South Australia’s power prices crippling business

Den Tucker, the MD of DM Plastics and Steel, explains about the pressure on his business following business closures in South Australia due to out of control power prices

Introduction: South Australias power prices crippling business

Ross Greenwood: I told you last night on the program about a South Australian plastics recycling business that’s closed as a result of a $100,000 a year increase in its power bill. This company is called Plastics Granulating Services. I actually spoke to the company and what they’ve seen is the monthly power bill has increased from 80,000 AUD a year 18 months ago to 180,000 AUD right now. 80,000 a month get that to a 180,000 AUD a month. I spoke to the managing director Stephen Scherer today. He’s indicated probably given the fact they’re in administration or they’ve been told basically they’re not to really talk too much with liquidators in there, but I thought what I might do is try and talk to one of his customers.

Den Tucker is the managing director of DM Plastics and Steel that’s been using the plastics recycling services of Plastics Granulating Services for quite some time. Uncertainty is almost in the same position. Good day, Den. How are you doing?

Interview: Den Tucker – Managing Director of DM Plastics and Steel

Den Tucker: Good evening. Yes, we’re putting up with extreme increases in power costs and there seems to be no light at the end of the tunnel.

Ross Greenwood: Just explain to me what’s your power usage like and what are your bills then?

Den Tucker: We use roughly the same amount of power and it’s gone up by roughly the same amount.

Ross Greenwood: The problem would be Den as a business owner, that’s money that’s coming straight out of your pocket. That’s profit. That might be ultimately what you’re using to feed your family.

Den Tucker: No, it’s not actually the profit. It’s more from the profit as opposed as that’s clearly the actual face value of the company over the last period of time. After that we’ll pick up our business and take it overseas, have a benefactor, and send it back to Australia. That then all of 48 people who work for me, I cannot let go. That I don’t think is what’s the most ideal situation.

Ross Greenwood: It’s not the ideal situation. You’d have to think that the State government, the Federal government, any person who’s working for you, their families, you yourself. Nobody would want that outcome but the fact is because of the energy policy of South Australia and because of the persistent increase in the energy prices. Well, you’re a business person, ultimately there comes a point at which you can’t go broke simply because the energy prices are ridiculous in regards to what you’re paying.

Den Tucker: That’s exactly what happened to Plastic Granulating Services. There is an option however the government is saying good to pull the sellers down here and that is to produce now the clean form of nuclear energy called thorium molten salt reactors. Produces power for a thousand times cheaper than what you get the present time. Everybody in the right in the places that should be looking at that is keeping their head in the sand.

Ross Greenwood: In regards the government, our ministers have been a slow-moving car equation. Sort of though it’s something that’s happened instantly but it’s also because of the 50% renewable energy target that’s out there that’s driven the prices higher. It’s not as though people haven’t warned the South Australian government. When business people such as you talked to the South Australian government and your own politicians in your area, what sort of response did you get?

Den Tucker: I think all clean coal or things like that or or solar wind. We run 24, five or six. These options aren’t satisfactory. There is a far better option available on their doorstep. China or India now will have that method of power generation by 2020.

Ross Greenwood: Den what do the politicians say when you say, “Listen, if we can’t cope with these soaring power bills that you’ve got to and we employ 48 people and we could take our operation overseas.” What sort of reaction did you get from the politicians then?

Den Tucker: Again, buried head in the sand. They make promises that aren’t able to be kept. The most recent one was the Clean Coal option. They don’t have an answer. They do not have an answer.

Ross Greenwood: It’s just so frustrating, I’m going to tell you. Jobs are lost. Say, for example, Plastics Granulating Services gone out of business. A lot of people have lost their jobs there as a result of these rising energy prices you’re hearing from Den Tucker here who’s got a business, 48 people, could move it overseas, could close it down. 48 people lose their jobs and the politicians shrug their shoulders and say sorry.

There might be another answer coming down the track. Bloody fools, they really are. It’s just ridiculous, this. Den, this is the problem of running business. When your natural advantage should be cheaper energy prices than other people in other parts of the world, and you suddenly find you’re settled with some of the most expensive energy in the world.

Den Tucker: Absolutely. Yes. How do we become an exporter when we can’t even supply to our own people? Don’t carry on that we don’t have the same problem are happening over in Melbourne. You’ve got Hazelwood shutting down. The same problems are going to occur over there.

Ross Greenwood: Certainly. Last year we had sort of aluminium smelters in Tomago and Newcastle threatened to be closed down. Portland as well had problems. Tell you what, it is a fundamental problem and Den Tucker is just one small example of something that is much much bigger in our community. It is a fundamental and very significant problem. You can’t have politicians as easy as stickomh their heads in the sand and just ignoring it, hope it goes away because it’s a real life problem if you suddenly have your energy bill go up by a 100,000 bucks a month. That’s more than the money you’re making in the business.

Den Tucker, I appreciate your plight and I don’t know I can do terribly much myself about it, but the fact is something needs to be done and done quick smart. We appreciate your time.

Tim Gurner “When I was buying my first home, I wasn’t buying smashed avocado for $19 and four coffees at $4 each”

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