Affordable, clean energy

Disadvantaged Australians are vulnerable to high energy prices, which have increased dramatically over the past decade, straining household budgets and forcing many to ration their energy use to the detriment of their wellbeing.

Low-income households spend a far larger proportion of their income on energy than wealthier households, as Energy stressed, recent analysis commissioned by the Brotherhood, shows. Recipients of government allowances are hit particularly hard, with one-quarter of those on Newstart Allowance spending over 10 per cent of their income on energy.

Improving energy affordability and transitioning to clean energy can go hand in hand. However, to achieve this governments need to play an active role.

To ease the burden on households and accelerate the transition to clean energy, Australian governments should take action in key areas.

Introduce ambitious climate change policy and a credible plan to reduce emissions

A decade of uncertainty about climate policy has increased energy prices and slowed the transition to clean energy. Recent research commissioned by the Brotherhood and ACOSS found that appropriate climate policy could simultaneously lower energy prices and drive rapid greenhouse gas reductions.

The Commonwealth should introduce an emissions-reduction policy, in line with a fair global contribution and a maximum global temperature increase of 1.5 degrees Celsius, to accelerate the transition to clean energy and lower energy prices.

Reform retail energy markets

Australia’s dysfunctional retail markets have been a significant driver of price increases, as research commissioned by the Brotherhood has shown.

Meaningful reform of retail energy markets is needed to promote energy affordability for low-income and vulnerable consumers. Reform should include default offers, where government sets a fair price that becomes the default in the market.

Spend more efficiently on electricity and gas networks

Overspending on the electricity grid and gas networks has raised energy prices with minimal benefit to households. Network spending accounts for 43 per cent of an average Australian electricity bill.

Governments must ensure that future spending on electricity and gas networks is efficient.

More of our work is available by viewing our Social Policy and Research Centre climate change and energy topic page .