Australia urged to overhaul energy concessions as low-income residents forced to forgo essentials

<span>Photograph: Dave Hunt/AAP</span>
Photograph: Dave Hunt/AAP

Australia’s hodge-podge, state-based energy concessions program needs to be overhauled and streamlined to make it equitable, the Australian Council of Social Service has said, as low-income residents around the country look to reduce grocery bills and forgo essential prescriptions in order to afford electricity and gas.

In a report released on Wednesday, Acoss argued that most concession schemes, which vary substantially between states and territories and are mostly delivered as a flat rate discount, were “not adequate to meet needs” and led to inequities in assistance, with bigger households receiving less help despite their costs and energy needs being higher.

Mark Goodrick, who lives with his partner, Jennifer, and their daughter in Nambour on Queensland’s Sunshine Coast, told Guardian Australia that, due to rising prices, his family’s energy costs had barely changed in the past couple of years, despite having moved from a draughty private rental to a gold-standard energy-efficient public housing dwelling.

Their previous house was “a glorified tent – you’re basically freezing to death or roasting to death”, Goodrick said.

Goodrick and his family live on jobseeker and carer’s payments that allow them to look after their autistic daughter. They receive Queensland’s electricity rebate, a flat rate worth less than $7 a week.

Goodrick told Guardian Australia that the family economised wherever they could to keep costs as low as possible.

“You’re always looking at the food costs and making sure you’re not buying anything expensive, and buying them close to date so they’re as cheap as possible,” Goodrick said, “And you’re not replacing things you need. I think we went about five years without buying any clothes.”

Acoss CEO Cassandra Goldie said the shake-up was necessary to address the schemes’ ‘flaws and inequities’.
Acoss CEO Cassandra Goldie said the shake-up was necessary to address the schemes’ ‘flaws and inequities’. Photograph: Lukas Coch/AAP

Meanwhile, Michelle Jackson, 56, who lives with her 22-year-old son in outer Hobart, Tasmania, said the gas bills for her public housing property were more than $500 a quarter until the department replaced her gas heater with an electric split-cycle system. They have only now slowly started to reduce, but are still a burden.

“I try and cook during off-peak times,” Jackson said. “I do washing late at night – I’m quite often outside at midnight hanging it out. I don’t use my oven very much because it takes ages to heat up and costs a lot.”

Jackson, who lives with multiple physical conditions that prevent her from working, said she regularly had to choose between which of her prescriptions she filled.

“Some prescriptions you really need but it’s a toss up between what you get and what you hold off,” she said. “I’ve just learnt to live with pain because I can’t afford too many pills.”

Acoss called for state energy ministers to commit to reforming energy concessions, recommending rebates that were means tested and calculated on a percentage of the household bill as they were “more equitable and responsive to change”.

The calls follow a report in November from the Consumer Policy Research Centre estimating more than 35% of Australians eligible for concessions on their energy bills may not be receiving them due to the complexity of the different state schemes and bureaucratic “sludge” in sign-up processes.

Related: Hundreds of thousands may be missing out on energy bill discounts up to $372

The federal government forecast in October’s budget that electricity prices would rise by 56% over the next two years and gas prices by 40%.

Concerns about energy affordability significantly pre-dates the pandemic, with the Australian Competition and Consumer Commission (ACCC) reporting in 2018 that, even then, the high prices for households and businesses were “unacceptable and unsustainable”.

The Acoss chief executive, Cassandra Goldie, said the shake-up was necessary to address the “the flaws and inequities that are preventing those most in need of financial assistance from receiving it”.

“At a time when people are already reducing their energy use in whatever way they can and still finding themselves in debt and unable to cover the basics like food, rent and medicine, it’s critical that energy ministers heed the call in this report for a new approach that better meets households’ needs,” Goldie said.

The report adds to ongoing calls from Acoss and other advocacy groups for the federal government to raise the rate of jobseeker, Austudy and other government welfare payments to at least $70 a day.