Energy market reforms will offer welcome relief to vulnerable Victorian households

20 November 2018

As an organisation advocating for people on low incomes, BSL sees an urgent need to address climate change and its detrimental impacts on our entire community while also keeping energy affordable for vulnerable groups. We have long advocated for action to curb power company excesses, which hit disadvantaged households the hardest.

The package of measures proposed today by the Andrews Government, including reviewing the prices such as vulnerable consumers pay and ensuring they don't pay too much, are welcome interventions. Increasing penalties and toughening up both compliance and oversight of compliance by the regulator, the Essential Services Commission, should also provide much needed ‘teeth’ to ensure energy businesses act more responsibly.

Today's announcement of wider powers to monitor competition and profit margins, we believe, will also help rein in prices. We regularly see householders on low incomes struggling to pay soaring power bills. On hot summer days, we know some older people in poor health who need cooling will forgo it so they can afford to pay their bills. Similarly, in colder months, many poor households, including those with young children, tell us they don’t utilise any heating because of the high cost.

Today’s proposals we believe will secure a fairer market overall, and complement the existing commitment by the Andrews Government to the 11 recommendations of the Independent Review of the Electricity and Gas Retail Markets in Victoria. More broadly, we also note and welcome earlier energy-market proposals from both major parties, including the Coalition's proposal to provide subsidised fridges and televisions to 85,000 consumers and Labor’s solar panel subsidy extension to 50,000 renters, building from the existing focus on 650,000 owner-occupiers.

BSL has been particularly pleased by the Andrews Government’s commitment last month to introduce the Victorian Default Offer, requiring electricity and gas retailers to offer lower-price default offers to all households. Currently, retailers' default standing offers are higher than their discounted offers, which households need to shop around for.

Conny Lenneberg, Executive Director of the Brotherhood, said: “It’s heartening to see that the critical issue of energy affordability is being taken up. At the same time, it’s essential that climate change’s impacts, especially on poor people, are being recognised and acted upon.”

The Brotherhood of St Laurence – which established a research and policy team on climate change and equity more than 10 years ago – has been advocating for reforms for years and our research demonstrates the practical value of taking action for low-income households.