Affordable essential services should be available to every Tasmanian.
The costs of these services, however, are rising much faster than government pensions and allowances.
We need appropriately designed concessions for electricity, gas, water and sewerage, funded retro-fitting programs and water and sewerage reforms that enable every Tasmanian to lead a reasonable quality of life.
Key points
Every Tasmanian should have a right to access affordable essential services, including electricity, gas, water and sewerage. Significant rises in the cost of essential services, however, are unfairly impacting on those living on a low income, creating fuel poverty and debt.
We need measures to address these price rises and ensure poverty and inequality does not worsen in Tasmania. These measures should include:
· Two-part concessions for electricity, gas, water and sewerage that include a capped percentage of consumption (the cap depending on household size);
· Concessions that are reviewed annually and that increase at pace with price increases;
· Two-part tariff structures that include a relatively larger consumption portion to allow people to save by altering usage patterns;
· Two-part water pricing where only the consumption cost is passed onto tenants (the fixed cost is borne by the property owner);
· Funded home-auditing and retrofitting programs for social housing and low income owner-occupiers;
· Price regulation of APAYG, and continued price regulation of residential electricity customers;
· Subsidised installation of renewable energy generators (such as solar) for low income households, installation of solar hot water in new social housing and gross feed in tariffs at rates comparable to other states; and
· Concessions to enable low-income residents without access to reticulated water services to store adequate water and access water delivery in times of drought.
Essential Services – Out of Reach?
In Tasmania, 34% of the population are reliant on a government pension or allowance to survive and this percentage may increase when the full impact of the global financial crisis hits. People living on a low income spend a much larger proportion of their income on essential services than others, and increases in government pensions and beneficiary payments are lagging behind increases in the cost of living.
Tasmanians use relatively more household electricity annually than other Australians and in particular have a greater demand for heating in winter. Combined with the relatively older and thermally inefficient housing stock in Tasmania, particularly in public housing, these factors mean that Tasmanians on low incomes are particularly exposed to fuel poverty.
Electricity prices in Tasmania have risen significantly in recent years, at a rate much higher than general increases in the cost of living. These rises will continue and become more marked with the introduction of a Carbon Pollution Reduction Scheme.
Water and sewerage prices in Tasmania are also set to rise by 10% annually for at least the next three years. Water and sewerage reforms may result in tenants being billed for water and sewerage services for the first time.
What is needed?
As well as redesigned and comprehensive concessions for electricity, water and sewerage that increase with household size and keep pace with price rises, concessions should also be extended to cover gas, particularly in light of the present Government policy to install gas in many new public housing dwellings.
Essential service tariffs also need to be appropriately weighted between fixed and consumption costs, with a greater weighting on the consumption portion of an account.
This will allow customers to react to price signals and save money by reducing consumption and in the case of electricity, give greater incentive to consume during off peak periods.
Continued electricity retail price regulation is also important for low income consumers in Tasmania. Our household electricity market cannot support retail competition, and any move towards it will lead to poor outcomes for consumers and higher prices. Likewise it is important to include Aurora Pay As You Go electricity under retail price regulation, as a significant proportion of the customers of this service are on a low-income and particularly vulnerable to price rises.
Water and sewerage reforms must be designed to protect the needs of Tasmanians living on low incomes. Metered two-part pricing should be introduced, with the cost of a meter roll-out borne by State Government. Two-part pricing based on customer profiling is inherently flawed and unjust. Furthermore, tenants should not bear the costs of property improvements via improvements in water and sewerage infrastructure. Therefore, tenants should only pay the consumptive portion of a water and sewerage bill, and not the fixed portion.
There is clear evidence that retrofitting and energy efficiency measures can significantly lower household electricity use and result in savings for consumers, also improving quality of life and health outcomes. To achieve these benefits for vulnerable and low income groups, funded retrofitting of social housing, public buildings (including those occupied by social service organisations) and privately owned low-income dwellings needs to occur.
It is also important to encourage the use of renewable energy among people living on low incomes, and enable them to access opportunities to generate their own energy and lower their fuel costs. Subsidised installation of renewable micro-generators, such as solar panels and wind turbines, should be made available to low-income groups. Likewise the adoption of a gross feed-in tariff at a rate comparable to other states would provide added incentive for all Tasmanians to generate their own electricity, reduce emissions, save money and improve their quality of life.
Why two-part concessions?
· Electricity is charged to customers on a two-part basis, which includes a fixed standing daily charge (reflecting infrastructure costs) and a consumption charge for each kilowatt hour used. Soon, all water and sewerage customers will also be charged on a two-part basis.
· Concessions for electricity (and water and sewerage) are currently a fixed amount. This means that the concession is the same for all eligible account holders regardless of household occupancy or consumption needs.
· A pensioner living on their own will receive the same concession as a single parent with three young children. This is not fair or equitable.
To download a printer friendly version of this statement click here.
To download the accompanying media release click here.
You can also view the Mercury's coverage of our proposal here.