This is the text of a speech given by MEFL’s CEO Alison Rowe at the ACOSS “Rise to the Challenge” Conference in Sydney on 29-30 October.
The gap between those who have solar and those who don’t is widening.
It raises the concern around the costs for those who are left behind on the grid; do they pay more for electricity?
Energy poverty impacts more and more Australians, with the most vulnerable members being those on low incomes, including pensioners, students, and concession card holders. This increases when you consider renters and large families.
Retailers need to provide a fair price offer, as at May 2018 there were 5,940 gas and electricity offers in the market, with a large proportion of these having multiple conditions particularly pay-on-time conditions, which we know proves challenging for those who are struggling. The moment there is a late payment, all the discounts come off.
In 2017, 160,000 homes were disconnected. Retailers need to improve their treatment of those in hardship. Over the last 10 years the number of people excluded from hardship programs after non-payments has increased by 32%. In 2016/17 average debt for some entering a hardship program was $1,250. This means they were typically a year in energy debt before seeking help.
Energy poverty affects the elderly or those on low incomes the most. In 2016 there was 1.5 million or 20% of households that have an income of $34,000 or less. Large families on low incomes make up about 1.5% of homes or 42, 000 homes, which is about 200,000 kids.
Energy poverty impacts our future leaders, our students. Not all students are supported financially. The percentage increase for the Newstart allowance over the last decade has been minuscule and the Youth Allowance marginal, nothing like the 80% increase in energy prices over the last 10 years.
80% of the university students we researched don’t believe their retailer is presenting them with the best offer, and 70% are not on a student concession for their electricity.
Our work, our stories
Through our work last year, MEFL visited over 1,600 people in their homes and provided advice to over 5,000 people.
We are working with many families who are experiencing hardship and struggling to meet the basic needs of their family because of high energy bills. One person we have visited has a $10,000 electricity bill; they will never have the capacity to clear that debt. How could someone issue that bill?
Another home we visited had all the blinds drawn, no lighting on, no heating or cooling and the fridge was unplugged. The only way the family is preparing meals is by eating canned food, which they heat up in the microwave. They then turn the microwave back off as soon as they’ve finished using it.
During the work we have undertaken so far, one story stood out in particular, showing how just a simple tariff-intervention can have a real impact. ‘Joanne’ was going through a hard time with her own health problems as well as dealing with her husband entering a nursing home. Joanne was struggling with bills but like many people of her era did not complain and budgeted well to make ends meet, often missing out on things to make sure the bills could be paid.
When we visited Joanne we reviewed her tariffs and found she was not getting a pensioner discount and was only getting a 5% pay-on-time discount. Joanne thought she was getting a good deal as she was with a bigger company and did not understand you could negotiate a rate. We called her supplier and had her pensioner discount reinstated and negotiated a 31% discount.
There are solutions, we need new business models
- Energy efficiency – need to finance this the same way solar is and provide discounts/no interest finance to pensioners/low income households
- Solar Savers – Based on the initial pilot by MEFL and Darebin Council six years ago, the program has expanded to 22 Councils in Victoria. Involves a loan taken out by the Council to pay for the solar for pensions and then paid back through your rates, we need to expand this across Australia
- Government – Fund large scale roll outs for vulnerable communities, programs need to point to those who need it the most
- Solar for Renters Program – Renters are often left out of the programs, our work in Moreland in partnership with SunTenants, Allume and DELWP is proving the model for the future. In Moreland 38% of households are renters and that percentage is even higher in areas like the City of Sydney.
MEFL’s Thought Leadership article
For a more detailed exploration of this topic, see MEFL’s Thought Leadership article, Energy Justice – we need to look after our neighbours.