Affordability remains major issue for Australians: AER

Australian households are still wrestling with the impact of high energy prices according to the Australian Energy Regulator’s (AER) Affordability in Retail Energy Markets report released today.

The report provides a high-level analysis of energy affordability in Victoria, New South Wales, Queensland, South Australia, Tasmania and the Australian Capital Territory with a particular focus on low-income households.

The AER assesses energy affordability based on how much of a household’s disposable income is spent on energy bills.

“Our report finds that low-income households on the median market offer spend twice as much of their disposable income on energy as the average household,” said AER Chair Paula Conboy.

The report demonstrates that while energy affordability remained largely stable across the jurisdictions in 2019, there were some areas of modest improvement.

But Ms Conboy said it is too early to tell whether the data represents a change in the energy landscape:

“We need more data to be able to say that this indicates that a widespread shift for the better is underway. It is nice to see some positive numbers but for many people, especially those in vulnerable situations, the situation remains very concerning.”

The report demonstrates that in a time of restricted income growth, finding a cheaper offer if possible is the key tool at the public’s disposal to reduce their energy spend.

“The best way for people to reduce their energy bills is to seek the best possible deal for their circumstances using our free and independent price comparison website Energy Made Easy,” said Ms Conboy.

People who are having difficulty in paying their bills should talk to their retailer immediately to seek assistance.

“It is vital that people ask their retailer for assistance before debt gets out of hand. Retailers are required by law to offer assistance to customers who find themselves in hardship.

“It can be a difficult conversation to start, and hard to know where to turn for help. If you know you’re going to have trouble paying an upcoming bill, or your debt is mounting, call your retailer and ask them to help you. As long as you are in a hardship program and meeting its conditions, you cannot legally be disconnected,” said Ms Conboy.

The AER released the Customer Hardship Policy Guideline in March to bring greater clarity and consistency to the support retailers are required to provide and outlines new penalties will apply where retailers fail to meet their obligations.

The report also contains some initial analysis on the impact of the Default Market Offer.

About the AER

The Australian Energy Regulator (AER) works to make all Australian energy consumers better off, now and in the future.

  • We regulate electricity networks and covered gas pipelines, in all jurisdictions except Western Australia. We set the amount of revenue that network businesses can recover from customers for using these networks.
  • We enforce the laws for the National Electricity Market and spot gas markets in southern and eastern Australia. We monitor and report on the conduct of energy businesses and the effectiveness of competition.
  • We protect the interests of household and small business consumers by enforcing the Retail Law. Our retail energy market functions cover New South Wales, South Australia, Tasmania, the ACT and Queensland. We do not set the prices consumers pay.

We drive effective competition where it is feasible and provide effective regulation where it is not. We equip consumers to participate effectively, including through our Energy Made Easy website, and protect those who are unable to safeguard their own interests. We use our expertise to inform debate about Australia’s energy future.

Issued date: 
5 September 2019
AER reference: 
NR 18/19
General enquiries - Market performance