ACOSS welcomes ALP commitment to faster clean energy transition but not enough focus on support for low-income earners

22November 2018: ACOSS welcomes many of Labor’s measures announced today to drive faster clean energy transition but there is not enough to support for low-income earners, who are the ones struggling with high energy bills.

“Climate change is a significant threat to people experiencing poverty and disadvantage and we know that people on low incomes spend a much larger proportion of their income on energy bills than others,” ACOSS CEO Cassandra Goldie said.

“We have been deeply disappointed by the failure of governments to come to grips with climate change and we support Labor’s commitment to greater emissions reduction ambition.

“The right policy settings can deliver both lower emissions and energy affordability. While Labor’s energy policy is a step in the right direction, it can and should go further with better supports for low-income households.

“People on low incomes, who cannot afford energy efficiency upgrades or to invest in solar and batteries, are unlikely to benefit from measures such as the $200 million battery subsidy, as currently proposed. Yet it is people on the lowest incomes who face the greatest financial stress from rising power bills. The lowest-income households spend on average 6.4% of their income on energy, up from 5.6% in 2008, compared to middle-income who spend on average 2.8% up from 2.7% in 2008.

“The battery rebates should be re-designed to target low-income households, including by direct investment in upgrades to social and community housing.

“The slated $100 million for community hubs also has potential to relieve pressures on low-income households, but is not enough to meet the needs of hundreds and thousands of low-income households, and should be significantly increased. Social sector community organisations should be a key partner in the establishment of the community hubs.

“Likewise, additional investment in the CEFC and ARENA should include programs targeted at low-income households and communities and accelerate existing social housing and Aboriginal and Torres Strait Islander community programs.

“Not only should Labor and the Government be supporting low income households through energy policy, they must increase the rate of Newstart, which has not lifted in real terms in 24 years and is not enough to cover the basics of live including electricity bills.”

Elements of the Labor plan announced today supported by ACOSS include:

  • The commitment to pursue a version of the National Energy Guarantee, which will be important to drive large scale transition to clean energy and contribute to reducing electricity prices, but it must be equitable.
  • The framework for a just transition for effected workers and communities. It needs to be fair and consistent with community expectations.
  • The government fund to finance transmission and network upgrades to support the electricity grid cope with a more decentralised and variable energy sources. Shifting the costs to government and away from energy bills will ensure low-income households are not paying disproportionately more of the costs of the transition.

Contact – Monique Vandeleur 0419 626 155

Background information:

A recent ACOSS and Brotherhood of St Laurence report, Energy Stressed in Australia, found that most households have seen little increase in how much of their income they spend on energy over the last decade, except people on the lowest income. The lowest-income households spend on average 6.4% of their income on energy, up from 5.6% in 2008, compared to middle-income who spend on average 2.8% up from 2.7% in 2008, and highest-income households spend on average 1.5%, up from just 1.4% in 2008.

Modelling of the National Energy Guarantee done for ACOSS and BSL found that retail prices will be lower than today’s prices under a 45% and a 65% emission reductions by 2030 scenario. In addition you get bigger bang for buck with higher targets, with doable and almost triple emission reductions for small impact on prices.

Emissions reduction targets greater than 45% reduction target by 2030 are possible and desirable, if combined with energy affordability measures.

For example, implementing the recommendations by the ACCC retail electricity report, as well as increasing Newstart and related allowance payments, and mandating energy efficiency standards in rental properties, plus targeted clean energy programs for low-income households will make a faster transition more affordable.