Submission to the Legislative Council Select Committee’s inquiry into Electricity Supply, Demand and Prices in New South Wales
CPSA's response to the Legislative Council Select Committee’s inquiry into Electricity Supply, Demand and Prices in New South Wales.
CPSA welcomes the opportunity to provide comment as part of the Legislative Council Select Committee inquiry into electricity supply, demand and prices.
As an organisation representing the interests of pensioners and low-income retirees, CPSA welcomes the NSW Government’s Energy Relief Package. With electricity prices predicted to continue rising into the future, this package will provide much needed relief to the most vulnerable households in NSW. CPSA is however concerned that this package is not enough to ensure that electricity will remain affordable for low income households in NSW.
This submission responds primarily to issues relating to vulnerable customers’ interactions with the market and NSW electricity rebate schemes.
Vulnerable consumers and the market for essential services
Electricity is an essential service which all households require to ensure a minimum standard of living. This means that access to electricity should be guaranteed to everyone regardless of the cost. However, significant price increases in the cost of electricity, create a barrier to accessing this necessity, particularly for low income households.
In NSW electricity prices have increased over 66% in real terms between 2006 and 2016, far exceeding growth in the Consumer Price Index (CPI). The large majority of people living on low incomes spend all their income on essential goods and services and don’t have a financial buffer to insulate themselves against increases in the cost of goods and services they need to survive. This is forcing these people to make difficult decisions about how to survive without these necessities.
Research by the NSW Council of Social Services (NCOSS) reveals that low income households are struggling to meet the rising costs of living, with the cost of essential services like electricity a top concern. These households are putting off medical and dental treatment, borrowing money from family and friends and selling personal possessions in order to pay for electricity bills they can no longer afford. The report also highlights that low income households struggling to meet the rising costs of living are much more likely to have their energy disconnected than other households. Disconnections have an immediate and highly detrimental impact on a household’s quality of life. This highlights the abject failure of the market to deliver affordable electricity.