Latest electricity price update shows everyone pays more when poor people struggle
Energy Minister Chris Bowen must act on energy debt waivers to lower energy prices for all
Today the Australian Energy Regulator released updated prices for electricity in its 7th Default Market Offer determination, increasing costs by up to 9.7% for customers in New South Wales.
This is a blow to everyone having difficulty keeping up with continued above-inflation price increases.
Most alarming was the regulator’s explanation that rapidly rising energy debt, which the Antipoverty Centre’s recent Desperate for Relief report shows is largely borne by welfare recipients and other people on low incomes, has fuelled price increases that affect all customers. The AER decision reads:
“We have maintained the approach used in the DMO 7 draft determination using a weighted average of bad and doubtful debt costs reported by retailers… This component has increased in DMO 7 due to growing costs reported by retailers, including bad and doubtful debts and implementation of smart meters.”
The Antipoverty Centre has been calling for debt waivers since October 2024 alongside community sector and climate organisations, which if implemented could have avoided this outcome and resulted in lower energy price increases.
We do not need more useless energy bill relief that lines the pockets of price gouging energy companies without placing any restraints on them to ensure people are not trapped in energy debt. Last financial year, profits for the two largest retailers – Origin and AGL – were $2 billion, while the number of customers on a hardship plan went up by 37.8%.1
Energy Minister Chris Bowen must intervene to protect people in financial distress and everyone who is under pressure from energy costs.
Antipoverty Centre spokesperson and JobSeeker recipient Jay Coonan said:
We again call on Minister Bowen to urgently wipe energy debt and strengthen regulations to stop the cycle.
The so-called cost of living crisis is nothing more than a greed crisis. Large corporations are being allowed to increase their profits BECAUSE they have put people into debt. It’s stated plain and simple in today’s decision from the energy regulator.
The privatised energy market is built to squeeze every last dollar out of people who can no longer take it just to access an essential service. Now we see that the upshot of energy giants trapping people in debt is that they are rewarded by being able to charge higher prices. This is a sign of a sick and twisted system.
The market isn’t broken, it is built this way. We can build it a different way. We should not be allowing these rapacious energy giants to charge above inflation costs.