starting the 420-megawatt Macarthur project in Victoria, the largest wind farm in the Southern Hemisphere, as Australia moves toward its goal of getting 20 per cent of its power from renewable energy by 2020.

The company expected Macarthur to be completed by the end of March 2013, Fraser said.

AGL expects to get government approval for its Gloucester coal-seam gas project in New South Wales state early next year. It faced a blockade last year at that project organized by environmental protester, farmers and politicians who were concerned that drilling for the gas would damage aquifers and contaminate and deplete water supplies.

“We’ve still got people who are protesting, but we’re not being blockaded,” Fraser said. “We’re getting on with the job. If we don’t develop new sources of gas, I don’t know where New South Wales is going to get the molecules from come 2017.”

Surging gas price

The Australian electricity and gas retailer expects the New South Wales government to decide early next year whether to approve its plan to expand the Camden natural gas project.

With natural gas prices on the east coast of Australia projected set to double and the government’s price on carbon emissions discouraging fossil fuels, the cost of gas-fired power stations may converge with that of wind farms, he said.

Alcoa invests to secure energy supply

admin — Wed, 21 Nov 2012 22:46:43 +0000

INDUSTRIAL giant Alcoa of Australia is set to expand further into the energy sector, continuing a trend for big power consumers to seek direct exposure to oil and gas explorers.

Just days after Fortescue Metals Group was revealed to be negotiating a stake in a shale gas explorer, Alcoa of Australia boss Alan Cransberg revealed his company had spent close to $200 million on exposure to local energy explorers and was likely to make further investments.

Energy security is a crucial issue for Alcoa, with the company’s assets understood to consume 20 per cent of Victoria’s electricity and about 24 per cent of Western Australia’s gas supply. The company has enjoyed decades of cheap energy, thanks to government subsidies and has had almost 95 per cent of its carbon tax exposure waived, albeit temporarily, by the Gillard government.

Speaking in Melbourne, Mr Cransberg said Alcoa had exposure to three ASX-listed energy companies, with deals in place with Empire Energy, market darling Buru Energy and $31 million shale minnow Transerv. ”So far we have invested somewhere between $100 million and $200 million, it is a significant investment and we will continue to invest,” he said.
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”We’ll continue to look at opportunities and the right investment, given we’re a long-term player.”

Alcoa is not listed as a major shareholder in any of the companies and its exposure is understood to be in the form of funding to assist in infrastructure development.

Mr Cransberg said the investments were designed to reduce Alcoa’s exposure to future rises in energy prices and to improve security of supply. ”We are well set up for the next decade, but in these sorts of areas you have got to start worrying about these things now,” he said.

Abott: Labor policy to blame for health fund premium rises

admin — Wed, 21 Nov 2012 01:37:27 +0000

OPPOSITION leader Tony Abbott has blamed proposed health fund premium rises on the governments means test on the private health insurance rebate and other policies that will make health cover more expensive.

News Limited reported today that health funds are this week expected to ask the government to approve a premium rise of at least five per cent from April next year, or more than double the rate of inflation.

The rise would add $150 a year to the cost of a family policy and $75 to a single policy.

“In the end it is the policy environment which is ultimately responsible for premium rises,” Mr Abbott said.

“And when you get a government that is means testing the private health insurance rebate in clear breach of an election commitment, when you’ve got a government that is changing the indexation for the rebate which is going to mean that everyone’s rebate starts to get more expensive from next year,” he said.

“This is a government which just doesn’t like private health insurance,” he said.

Health Minister Tanya Plibersek will review the health funds submissions for a premium rise and in the past has asked some health funds to moderate their claims.

Health funds industry sources say health inflation is running at 9 per cent and that is why they need a rise that is so large.

The April 2013 premium rises will come nine months after higher income earners were slugged with a new means test on their 30 per cent private health insurance rebate in July.

More than 2.4 million Australians will had to pay up to $1,200 a year more for their cover under the means test that reduces the 30 per cent rebate for individuals earning over $84,000 a year and families on over $168,000.

Electricity costs set to soar 15 per cent

admin — Tue, 20 Nov 2012 23:05:55 +0000

THE International Energy Agency (IEA) says electricity prices around the world are expected to rise by up to 15 per cent over the next decade.

IEA executive director Maria van der Hoeven says while there would be some regional differences, there would be a double digit increase globally.

“Electricity prices are expected to increase everywhere in real terms over the coming decade by 15 per cent on average,” Ms van der Hoeven told the Australian Institute of Energy national conference in Sydney today.

