Victoria’s leading social, legal, financial and consumer rights’ bodies have united to oppose a dramatic planned rise in power prices across Victoria.
The state’s independent energy regulator, the Essential Services Commission, is proposing a 31% increase to basic power bills this winter.
Such an increase is both unjustified and dangerous, according to an alliance of groups including the Victorian Council of Social Service, Good Shepherd, Uniting, the Brotherhood of St Laurence, the Consumer Action Law Centre, Financial Counselling Victoria and CISVic.
In separate formal submissions and representations to the ESC, the groups argue deliberately driving up power bills this winter — during a rental and cost-of-living crisis — will force thousands of Victorians into poverty, hardship and ill-health.
“People will go hungry, go cold and go without essential items to pay their power bill, with tragic consequences,” VCOSS CEO Emma King warns.
“Energy is an essential service. We shouldn’t price it like a luxury item.”
The proposed 31% increase is part of the ESC’s review of the Victorian Default Offer, which is a baseline, ‘no-frills’ power deal available to all Victorians. The ESC regularly reviews the VDO price, considering cost and market factors facing energy retailers.
In addition to the immense social damage it will cause, the groups say the proposed price hike is unjustified on both technical and economic grounds also.
In their submissions, the bodies critique how the ESC calculates the energy companies’ expenses, and what level of profit the companies deserve to make selling a ‘no frills’ power plan.
The groups say extra Victorian Government support will be needed to help vulnerable Victorians weather the impacts of any price hike.
Direct quotes and contact details:
Consumer Action Law Centre CEO, Stephanie Tonkin (View formal submission)
“The VDO is about fairness and it’s an important safety net helping people who can’t shop around get the best deal for their energy, but a 31% increase in the midst of the worst cost-of-living crisis in a generation is unjustified. I call on the ESC to take a broader approach to wholesale electricity prices in its calculation of the VDO, as well as thoroughly scrutinising retailer operating costs and their profit margins, which shouldn’t be rising in this environment. Victorians are really doing it really tough so I urge the ESC to do all it can to limit this price increase on an essential service.”
Good Shepherd CEO, Stella Avramopoulos (View formal submission)
“A 31% rise in electricity prices will have severe consequences for women and their families, who will be forced to make trade-offs on essentials such as food and medication to keep warm this winter. We have seen firsthand among our clients how higher energy prices, along with other rising living costs, can compound the financial insecurity faced by family violence victim-survivors, compromising their independence and capacity to leave an abusive relationship. We urge Victoria’s energy regulator to reconsider its usual approach to benchmark price setting this winter and put the needs of families above energy company balance sheets.”
Brotherhood of St. Laurence Executive Director, Travers McLeod (View formal submission)
“This proposed increase to the Victorian Default Offer will send more households into deeper energy stress, pushing some to skip meals, turn off the heater through the winter or sacrifice other essentials. We know the groups hit hardest by energy stress include those on low incomes, people in public housing and people with disability or a chronic health issue, who are already doing it tough without the added stress of this exorbitant price increase.”
Financial Counselling Victoria CEO, Sandy Ross
“To bake in an energy price hike of this magnitude on top of crushing increases in rental costs, mortgages, food, and medical costs will cause enormous hardship and vulnerability in our struggling communities.”
CISVic Executive Officer, Kate Wheller
“Every day, we are supporting people who are living on the edge, unable to meet the most basic costs of daily living. Energy costs are already a key driver of this hardship and people are having to make decisions in the colder months about whether to ‘heat or eat’. The proposed increase would create financial hardship that neither the individuals nor the services attempting to support them could tolerate.”
Uniting Senior Manager, Matt Cairns
“This proposed price hike is unacceptable. Our consumers are already being forced into choosing between essentials, such as medication or food, and keeping the lights on. Whilst we welcome initiatives like the Power Saving Bonus, these solutions do little to help our consumers in the long-term, particularly if they are hit with a 31% increase.”
Consumer Action Law Centre. Mark Pearce, 0413 299 567