SA businesses keen on nuclear as energy prices bite
Hydrogen power has fallen out of favour for South Australian businesses which seem keen on the potential of nuclear energy amid spiking electricity prices and low confidence.
The South Australian Business Chamber’s latest survey of business expectations shows stronger confidence locally compared to the national rate, but despite improvement the key figure remains below the neutral score of 100.
At 93.8 points, South Australian confidence in the December quarter was up 7.5 points from the last quarter and was above the national confidence rate of 84.4 points.
But business confidence in SA has sat below the neutral score of 100 since December 2021, with just 21.7 per cent of respondents to the Chamber’s survey saying they believe the state’s economy will be somewhat stronger over the next year.
Respondents cited the cost of doing business as the main issue affecting their business, with 75.1 per cent noting that was top of mind.
“No matter what sector, no matter what size business, the cost-of-doing-business was their number one key concern right now,” SA Business Chamber CEO Andrew Kay told InDaily.
“When you start to unpack that, what are the cost concerns? Wages, cost of materials and inputs, cost of insurance, cost of energy.
“We see that businesses have now experienced three or four consecutive years of energy price increases. That cumulative effect of year-upon-year energy price rises are hurting businesses.”
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Profit margins (54.8 per cent), government policies (50.5 per cent), staff and skills shortages (44.7 per cent), and economic factors (41.6 per cent) round out the top five issues affecting SA businesses, according to the survey.
Further, 24.3 per cent of respondents said their electricity bills increased by between 11-20 per cent over the past 12 months, showing ongoing cost increases “remain significant and continue to put upward pressure on prices”.
Kay said he expected conditions would “remain tough for a while” for SA businesses.
“The first interest rate cut won’t make a significant difference to the hip pocket, but it will improve confidence and sentiment, which is always a good thing,” he said.
“We’ll probably need to see another one or two hit before we really start to see it kick in.”
Ahead of the Federal Election, which is fast becoming a referendum on the future of nuclear power in Australia, the Business Chamber questioned respondents on their thoughts on the power source, noting its own “fuel-source agnostic view”.
While solar – by a considerable margin – had the most support among SA businesses (78.8 per cent), nuclear secured the second highest rate of support at 64 per cent.
This was followed by natural gas (63.6 per cent), wind (58.1 per cent), and hydrogen (52.1 per cent).
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Support for hydrogen has fallen significantly by 9.4 percentage points in the space of 12 months, with the survey notably completed before the state government last week dumped its green hydrogen plans following the administration of the Whyalla Steelworks.
On nuclear, respondents were in favour of repealing the moratorium on nuclear power in SA (66.5 per cent), and the perceived benefits outweighed the concerns for the energy type.
The survey shows 67 per cent said nuclear would mean the state would be less reliant on other states for power, 64.4 per cent said it would mean the state could use existing uranium resources, and 64.2 per cent said it would result in investment and job creation.
Just half said lower costs were a benefit of nuclear, while 29.7 per cent said they had no concerns with the power source.
Meanwhile, the concern of nuclear waste was only an issue for 59.1 per cent of respondents, while the initial cost of establishment was a problem for 57.4 per cent and the possibility of an accident was an issue for 42.6 per cent of respondents.
Kay said he “wasn’t entirely surprised” by the response to nuclear.
“We’ve been hearing that in our discourse with members over the last year or so and certainly in public debate around energy of late nuclear seems to be becoming somewhat more prominent in the conversation,” he said.
“What’s interesting is that South Australian businesses are open to a mix. Solar still remains comfortably number one and that makes sense because our survey tells us that more than half of the businesses in this state have solar panels on their rooftop.
“It’s also worth noting that nuclear does still polarise. It also had the highest number of people strongly disapproving – one in five businesses disapprove.”
Kay said businesses were also concerned about cutting red tape, and that the Chamber was still calling on the state government to take action on payroll tax.
“Concern with payroll tax hasn’t change in this survey,” he said.
“When we asked businesses to give us something that the government could do to make their lives easier, certainly payroll tax and taxes in general were strongly commented on by businesses.
“They’d like to see, at the very least, the payroll tax threshold lifted – which hasn’t been moved since 2019.”