“That’s principally due to rising fuel prices and also due to renewable (energy) subsidies. Where renewable subsidies are passed onto consumers through electricity prices, the additional tariff component can be substantial.”

Ms van der Hoeven said electricity prices were highest in Japan and the European Union, well above those in the United States and China, due to higher fuel costs and higher capital costs and renewable subsidy costs.

Coal would remain the leading global fuel for electricity generation, given its use by the rapidly growing economies of China and India, among others, Ms van der Hoeven said.

Renewable resources would be the world’s second largest global fuel for power generation by 2015, overtaking natural gas, she said.

“After a period of very strong growth, renewable energy resources have reached a crossroads as some governments look at the undoubted benefits, yes, but also look critically at how renewables are being supported and how much that is costing,” Ms van der Hoeven said.

Electricity bill complaints on the rise

admin — Tue, 20 Nov 2012 22:51:41 +0000

The Energy and Water Ombudsman says there has been a 43-percent increase in complaints relating to energy bills over the last 12 months.

The Ombudsman’s annual report shows that consumers are having problems with high bills, customer service and affordability.

There are also rising numbers of people being given bad credit ratings for unpaid bills of hundreds of dollars.

The NSW Energy and Water Ombudsman Clare Petre says she is very concerned about the high number of complaints from customers who had their power cut off or were facing disconnection.

“People were disputing their bills, they were unable to pay their bills, they were facing disconnection or had already been disconnected, they were being subjected to debt collection or credit default listings,” she said.

“So there was whole range of complaints but they mostly related around energy affordability in many cases.”

She also says it is unfair that some people are being given bad credit ratings for small amounts of debt.

“We think it’s appalling and we’ve called for the amount of credit default listing to be raised because it’s a disproportionate impact for people to be credit listed for five years for a debt of a couple of hundred dollars,” she said.

“It just doesn’t seem fair to us and we’ve been strongly calling for that to be changed.”

She says consumers who are facing disconnection should get in touch with their energy provider to discuss their situation.

Many downgrade health insurance because of cost

admin — Mon, 19 Nov 2012 23:51:12 +0000

AUSTRALIANS are winding back their health insurance in response to frequent premium increases and changes to government subsidies and surcharges, threatening the balance between the public and private systems.

The dramatic trend, revealed in the first report of a new industry intelligence unit established by the Gillard government, comes as consumers brace for further price hikes as a result of inevitable premium increases in April and the reduced scope of the 30 per cent health insurance rebate.

While the government points to the number of insured Australians as evidence previous policy changes have had little negative impact, and the proportion with hospital cover remains relatively steady, the report shows that the average level of cover has become less comprehensive.

The time-honoured principle of community rating — whereby health funds must not discriminate on the basis of health status — means there is “relatively little substantive difference between insurers on hospital cover”.

As a result, insurers are trying to compete for cash-strapped consumers by offering them policies with large excesses and co-payments or significant exclusions.

Of the 5,130,000 policies in Australia, 2,833,000 have an excess and co-payments while 1,353,000 have exclusions, allowing those members to pay cheaper premiums and generally avoid the Medicare Levy Surcharge that applies to the uninsured.

Solar scheme shift stuns industry

admin — Mon, 19 Nov 2012 03:15:31 +0000

A rebate for rooftop solar panels will be halved six months earlier than planned in a move blasted by an industry group as “diabolical”.

Climate Change Minister Greg Combet announced the solar credits scheme would end in January next year “due to continued strong demand for household solar”.

In a statement, Mr Combet said the subsidy cut was expected to save households between $80 million and $100 million on electricity bills next year.

“Phasing out the [scheme] early will strike the appropriate balance between easing upward pressure on electricity prices and supporting households and suppliers who install solar PV,” he said.

According to the government’s figures, the level of support for a 3-kilowatt solar panel system will fall about $800-$1,000 across most state capitals. The current assistance for such a unit drops from $2,976 in Sydney to $1,984 from January 1, while the fall in Melbourne is from $2,528 to $1,696.

John Grimes, chief executive of the Australian Solar Council, said the surprise move would hit jobs and put solar PV out of reach for many middle-class households seeking relief from soaring power bills.

“People refer to this as the solar-coaster ride,” Mr Grimes said. “Our standing joke is that a day is a long time in solar policy.”

The acceleration of the rebate reduction comes as the government is under increasing pressure from the power industry to modify its 20 per cent renewable energy target (RET).

Current projections suggest renewable energy supplies will exceed the goal of a 20 per cent share of total supply by 2020.

