Rising Energy Debt needs urgent Government action

ACOSS calls on the Federal Government and energy retailers to urgently provide financial support to people on low incomes who are in crippling energy debt and facing skyrocketing energy bills, after new data shows further increases in energy debt levels.

According to data released yesterday afternoon by the Australian Energy Regulator (AER), an increasing number of customers remaining in debt on their energy bill for longer, many for more than two years, whilst the amount of debt they are carrying has also increased.

Since March last year, average debt for customers not on an energy retailer hardship plan increased from $1023 to $1060 and for customers on a hardship plan from $1649 to $1734, with 26 per cent of customers having debts of more than $2,500, compared to 21 per cent.

ACOSS Acting CEO Edwina MacDonald said

“We have a range of structural problems and a new energy price crisis that are pushing people with the least into further debt and deprivation.

“People who are locked out of paid work, on JobSeeker at $46 a day and living in energy inefficient homes have little hope of repaying $1,734 energy debt, and will struggle to afford their next energy bill, let alone be able to heat their home this winter.

“We know people on low-incomes are already depriving themselves of energy by not heating their homes, not cooking or using hot water, and going without food or medicines to afford their energy bills, which is seriously affecting their health and wellbeing.

“There is a critical opportunity for this Government to work with retailers to provide emergency energy debt relief before debt spirals out of control and becomes impossible to manage.

“To immediately reduce debt, ACOSS is calling on the Federal Government to urgently provide up to $2,000 per customer experiencing payment difficulties via an emergency payment.

“As this measure will help relieve debt for energy retailers, we expect retailers to also step up and provide additional relief to those customers with debts greater than $2,000, and help customers reduce their bills going forward.”

ACOSS is also calling on the Federal Government to address the drivers of energy debt, including:

  • Lifting social security payments to ensure people can cover living costs including raising JobSeeker, increasing Rent Assistance and providing supplements for people with a disability as well as single parents.
  • Invest in energy efficiency and solar retrofits for low-income homes.
  • Require the AER to review and improve energy retailer Customer Hardship Policy Guidelines to ensure earlier intervention is provided to at risk customers.

See AER media release here for further detail on energy debt.