
Businesses Struggling To Keep Doors Open As Energy Costs Surge
That's the main take-out from a new survey carried out by the Auckland Business Chamber, together with policy and advocacy organisation the Northern Infrastructure Forum (NIF). Survey responses were garnered mainly from SMEs in the Upper North Island, with manufacturing the most heavily represented sector.
Chamber CEO Simon Bridges says the survey findings show that energy costs are right at the top of the list of concerns for businesses, in what is a very challenging operating environment.
'Nearly 90% of respondents say that energy costs have increased in the past year, and just under 50% describe those costs as highly concerning. When energy costs combine with the pressure from weak market demand, inflation and increased compliance costs, the result is that many businesses are struggling to keep their doors open.'
Mr Bridges says one unexpected, and troubling, insight from the survey was the reluctance on the part of businesses to be identified when sharing their struggles with energy costs, for fear of commercial repercussions.
'Many of the businesses we spoke to – especially those dependent on gas supply – were really uneasy about speaking publicly, for fear that it could jeorpardise their ability to secure future energy contracts with the gentailers, who control close to 85% of the retail market. Whether this fear reflects an actual or perceived risk, it points to serious issues with the way market power is being exercised, and is really worrying.
'It's high time the Government had a good, hard look at the vertically integrated gentailer model, and the impact it's having on the performance of the sector.'
NIF Executive Director Barney Irvine says the survey results also underline the drag that energy costs are placing on New Zealand's growth and productivity, and on people's livelihoods.
'As a response to rising energy costs, 52% of business surveyed say they have increased the prices they charge to customers; a quarter say they cut back production; the same proportion say they have laid off staff; and just under 20% have cancelled or deferred investment. Unnecessarily high energy costs impact on everyone.'
Businesses are looking to the Government for leadership, he adds.
'Over three-quarters of survey respondents believe that the Government should treat addressing energy costs as a high or very high priority, and they're absolutely right.
'The Government has a good sense of what needs to be done to turn the performance of the sector around for the long-term; what's needed now is swift, decisive action.'
In particular, the Chamber and NIF want to see the ten-point Energy Action Plan they launched in February this year – which focused on strengthening sector stewardship, improving resilience, and increasing generation and competition – incorporated into government policy.
Key findings from the survey include:
Nearly 90% of respondents say that energy costs have increased over the past year, with over 40% reporting that the increase has been large or very large
Just under 50% of respondents describe energy costs as highly concerning (i.e., a rating of 8-10 out of 10), similar to the level in concern in relation to market demand, inflationary pressure and compliance costs
Over 60%% report an impact on their business as a result of rising costs, with 34% describing the impact has as large or very large
As a response to rising costs, 52% of respondents say they have increased their own prices, while 25% report having cut back production, and the same proportion report having laid off staff. Just under 20% have cancelled or deferred investment
Over 80% expect prices to increase again in the year ahead