Renewable energy advocates warn that tinkering with the target would place at risk as much as $18 billion in additional investment in solar, wind and other non-fossil-fuel energy sources by the end of the decade.

‘Desperate’

Ric Brazzale, president of the REC Agents Association, said solar PV installations were on course to drop from 350,000 in both 2011 and 2012, to 230,000 in 2013 as state feed-in tariffs were wound back. That fall is now likely to accelerate, he said.

‘‘The industry is desperate for some policy stability,’’ Mr Brazzale said.

The renewable energy industry has been building a critical mass in terms of scale and innovation capacity that is now at risk: ‘‘It’s just so wasteful to risk throwing it away.’’

Mr Grimes said solar PV prices had been falling fast because of a flood of low-cost production from China, but the reductions may not continue as the Chinese industry consolidates and loss-making firms go bust. Some 15,000 people are employed in the industry, he said.

But Rheem, Australia’s largest producer of solar hot water systems, welcomed the announcement, saying it would ”create a level-playing field for all solar hot water producers”.

The renewable industry’s peak lobby group, the Clean Energy Council, said today’s decision should “erode all arguments” for further changes to the RET.

‘‘We would have expected the government to have more regard for the sense of investor uncertainty today’s announcement creates, right at the time when both major parties are seeking to demonstrate that Australia is a reliable place in which to invest, with stable and consistent market rules,’’ Russell Marsh, the council’s policy director, said.

“While it is appropriate that governments continue to review the level of incentives, it’s important that this is handled carefully and timed sensibly,” Mr Marsh said.

Medicare rebates don’t keep up with inflation and families struggle with medical bills

admin — Mon, 19 Nov 2012 00:23:14 +0000

FAMILIES are being forced to sell their homes or raid their superannuation to pay medical bills, with some going bankrupt as Medicare rebates fail to keep pace with inflation and health funds fail to cover all medical charges.

The financial nightmare has exposed the growing inadequacy of Medicare and health fund rebates and the crippling health costs to those with multiple or serious illnesses.

Are you unable to afford treatment? Tell us your story in the comments below

Battling breast cancer, chemotherapy and a life-threatening infection, Leonie Havnen’s biggest challenge was not her health but the $31,300 in medical bills not covered by Medicare.

This year the 52-year-old Sydney mother of two was forced to raid her superannuation nest egg to cover her treatment costs.

“As a taxpayer for the past 36 years who pays around $30,000.00 a year in tax, $2,500 health insurance and the Medicare levy, to have to pay out of pocket for life saving medical treatment, just screams to me the ‘the system is broken’,” she said.

Cancer sufferers can ill afford huge bills.

“Why did I have to access my superannuation to pay for my life saving medical treatment we aren’t a third world country.”

Since being diagnosed with breast cancer a year ago Ms Havnen has had surgery six times, first to remove both breasts and then to deal with the consequences of a golden staph infection. She spent time in hospital when one of her kidneys collapsed. A statement from her health fund for the 2011-2012 financial year shows her private hospital treatment cost $77,732 and she received rebates of just $59,400 from Medicare and her health fund leaving her $18,331 out of pocket.

On top of these hospital expenses, Ms Havnen had another $12,000 in bills for specialist appointments, scans, health fund excess payment, and medication.

Her health fund reviewed her case after being contacted by The Sunday Telegraph and have since refunded her a further $6000.

The power game: electricity’s winners and losers

admin — Mon, 19 Nov 2012 00:15:02 +0000

The way electricity prices are surging, there should be some high-voltage returns from power companies.

Well, you’d think so.

But the generators are struggling with – you’re not going to believe this – falling wholesale prices.

So it must be further down the wires where the money is being made.
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How about the companies that bill you, then? A few are listed: Australian Power and Gas , ERM Business Energy and Infratil.

But on their recent form it can’t be them, either. One runs at a loss and the already modest profit of the other two is falling.

They’re getting their power supply more cheaply except there’s, uh, a leakage. Thanks to ferocious competition for customers, what they gain on the swings, they lose on the roundabout.

NOTE THE NETWORKS

That leaves the network – the companies with the transmission towers and wires strung from them – and there’s the rub.

Most of them aren’t in private hands, but are government owned. Bummer.

The only listed stock that is mostly an electricity network supplier is SP AusNet, although it also sells gas.

It’s the biggest holding of fund manager Allan Gray, but even that’s due to the dividend, not the prospect of a price surge.

Yielding 7.7 per cent, it comes with a small tax break as it’s one-third franked.

