National fund needed to retrofit low-income homes

12 February 2024

ACOSS is calling for the establishment of a national fund to slash energy bills and make
low-income homes resilient to climate change.

A new report finds bolstering energy efficiency, electrifying and installing solar to low-income
housing is a low-cost way to tackle the cost of living crisis and end energy poverty.

“There are about 1.8 million low-income households in Australia who cannot afford to escape
extreme temperatures because they’re stuck in inefficient homes that are expensive to warm or
cool,” ACOSS Climate & Energy Program Director Kellie Caught said.

“They’re either skipping food and medicine or falling further into debt to make it through the
summer. Others have no way to cool their homes, leading to illness and even hospitalisation.

“ACOSS is calling on the federal government to establish a Special Purpose Funding Vehicle to
provide rolling funds for the upgrading of low-income social and private dwellings.

“Funding upgrades to make homes electric, solar and climate resilient will reduce poverty,
protect against heat-related illness, bring down the cost of power and create local jobs while
turbocharging Australia’s emissions reduction targets.”

There are about 400,000 public and community dwellings, and at least 270,000 private rental
households on the lowest incomes.

“Direct government funding for low-income housing would build economies of scale and market
capacity to slash housing retrofit costs across the board,” Ms Caught said.

“The federal government should prioritise investment now to cut household energy bills, and
ensure disadvantaged people and communities are not left behind in the energy transition.”

ACOSS report recommends seven finance and funding options including:

  • Establishing a Special Purpose Funding Vehicle, with an initial federal government
    injection of $2 billion to be topped up by other sources, to provide rolling funds for
    upgrading low-income housing;
  • Creating a seven-year program to fund energy performance and climate resilience
    retrofits for all public, community and First Nations community-controlled housing;
  • Working with state and local government to establish an Environmental Upgrade
    Finance (EUF) program offering long-term and low-interest loans that are repaid through
    council rates;
  • Funding zero-interest loans and subsidies for low-income owner-occupiers, and
    low-interest loans and conditional subsidies to landlords for private rental properties tied
    to minimum energy standards until the EUF is up and running.