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


NZ Herald
a day ago
- NZ Herald
Covid inquiry: Time to cut Dame Jacinda Ardern a break – Fran O'Sullivan
Sowing dissension when this country could more usefully focus on setting an ambition that might persuade more talented New Zealanders to build their futures here instead of heading for the departure lounge. Fact: Ardern has agreed to give evidence to phase two of the Royal Commission of Inquiry into the Government's response to Covid-19. If she cares deeply for her reputation – and I am sure she does, given the global acclaim that has come her way after her memoir A Different Kind of Power – she will agree to do that in public during the commission's hearings. Ardern doesn't have to come back to New Zealand for that. If the commission calls her – and it should – it can take evidence via Zoom as is now commonplace in transnational court hearings. Subjecting the former Prime Minister to running a gauntlet of personal and potentially physical abuse by insisting she gives evidence in New Zealand will just set off another wave of paranoid behaviour. It won't help in getting to the facts and motivations which coloured prime ministerial decision-making in the Covid years in the dispassionate manner that is needed. The economic trade-offs where the money printers went overtime and dollars were flung at business – critics lament that now. The country has a debt bubble to digest. But it is notable that some critics come from companies that took the Government's financial handouts but did not remit them back when their fortunes improved. The shareholders were winners. The taxpayers were 'tail-end Charlie' here. Go figure. Commission chair Grant Illingworth, KC, has said the inquiry will take public evidence from those affected by 'social division and isolation, health and education, and business activity'. This is important so New Zealand can learn the hard lessons from the Covid-19 pandemic and craft strategies for when the next pandemic arrives, as it certainly will. It will also provide a bloodletting for those who were most cruelly affected by the former Labour Government's Covid policies. Hearing from the 'victims' is long overdue. And there are personal stories aplenty, as most can attest. The commission also wants to hear from key decision-makers (and experts) about major decisions and their consequences so lessons can be learned. But the inquiry would be incomplete without hearing from Ardern, former Finance Minister Grant Robertson, former health supremo Sir Ashley Bloomfield and others within the tight Beehive circle that ran the country during the Covid years. It is undeniable that Ardern's performances at the 1pm 'podium of truth', where she and Bloomfield updated daily on the latest Covid situation, were required viewing. Her most impressive attribute was her mastery of that press conference. Her coining of the 'team of five million' (drawn from the late Sir Peter Blake's slogans to build public support for his America's Cup campaigns) to unite New Zealanders in 'fighting the virus' was also masterful. And it worked – at least in the initial phases of the pandemic response. People stayed home. The hospitals were not overrun. Lives were saved – although it is noticeable that the current world Covid death rate statistics show that many other countries did better than New Zealand in the long run. But Ardern's Covid honeymoon was quick to sour. Just one year after she pulled off a historic victory by catapulting Labour to an outright win in the October 2020 election, Ardern's reign hit stumbling blocks. Her Government's tardiness in getting sufficient New Zealanders vaccinated before the mid-August 2021 Delta outbreak helped pave the way for a punishing Auckland lockdown. This was Ardern's toughest year as Prime Minister. Cap that with the politically naive decision not to speak with protesters on Parliament's front lawn – instead of at least speaking with their leaders as commonsense former PM Jim Bolger advocated – and it is not surprising that the tide went out on her prime ministership. It was obvious to anyone coming down from Auckland to Wellington during this period that our political leaders were in a bubble of their own. I went to political journalist Tova O'Brien's farewell from the press gallery on the day we were finally allowed to travel domestically again. It was a different world. No paranoia about drunk citizens hassling or mugging people and acting thuggishly, which had become all too commonplace in the Auckland CBD, where I had spent the past four months. It was all bonhomie and drinks aplenty. The atmosphere also brought into sharp focus the lack of reality that coloured those 1pm press conferences to those watching from Auckland. Bizarre traffic light systems, for instance. The Prime Minister's empathetic response to the March 2019 Christchurch massacre, where 51 Muslims were murdered at the Al Noor and Linwood mosques, had earlier propelled her to international superstardom. The world's tallest building – Dubai's Burj Khalifa – had been lit up with a giant image of Ardern embracing a woman at a Kilbirnie mosque. Her leadership was tested not just by the terrorist attack, but by the Whakaari/White Island disaster and the pandemic. It's ironic that few thank her now for throwing so much money at the crisis. That's the pain of having to pay all that debt back. But there is room to examine all of this dispassionately – not try to (figuratively) hang her again as the more deranged attempted when they wheeled out their noose on Parliament's grounds.

NZ Herald
2 days ago
- NZ Herald
Gisborne seeks Government backing for long-term projects with Regional Deal
Mayor Rehette Stoltz say Gisborne District Council will continue to talk to the Government about its Regional Deal and possible investment. Gisborne District Council has submitted a Tairāwhiti Regional Deal proposal to the Government under a new initiative setting project priorities over 10 years. Regional and City Deals are a central government initiative to establish long-term agreements between central and local government. Earlier this week the Government announced the signing of


Scoop
3 days ago
- Scoop
ASB Welcomes Anti-Scam Alliance
ASB is welcoming the launch of a comprehensive Anti-Scam Alliance which it says is a positive move in the fight against fraud and scams. Chief Executive Vittoria Shortt says while the banking sector has invested significantly in fraud and scam prevention, detection and awareness for many years, having a formal alliance between Government, police, consumer groups and a range of impacted industries will make a real difference. 'Banks and telcos have been working very hard, both individually and together, for some time, to tackle fraud and scams. We've partnered with others in the industry like consumer groups and police, but the real power comes in a true all of ecosystem approach, as Minister Simpson has announced today. 'We're pleased to see digital and social media companies join the charge. Each member of the alliance brings unique skills and experience which will improve our collective ability to fight fraud and scams. The formal involvement of Government will also enable stronger collaboration and commitment and more resource and expertise so we can continue to work together to keep New Zealanders safe.' ASB has spent around $140 million fighting fraud, scams, financial crime and cybercrime this financial year, and has invested in a number of customer initiatives. This includes tools such as Caller Check, which was launched in March and combats bank impersonation scams, and ASB's 24/7 fraud line, which has received more than 21,000 calls outside of regular bank hours since it was launched in February. The industry has also been working closely together on Confirmation of Payee and increasing information sharing to better target money mules as part of ongoing collaborative work. 'We know there is still more to be done, but today's announcement is another step forward and we will continue to build on the work we're already doing in this space,' says Shortt. ASB Bank Helping you get one step ahead. In 1847, ASB opened as the Auckland Savings Bank with the pledge: 'to serve the community; to grow and to help Kiwis grow'. And that is very much what ASB is about today. ASB is a leading provider of integrated financial services in New Zealand including retail, business and rural banking, funds management and insurance. ASB strives to consistently provide its customers with outstanding service and innovative financial solutions. They're dedicated to providing simple financial products that allow their customers to bank with them how and when they want. We all have our own ways to measure progress, and our own stories about the things that matter to us. Whatever way you choose to measure progress, and whatever your goals, ASB is there to help you get one step ahead.