So if you bought the stock at its current price, the pre-tax yield would be about 8.7 per cent – way above what you’d get on a term deposit.

“It’s a stable, basic business that does nothing fancy. It seems to do quite well,” Allan Gray’s Simon Marais says.

A senior analyst at Morningstar, Adrian Atkins, says SP AusNet “looks modestly undervalued”.

One reason it’s been marked down is litigation over the 2009 Victorian bushfires, which will probably be covered by insurance but might not be counted by the regulator in setting its return. As you’ll see, rules and regulations for the electricity industry are in a world of their own, with often bizarre consequences.

PROBING THE GIANTS

No, the real money is in the two network giants of Origin Energy and AGL Energy, and running an electricity network isn’t even their biggest business.

They operate under some very odd rules set by the states that control how much they can earn. Or, at least, they are supposed to.

One idiosyncrasy is that lower interest rates should cut profits in the view of the regulator. This is by stint of a revenue allowance based on how much they’ll be spending. So lower interest requires less revenue. Get it?

Naturally, the way around regulations that penalise lower costs is to erect more towers and wires so more revenue is needed and so a higher tariff becomes essential. Should you ever get up close to one of those towers, not that I recommend you try, let me know if it’s gold-plated with platinum wires.

There are more than 1300 pages of rules, the 51st version in six years, set by a Beijing-sounding Standing Council on Energy and Resources along with separate state and federal regulators who would only agree what day it was purely by coincidence.

Not even the banks have their return regulated, as you’ve probably noticed.

THOSE PESKY PRICES

A plethora of government reports and inquiries, along with mounting pressure from politicians, suggests the rules are going to change eventually, though goodness knows in which direction.

‘The challenge will be the massive asset base they work with,” the chief executive at Lincoln Indicators’, Elio D’Amato, warns.

As the biggest power supplier, Origin Energy is loved by super funds because it does everything from producing gas and electricity to connecting customers.

Here’s the bad news. The shares have slumped to a five-year low on a forecast fall of 10 per cent in its underlying profit for 2012-13 after Queensland played hard ball over power prices.

If you’ve got your head around falling wholesale but rising retail power prices, you’re ready for what’s next. If you haven’t, just try to keep up.

It turns out that rising retail prices aren’t good for the power companies.

The reason is that demand falls as a result, and selling power is all about volume. In fact, demand has been falling for a few years, due to rooftop solar panels, the dollar gutting manufacturing and miners generating their own power.

Oh, and because of the higher prices, turning the airconditioner down does wonders for the household’s cash flow.

So the more politicians control electricity price rises, the better for Origin and AGL.

Private health insurance premiums to rise up to $150

admin — Sun, 18 Nov 2012 22:18:31 +0000

HEALTH insurance could be pushed out of reach for many people because funds are set to lift premiums by $150 a year, advocates warn.

The rise is expected from April next year and industry sources predict they will ask the Government to approve premium increases of at least 5 per cent.

This new hit to household budgets will come nine months after higher income earners were slugged with a new means test on their 30 per cent private health insurance rebate.

More than 2.4 million Australians now pay up to an extra $1200 a year for their cover.

Rising health insurance premiums inevitably push people back into the public health system, South Australian Council of Social Services executive director Ross Womersley says.

“Unless people’s own incomes are going up at a similar rate, or they’re already on a level of income that means that they can afford to accommodate these kinds of increases, it will create enormous pressure,” he said.

“When it comes to expenditure, most people prioritise. Things like health insurance are always an added bonus only if you can possibly afford them.”

Mr Womersley feared some people would allow their health to deteriorate to such an extent that it would weigh on the health system in the long term.

Health funds must submit applications for a premium rise to the Government by tomorrow – and they say it is hard to see how the rise could be lower than 5 per cent with private health inflation running at 9 per cent.

One man v the system: power industry says sorry

admin — Fri, 16 Nov 2012 01:46:14 +0000

IN THE morning, Bruce Robertson and his family were facing a lawsuit from six state electricity giants. By early afternoon, they were fielding an apology.

Grid Australia, the peak body representing the nation’s $10 billion transmission industry, had threatened to sue the cattle farmer for defamation.

As an outspoken critic of the power companies, Robertson had exposed their inflated forecasts for electricity demand, and the ”gold-plating”, or excessive spending, which has been the driving force behind the rise in electricity bills.

After revelations about the lawsuit in the Fairfax press however, an outcry of public support for the farmer from the mid-north coast of NSW forced an embarrassing back-down.

