The Energy Debt Crisis

We know that access to cooling at home is crucial for preventing illnesses, hospitalisations, and even fatalities during extreme heat. However, rising energy costs are pushing more people into energy hardship and debt.

The Antipoverty Centre’s report on energy debt, ‘Desperate for Relief’, provides a snapshot into the crisis of rising energy costs and unpaid bills, which is currently at record numbers. For example, major energy retailer Origin has seen a 69% increase in customers on a hardship plan over the past two years. 

A survey conducted by the Antipoverty Centre found that one in five respondents were behind on one or more bills. Electricity was the most common bill that people were behind on.

People risk being stuck in energy debt traps, where they’re unable to switch energy providers or access cheaper plans. This compounds financial disadvantage, with the Antipoverty Centre finding that the people behind on their electricity bill were more likely to be behind on multiple bills (e.g. phone, gas, internet, rent, and water).

Access to a safe, cool home is one of the biggest determinants of health in extreme heat. 

The Australian Institute finds that Australians on low incomes who are older and/or have a long-term health issue are more vulnerable to the effects of extreme heat.

People facing energy hardship risk not being able to manage medical conditions that are made worse by extreme temperatures. 66.6% of those who took part in the Antipoverty Centre’s survey said severe temperatures aggravate a health condition or create safety risk for them. 

Energy Companies are Accountable

As more customers than ever are enrolled in energy hardship plans, major energy retailers continue to report record-breaking profits, partly due to government investment in energy subsidies.

Jay Coonan from the Antipoverty Centre speaks about this inequality:

“We started this report after speaking with people around the time of the first lot of energy subsidies about their energy bills. What were hearing is that a lot of people who are on Centrelink payments are in energy debt, not only because welfare payments are so low, but because energy companies are price gouging at the same time they’re receiving billions of dollars in subsidies.”

While policies to expand clean energy access can help bring down energy bills, it is firstly important to address the crisis of energy debts, as Jay explains:

“People are unable to access schemes for solar or batteries or pay for these housing upgrades because they’re on a very low income or renting. Energy retailers are keeping people in a cycle of debt that grows and grows as prices go up and what this means is that our bills get higher, while other people are able to access solar and batteries.”

 “The most urgent thing for people struggling to live on low incomes is to increase Centrelink payments and then they’ll be able to consider the benefits of solar and battery upgrades and how a clean economy could work for them.”

The Antipoverty Centre, Parents for Climate Action, and Sweltering Cities are calling for immediate action to end the crisis of energy debts to ensure everyone can stay safe in their homes by holding energy companies accountable. For more information, check out the Stop the Bill Shock campaign.