Energy Poverty

At a glance: 

Energy needed to live a decent life should be affordable and not a source of financial stress and hardship.

More than just the poorest people are having trouble paying their bills. Governments can regulate to encourage energy savings, control prices, and ensure reliable affordable access to everyone.

We can better balance cost and tariffs, give people more information from their energy use, and help all of us to control our bills.

It is possible to protect consumers and the environment. Smart energy policy and regulation can control prices and encourage corporate users and big households to significantly cut power use.


Fact sheets

Key facts on energy affordability in Australia

  Name Date From Description
1: Energy and Poverty in Australia 2012 Uniting for Change How are energy and poverty connected?
2: Why are Energy Prices Rising? 2012 Uniting for Change A factsheet about why energy prices are going up
3: How Are Energy Rules Set? 2012 Uniting for Change How are energy prices set?
4: Ensuring Affordable Energy 2012 Uniting for Change What does UnitingCare Australia recommend?

Background information: Keep informed with our reports, downloadable fact sheets, and shortlisted research

SubmissionsSubmissions made to the Government.

 

Get the facts: 

Connections between energy and poverty

  • On average, low income households use less energy and pay a significantly higher percentage of their income on energy.* These households also have less capacity to reduce energy use than higher income households.
  • The rapid increases in the price of electricity are putting many low and middle income households under significant financial stress.

* For an average household, utilities may be about 2.6 % of annual expenses (ABS data). Average low income households in NSW, however, are spending more than 4% of their income on electricity and gas. Those in the bottom 10% of incomes, are spending on average 8% (NSW Independent Pricing and Regulatory Tribunal).

If energy prices continue to increase at the current rate:

  • about half of low- and middle- income households expect to cut back on buying fresh food or paying other bills.
  • about 35% of these households would cut down on undertaking study or further training.
  • about a third expect to cut back on going to the doctor and purchasing medications.

(From an annual survey undertaken for UnitingCare Australia of about 1300 people each year on energy affordability – the question asked was “if electricity prices doubled over the next five years, what will be the impact on spending on various other parts of your household budget?”)

Evidence of energy price rises

There are several components to the price on a bill, and some are going up more than others. Some reasons for rising prices include:

  • The rules for how large, mostly state-owned businesses who own the electricity poles and wires gain funding for their building and maintenance.
  • The aging infrastructure and the rise in electricity demand at peak times.
  • Lack of competition between private energy retailers, for example in Victoria.

What does UnitingCare Australia recommend for rule-makers?

UnitingCare Australia is working in four key areas for energy affordability, namely

  • Consumer Protection: Implementation of the National Energy Customer Framework by all states, immediately.
  • Energy Efficiency: Moving forwards with currently proposed schemes and working towards better access to mainstream programs, and more in-home services and support for low-income people.
  • Tariffs: Addressing the way the electricity market rules work, and seeking greater emphasis on the impact on low-income households.
  • Direct Assistance: Protecting and strengthening the help available for families who simply can’t pay the bills.

UnitingCare supports specific policy and regulation recommendation in each of these areas, listed in the fact sheet, “What does UnitingCare recommend?” We are currently developing an Energy Affordability Action Plan, for release in 2013 that puts forwards all the actions required to address the current challenge.

The fact sheets in Background Information below provide survey data and statistics on this issue.


 

Background information: Keep informed with our reports, downloadable fact sheets, and shortlisted research

SubmissionsSubmissions made to the Government.

 

What can I do?: 

Get the facts: Read more background and explanations of the current situation with energy and prices.

Talk to family and friends about the issues: Let them know about this site if they are interested in knowing more about the issues or need help paying bills

Share your story: Uniting Care advocates to those in power, about the issues of energy prices. This is not just done through facts and figures, it is important to tell stories of real people’s experiences. If you have experienced large bill increases, or hardship and would like to describe your experience, use the contact form to write to us.

In your story, you might like to talk about:

  • How your bill compares to the same time the year before
  • Whether you’ve been doing any thing to try to save energy at home
  • What state or region you live in, whether you rent or own your house

We will only use your first name, and won’t pass your details on to anyone without your permission.

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