”I’m still confused. One minute I’ve got a lawsuit on my hands, the next minute I’ve got an apology. What’s going on?” said Robertson.

The chairman of Grid Australia, Peter McIntyre, wrote to Robertson to ”sincerely apologise”. The threat of defamation proceedings had been withdrawn, he said, inviting Robertson to meet and discuss the issues.

Electricity sell-off gets tick of approval

admin — Fri, 16 Nov 2012 01:22:30 +0000

The Chairman of the Energy Users Association says the New South Wales Government sell-off of electricity generators will help reduce power bills in the south east.

The government announced this week that the sale will free up to $3b for infrastructure spending.

The Chairman, Brian Green said the move is the right option.

“I think it’s the right way to go. It’s really finalising a process that was started by the previous administration in New South Wales,” he said.

“We would see private ownership of the generators assist in competition and eventually driving prices down.”

Mr Green said the plan will help increase competition.

Read More: http://www.abc.net.au/news/2012-11-16/power-sell-off/4375902?&section=news

Coalition renews campaign blaming carbon tax for soaring electricity bills

admin — Wed, 14 Nov 2012 03:36:48 +0000

THE Coalition has seized on claims newly re-elected US President Barack Obama has ruled out introducing a domestic carbon tax to renew its attack on Australia’s rising electricity prices

The Opposition’s environment spokesman Greg Hunt cited a report on the United States political blog The Hill which quotes a White House official declaring: “The Administration has not proposed nor is planning to propose a carbon tax.”

The report states that a carbon tax had been flagged by some economists in discussions about how the debt-laden superpower could raise revenue and avoid the so-called fiscal cliff.

“The push for a US Carbon Tax had been promoted as a revenue raising measure,” Mr Hunt said.

“As an environmental policy to address climate change, the Carbon Tax is flawed as it simply drives up electricity and gas prices,” he said.

A spokesman for Climate Change Minister Greg Combet said the US has already pledged to reduce its greenhouse gas emissions by 17 per cent below 2005 levels by 2020 and was currently taking “significant action” to reduce its greenhouse gas emissions.

Rising electricity prices increase retiree burden

admin — Tue, 13 Nov 2012 02:26:52 +0000

A spike in electricity prices has made it harder for Australians to achieve a comfortable retirement, the Association of Superannuation Funds of Australia (ASFA) said.

ASFA’s Retirement Standard revealed that in the September quarter, a couple’s ‘comfortable’ retirement would cost $56,236 a year, 1.7 per cent up on last year, while a ‘modest’ retirement would cost $32,511 annually, an increase of 2.3 per cent.

Electricity prices increased by 15.3 per cent and were fingered as a major contributor, along with a 5.8 per cent increase in property rates and charges, which the Australian Bureau of Statistics (ABS) said was a result of investment into infrastructure and the introduction of carbon pricing.

The increase in the minimum dollar figure, between the June and September quarters, for those seeking a comfortable retirement and those pursuing a modest retirement was substantial, ASFA said.

Origin warns of higher power prices

admin — Mon, 12 Nov 2012 03:49:19 +0000

ORIGIN Energy chairman Kevin McCann says households will be worse off if state governments continue to regulate electricity prices.

A deregulated market, such as the model that operates in Victoria, provided the best outcome for consumers, Mr McCann told shareholders at Origin’s annual general meeting in Sydney on Monday.

Origin is Australia’s largest electricity retailer.

“In Queensland, New South Wales and South Australia, state governments are still regulating electricity prices, long after price controls were removed from other household staples such as milk and petrol,” Mr McCann said.

“Actions by state governments that seek to cap or hold retail prices artificially low will have unintended impacts, including stifling future investment in generation and significantly lessening competition for consumers.

“We look to governments to support and promote competition and innovation.”

Mr McCann said Victoria’s deregulated market was the most competitive in the world, as measured by the number of people who switch between retailers.

Upping the ante on private health insurance

admin — Sun, 11 Nov 2012 22:40:28 +0000

OPINION: ONE of the most significant changes announced in the Mid-Year Economic and Fiscal Outlook was the treatment of the private health insurance rebate.

From the beginning of next July the rebate will no longer apply to the penalty payments incurred by policyholders taking up private insurance after the age of 30, under the Lifetime Health Cover arrangements. And from April 2014, the 30 per cent government rebate will be based on the lower of premiums adjusted by the CPI or actual premiums. (Note that the government rebate is set at 35 per cent for those aged 65 to 69 and at 40 per cent for those aged 70 and over.)

