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The Australian Council of Social Service (ACOSS) has welcomed the Australian Competition & Consumer Commission (ACCC)’s recognition that sky rocketing power prices and a dysfunctional energy market has left millions of low income households in energy poverty and contributed to an increase in inequality.

The ACCC’s report 'Restoring electricity affordability and Australia’s competitive advantage' acknowledges the current structure of energy market has a negative affect on low income people and is increasing inequality in Australia.

Edwina MacDonald, acting CEO of ACOSS says access to affordable clean energy is an essential service and is critical to economic participation, health and wellbeing.

“We welcome the ACCC’s acknowledgement that we need non-energy market solutions as well as reform across the whole supply chain, requiring a whole of government focus and not just Energy Ministers,” says Ms MacDonald.

“We think the ACCC has got the recommendations largely right, noting that further consumer consultation will be required before many of the recommendations are implemented.

“Disappointingly, there was no formal recommendation to increase the woefully inadequate Newstart payment, despite the ACCC’s acknowledgement that low-income households pay disproportionately more of their income on energy. Newstart is less than $40 per day for a single person and has not increased in real terms for nearly 25 years.

“We must focus on improving a person’s capacity to pay bills. Even with reduced bills, people on low incomes will simply not have enough money to afford the basic essentials of life.

“Also missing is a formal recommendation to support access to energy efficiency for low-income and disadvantaged households, including a mandatory energy efficiency standard for rental properties, despite acknowledging its importance throughout the report.”

ACOSS strongly welcomes the recommendations:

  • To shift to percentage based concessions, including means testing
  • To restricting conditional discounts, like pay-on-time discounts which don’t reflect true costs
  • Develop a grant scheme for consumer and community organisations to provide targeted support to assist vulnerable consumers to improve energy market literacy
  • Develop a mechanism to offer demand response to the market
  • To remedy past over-investment in networks
  • Shift solar schemes to government budget rather than smeared across bills
  • Prevention of market concentration by limiting ownership to 20% of generation capacity
  • Give AER greater powers

ACOSS will look more closely at recommendations:

  • To provide a default-market offer or cap on electricity price. This is a step in the right direction, however we would like to see further consultation and analysis on benefits on alternatives such as the proposal for a Basic Service Offer in Victoria.
  • To accelerate take-up of cost-reflective pricing. We acknowledge tariff reform is needed but are concerned that some low-income households may be worse off and will require targeted support during the transition.

Ms MacDonald says ACOSS is calling for COAG to fund an independent review to establish benchmarks by which energy poverty and affordability can be measured over time.

“If we are to reap the economic benefits and achieve a more equitable society from the ACCC reforms, strong leadership will be needed and vested interests put aside,” she said.

“Yes there will be some hard decisions that need to be made but the overall benefits, as clearly stated by the ACCC, should be the higher consideration to achieve equity for low income households in Australia.”

Source

Related item:

Restoring electricity affordability & Australia's competitive advantage - ACCC

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