Energy price rises due to policy uncertainty hurt poor most – report

Energy price rises due to policy uncertainty hurt poor most – report

Low-income and disadvantaged Australians are bearing the brunt of energy price rises caused by policy uncertainty, a new report has found.

The Australian Council of Social Service and the Brotherhood of St Laurence have warned they are receiving harrowing reports since steep rises in wholesale energy prices began in mid-2016.

They say struggling families are having their gas and electricity disconnected, or going without hot water because they can’t afford to get their systems fixed.

The report – co-authored by Acoss, the brotherhood and the now-closed Climate Institute – calls on the government to provide investment certainty by implementing climate and energy policies in line with its commitment to the Paris agreement.

It also recommends reviewing laws that allow disconnection of households that cannot afford their bills; making it easier for at-risk households to access rooftop solar and energy-efficient products; and improving the energy efficiency of public and community housing stock.

The report also warns the current transitionto decentralised energy sources, including household batteries and small-scale solar, is shutting out low-income Australians.

“Put plainly, there are concerns that, without significant policy and regulatory reform, the future energy market will create a two-tiered system that favours those who can access and afford distributive energy resources (such as solar panels) and those who cannot, further widening the gap between the haves and the have-nots,” the report says.

“This inequity is further exacerbated when incentives to support the uptake of distributive energy are recouped in a regressive manner through electricity bills, rather than more progressive means, such as from government budgets.”

The Australian Competition and Consumer Commission is investigating rising electricity prices, acting on a request from the Coalition in March, and has demanded energy retailers disclose their profit margins, according to News Corp.

Acoss’s chief executive officer, Cassandra Goldie, said the report’s 17 recommendations focused on delivering cheaper clean energy, empowering consumers, improving household efficiency and strengthening households’ capacity to pay bills.

“Efforts to provide access to affordable, reliable and clean energy are failing and low-income and disadvantaged households are bearing the brunt,” Goldie said.

“Governments must listen to people’s very deep concerns about energy prices and make the transition to clean energy equitable and affordable for everyone.”

The report was produced after consultation with 120 experts across Australia between March and June this year.

The Brotherhood of St Laurence’s head of energy and climate change, Damian Sullivan, said the report’s recommendations, if adopted, would provide immediate relief for families and reduce power bills over the long term. “We hear harrowing accounts of the impacts of higher energy costs,” Sullivan said.

“Unless there is a nationally coordinated plan that is fair and inclusive – and far better integration between climate, energy and social policy – vulnerable households will be left behind.”

It found that 40% of households whose financial situation worsened in the past six months attributed their financial stress to the rising cost of necessities. Households had been hit with bill shock in the first half of 2017.

“While retail inflation is low in general, hikes in the cost of necessities such as fuel, household gas and electricity are the biggest worry for over 40% of households,” the report says.

The report, a survey of 1,500 households, also found inequality in Australia was worsening.

It found that 45% of households earning less than $40,000 had seen their incomes reduce. At the same time, 46% of those on $100,000 or more experienced rises to their income.

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