In light of the fact that the average annual increase in premiums has been close to 5.5 per cent a year in the past three years, the likely practical effect of this change is that the rebate will be adjusted according to movements in the CPI.

Reform package pushes gas as new energy leader

admin — Fri, 09 Nov 2012 00:36:01 +0000

AUSTRALIA could become the world’s biggest gas exporter but its domestic use of fossil fuels will decline as the carbon tax drives a gradual switch to renewables such as wind and solar, the government’s energy white paper says.

The long delayed paper, released on Thursday, urges the deregulation of electricity pricing and the roll-out of smart meters, which give businesses and households greater ability to use cheaper, off-peak electricity, as part of a package of reforms to curb soaring power prices.

It also calls on state and federal governments to put in place regulations to overcome environmental and local objections to the coal seam gas industry so that coal seam gas reserves can be fully exploited.

The paper predicts a possible shuffling of global rankings of energy production, suggesting Australia could ”rival” Qatar as the world’s biggest gas exporter as gas exports surge by a massive 19 per cent per year.

Visitors sending our health bills sky-rocketing

admin — Thu, 08 Nov 2012 23:24:36 +0000

VISITORS to Australia are racking up tens of millions of dollars in unpaid health bills, prompting calls for restrictions on their access to public hospitals.

In Victoria last financial year, taxpayers were left to cover bad debts of $11.6 million, a third of the cost of treating patients not eligible for Medicare in that state, while in NSW hospital staff could recoup only $25m of the $40m cost for treating such patients. Western Australia has problems with HIV-positive 457 visa holders who require expensive antiretroviral drugs, while in Queensland the cost of treating some non-residents, especially those with tuberculosis, can exceed $1m a patient a year.

Taxpayers have even had to fund the transport of patients to their home countries.

The states are demanding the commonwealth enforce the requirement in some 40 visa subclasses that visitors have appropriate health insurance so the cost burden can be shared with insurance companies, and take into account previous unpaid hospital bills when considering applications to re-enter.

While Immigration Minister Chris Bowen has agreed to review the insurance issue, it is understood the commonwealth has concerns about collecting data on hospital bills.

Enforcing the insurance requirement alone may do to reduce the cost burden on the states. In one case, a foreign student with an eating disorder has required repeated, lengthy stays in a public hospital, and already cost that state government more than $200,000. Health officials contacted the woman’s doctor in her home country, who recommended she be treated there for clinical reasons, but the woman did not want to leave Australia.

Here’s to your health insurance

admin — Thu, 08 Nov 2012 06:00:39 +0000

Largely hidden by the glare of attention on whether the recent Mid-Year Economic and Fiscal Outlook has Australia on track for a surplus in 2012-13 was more evidence of a deeper, long-term truth – Australia’s rising healthcare costs are unsustainable.

The government’s MYEFO announcement that it would index the private health insurance rebate to inflation came with an explicit acknowledgment that the health costs problem is with us now and cannot be avoided.

The government’s proposal, which will reduce its exposure to this particular burden by capping its share of the premiums to a general inflation rate, makes sense in the light of its medium-term fiscal challenges. But will it deal with the longer-term fundamental truth that we are all paying more for a health system that is under pressure and is not delivering a sufficient improvement in health outcomes?

Australia’s health system is good: our outcomes and expenditure are about the middle of the pack of similar countries. But the prospect is that the health system will become stretched too thin.

Treasurer Wayne Swan recognised this when he said in the context of MYEFO that the private health insurance rebate, which costs about $5 billion a year, would grow by 6.3 per cent a year over the forward estimates. By 2022 the rebate would cost $8 billion a year.

Swan described the rate of increase as “unsustainable’’. Health Minister Tanya Plibersek made a similar comment in her explanation of the change, saying that health expenditure was growing at about 6.8 per cent a year.

Health costs are on a trajectory far steeper than other areas of expenditure. One way to deal with this is for government to step back from its current heavy involvement in premium-setting as a mechanism for controlling health inflation, and more actively support health funders to develop a commercially viable model for people to get more effective healthcare.

In other words, we should focus on reforms that ensure health services are not only delivered with better value but also provide better health outcomes for individuals.

Do exclusionary private health insurance products need a re-think?

admin — Thu, 08 Nov 2012 05:29:29 +0000

A recent paper published in the Australian Health Review raises some important policy issues for the future of private health insurance in Australia but has been largely overlooked by the media and in public debate.

