Governments must do more to provide relief to people on low incomes struggling with the cost of energy bills.

25 May 2023

ACOSS is calling for further government action to protect those on the lowest incomes who are struggling to pay their energy bills, following news that electricity prices could increase up to 24%.

Today the Australian Energy Regulator (AER) released its final determination for the electricity default market offer (DMO) for NSW, SA and QLD, announcing increases between 21-24% depending on network area people live in.

ACOSS CEO, Cassandra Goldie said:

“Today’s announcement of another increase to electricity prices is a blow for people on the lowest incomes, who already copped significant rises last year.

“The projected increase of up to 24% could have been even higher if not for the Albanese Government’s energy price cap at the end of 2022. This cap is working and needs to be extended to at least 2025.

However, for people on the lowest incomes, these price increases are still far too high, with people already experiencing energy debt, disconnection, and facing homelessness.

“The energy relief package announced in the Federal Budget, while welcome short-term relief, will barely cover last year’s electricity price increase let alone this year’s increase. The increases to income support won’t be nearly enough to stop people going without the basics.

“We are extremely concerned that as a consequence of rising energy bills, people will be forced into further destitution.

“Governments must step in to do more to provide income and debt relief now for people with the least and to prevent future price increases.”

ACOSS is calling on: 

  • The Federal Government to update its guidelines to the Australian Energy Regulator to set the Direct Market Offer at an efficient price by lowering retail margins, as is done in Victoria. This would ensure people do not pay more than is required for an essential service.
  • The Federal Government to extend the cap on wholesale gas to 2025.
  • The Federal Government to lift Jobseeker and related payments to at least $76 a day to ensure that people can cover living costs, and to double current rates of Commonwealth Rent Assistance to reduce rental stress.
  • The Federal Government to work with energy retailers to provide debt relief for customers in energy hardship
  • State and territory governments to join the Federal Government to invest in energy efficiency, electrification and solar retrofits for low-income housing and institute mandatory energy performance rental standards
  • State and territory governments reform energy concessions to better meet ongoing need, including shifting to percentage-based energy concession, expanding eligibility, and improving access.

Notes on the AER Final determination

  1. The DMO is a maximum price that retailers can charge electricity customers on default contracts known as standing offer contracts. It sets a benchmark for market offers by retailers. If DMO goes up market offers usually follow.
  2. The AER DMO applies only to South Australia, New South Wales and Queensland. Victoria determines its own default market offer (VDO), Tasmania and Australian Capital Territory.
  3.  Proposed residential increases for Ausgrid NSW 20.8% (without controlled load), Endeavour NSW 21.4% (without controlled load), Essential NSW 20.8% (without controlled load), Queensland 21.5%  (without controlled load), and South Australia 23.9% (without controlled load)