The paper is titled Reflections on the role of less-than-comprehensive (exclusionary) private health insurance hospital products in the Australian healthcare system by Dr Peter Thomas, Visiting Fellow at the National Centre for Epidemiology and Population Health, ANU. In the paper Dr Thomas argues that new private health insurance (PHI) products are significantly changing the nature of health insurance in Australia and challenging fundamental tenets of Government PHI policies, such as community rating.

He discusses the rise in popularity of policies which exclude or restrict specific conditions (or types of care) has grown from 5 to 24%. These range from policies which exclude one type of care to those which cover only care required by law, i.e. psychiatric and palliative care and rehabilitation services.

Dr Thomas argues that the rapid growth in these policies has been largely driven by government policy and legislative changes and that their overall impact is to undermine the aims and intentions of many of these policies and regulations. The three specific issues he raises are:

Higher power bills flagged in energy white paper

admin — Thu, 08 Nov 2012 01:08:57 +0000

Consumers who use lots of power at peak times could soon be forced to pay more for electricity, as part of the Federal Government’s plan to cut energy consumption and create a fairer billing system.

Energy Minister Martin Ferguson say there is no quick fix to counter the energy price rises of recent years, but he is challenging the states to introduce reforms which might ease some of the pain.

Today he releases the Government’s long-awaited energy white paper which calls for an overhaul of electricity pricing and for innovations to allow customers to better manage their energy use.

“Pricing structures are resulting in inefficient peak demand,” Mr Ferguson will say in a speech to be delivered later today.

“This means that additional capacity is required to be built that might only be used for one per cent of the year.”

He says demand-based pricing and smart meters will help overcome that problem, and allow consumers to monitor their energy use more closely.

Mr Ferguson concedes that many of the ideas included in the white paper will need the cooperation of the states, and he is urging them to take a bipartisan approach to the issue.

“This will require making some hard decisions and sometimes overcoming populism for what is in the long-term interests of consumers,” Mr Ferguson will say.

The policy paper paves the way for tough negotiations between the Commonwealth and the states – the first is set for next month’s Council of Australian Governments (COAG) meeting.

Mr Ferguson will unveil the white paper in Victoria – a state he says is a model for energy sector reform.

His Opposition counterpart Ian Macfarlane has welcomed the move.

“Victoria now boasts the lowest transmission charges in Australia because there is a privatisation of the network,” he said.

“So we need to encourage the states but you won’t get the states to do what needs to be done by politicising the issue as Julia Gillard has done or by waving a big stick at them.”

Labor takes aim at power bills

admin — Wed, 07 Nov 2012 23:08:05 +0000

The Australian: The major shake-up which would do away with retail price controls set by state-based regulators and allow energy retailers across the nation to set their own charges will be hammered out by Julia Gillard and state leaders at next month’s meeting of the Council of Australian Governments.

It could involve a roll-out of smart meters, which would allow consumers to avoid high tariffs during peak periods such as hot spells in summer.

Releasing the final energy white paper today, Resources and Energy Minister Martin Ferguson will also reject policies of reserving gas for local industry and declare that Australia must cut the costs on resources projects if a $230 billion pipeline of works is to be delivered.

Cost of energy target revised downwards

admin — Fri, 02 Nov 2012 00:20:01 +0000

A MODELLING error has forced the Climate Change Authority to significantly revise down its cost assessment of the renewable energy target on the average Australian household.

The correction from $104 to $62 in extra costs for the 2012-13 year came after Labor’s chief whip, Joel Fitzgibbon, said consideration should be given to lowering the target given the introduction of a $23-a-tonne carbon price.

There is at present bipartisan support for the RET to make up 20 per cent of Australia’s electricity production by 2020 and Climate Change Minister Greg Combet has said the measure works alongside the carbon price to drive investment in renewables.

“The modelling for the Climate Change Authority indicates that the compliance costs of the RET go up by an additional $13.2 billion to 2030 if the carbon price was repealed,” Mr Combet’s spokesman said.

Choosing the best iPhone 5 deal

admin — Fri, 02 Nov 2012 00:04:58 +0000

The iPhone 5 has been out for around five weeks now and deciding on which iPhone 5 deal is best for you can be a tough task. With all major Australian mobile providers offering the iPhone 5, the options and choices are in abundance.

To take full advantage of the iPhone 5′s hardware upgrades, the obvious choice would be to go with a provider with a 4G network. Both Optus and Telstra have launched the iPhone 5 on their high speed LTE (long term evolution) networks. With lightning fast web browsing and downloads you can really see the difference in speeds between the iPhone 5 and its iPhone 4 and 4S predecessors. Vodafone have also upgraded their existing 3G network and have launched their upgraded ’3G+’ network which is capable of up to 8x the 3G speeds of their regular network. Vodafone will launch their own 4G network in early 2013 which the iPhone 5 will almost definitely be compatible with.

With value for money also a very important factor when upgrading or switching mobile providers, Virgin Mobile are offering some very competitive deals across the entire iPhone 5 range, however they do not currently not offer the use of Optus‘ 4G network to their iPhone 5 customers as they do with their Samsung Galaxy S III 4G deals.

If you would like to see a detailed and simple breakdown of iPhone 5 deals currently on offer, head over to youcompare.com.au and check out our dedicated iPhone 5 page where you can easily compare current iPhone 5 deals and find a deal that suits you.

Healthcare founder’s warning on rebate cut

admin — Thu, 01 Nov 2012 05:25:00 +0000

PRIMARY Health Care founder Ed Bateman has warned that cuts to the private health insurance rebate would lead to a short-term fall in demand but says the change is welcome nonetheless.

Dr Bateman said the cuts would squeeze private health insurers and spur consolidation of an industry that has grown used to annual increases in premiums averaging 6 per cent during the past 15 years.

“There is no efficiency in the (private health insurance) industry, there is no motivation for consolidation,” Dr Bateman told the Citi Australian Investment Conference in Sydney yesterday.

“I think (cutting the rebate) is a good thing, but in the short term there will be less demand for private health services.”

This week Wayne Swan announced that the tax rebate paid for private health insurance would be capped at the lower end of the consumer price index.
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Dr Bateman said the compounding effect of premium increases 2 per cent above inflation was starting to become a problem for the budget and it made sense to curb the rise by tying the increase to the lower figure.

Interest in Origin’s Victorian wind farm

admin — Thu, 01 Nov 2012 04:52:31 +0000

The three groups are General Electric Co and Downer EDI Ltd, Leighton Holdings Ltd and Suzlon Energy Ltd’s subsidiary REpower Australia, and Xinjiang Goldwind Science & Technology Co and China Three Gorges New Energy Corporation, sources said.

The sale entails the outright purchase of the project, which includes the development and construction of 157 wind turbines in Victoria as well as a power purchase agreement.

In May, Deal Journal Australia first reported that Origin was seeking proposals from parties interested in supplying wind turbines, constructing the wind farm, providing equity for the wind farm’s development or buying the project in its entirety.

http://www.theaustralian.com.au/business/wall-street-journal/interest-in-origins-victorian-wind-farm/story-fnay3vxj-1226507858775

Microsoft launches Windows Phone 8

admin — Wed, 31 Oct 2012 00:53:03 +0000

Microsoft has finally released Windows Phone 8, its latest and long-awaited smartphone operating system. Nokia, Samsung and HTC have all released Windows Phone-based products to coincide with the launch.

Joe Belfiore, Microsoft’s head of Windows Phone, said that the new devices would be “a phone made for you – the most personal smartphone operating system you can get; the perfect companion for your Windows PC and your Xbox”. Among the most notable new features, a new “Kid’s Corner”, providing a “walled garden” of apps, games and settings to provide parents with control over their children’s phones.

Despite the announcement of the new mobile operating system, Microsoft may have a hard time persuading smartphone users to migrate from their current “ecosystem” of choice. Telsyte, an Australian analyst group, said that more than half of smartphone users do not want to switch operating systems when they upgrade their phone.

Read more here
Source: computing.com.uk

Surcharge on smokers a no go

admin — Tue, 30 Oct 2012 23:04:45 +0000

Making private health insurance more expensive for those with unhealthy lifestyles isn’t as simple a fix as it sounds.

As the federal government defends its plans to trim the private health cover rebate, saying it will mean only a small increase in cost for most people, a new survey suggests support for what would be much more expensive health insurance surcharges for smokers, heavy drinkers and the obese.

According to the annual Private Health Insurance Report by financial services researcher CoreData, most Australians think those who lead unhealthy lives should have to pay more for private health insurance, something the federal government doesn’t allow.

CoreData’s online survey of 1213 people found 73 per cent believed smokers should have to pay higher health insurance premiums than non-smokers. Just more than 60 per cent thought heavy drinkers should have to pay more, while 53 per cent said obese people should pay extra.

Three-quarters of the respondents had some form of private health insurance. The survey responses were weighted to reflect the demographics of the Australian population.

However, a health insurance industry actuary, Peter Carroll, says respondents might be underestimating how much extra money smokers already pay in the form of taxes on cigarettes.