Affordable living

You are reading Chapter 2 of 'Delivering Fairness', 2019 VCOSS Budget Submission

Victoria enjoys solid economic and jobs growth,[1] but this hides the 13 per cent of Victorians living in poverty,[2] who can’t afford basics like housing, food and power. One in six people have difficulty meeting basic living costs.[3]

The Victorian Government is taking strides towards easing the cost of living, by cleaning up a confusing and over-priced energy market, investing in public transport and rolling out dental services for public school students. But there is more to do to help people afford the basics.

Victoria can make large-scale investments in energy efficiency for people on low incomes, and make energy market reforms work for the most vulnerable. Investment in early intervention financial counselling is also valuable at a time of high household debt levels, paltry income support and low wage growth.


 Upgrade homes to cut bills and boost wellbeing

Invest in energy efficiency to create affordable-to-run, climate-safe homes for people on low incomes

Around 180,000 Victorian households repeatedly struggle to pay their energy bills, while 45,000 have repeated trouble heating their homes.[4] Energy inefficient housing contributes to sky-high bills, including for those on low incomes, with health conditions and disabilities. This can lead to disconnection, or sacrificing essentials to keep the lights on.[5]

Everyone benefits from energy efficiency; ‘efficiency first’ should be Victoria’s mantra

The Victorian Government could achieve more energy efficiency and bigger bill savings by making existing home subsidies more flexible, for both renters and homeowners. For example, allowing people the option to spend their ‘Solar Homes’ subsidy on other home upgrades, such as insulation, affordable heating or cooling, window coverings, draught sealing, and repairs to broken windows, walls and floors.

At present, Solar Homes has solar hot water system subsidies worth up to $1,000.[6] But this positive step targets only one of the ‘big three’ home energy spends – hot water – while doing nothing to help with heating or whitegoods.[7]

Subsidies for home upgrades can be targeted at people on low incomes, who suffer most from high energy and housing prices, and have least capacity to adapt to climate change.[8] Low-income households are the biggest beneficiaries of energy efficiency upgrades, with a $2,000 subsidy producing average savings of $328 each year.[9]

And where household solar is installed, energy efficiency allows more solar to be pumped into the grid. This makes the clean energy transition cheaper by reducing network costs and putting pressure on wholesale prices.[10]


 Support fair clean energy access for renters

Abolish the renter co-payment for Solar Homes

Under Victoria’s nation-leading ‘Solar Homes’ program, 650,000 homeowners and 50,000 renters will get a solar panel subsidy. But to be eligible, renters will need to strike an agreement with their landlord to share solar panel costs. Renters will cover 25 per cent of costs, via a four-year rent levy, with government and the landlord paying the rest. This could mean renters have to pay an extra $1000 – or more – to their landlord.

The deal assumes renters enjoy a net benefit – they help cover solar panel costs, but energy bill savings make it worth it. Even if this occurs, the deal isn’t fair on renters. It forces them to pay for an upgrade to a house they don’t own. Renters may see the benefit of lower bills, but it’s the landlord who’ll scoop up the improved capital value, and potentially higher rents from future tenants.

The co-payment is particularly challenging for low-income renters. An extra rent levy means greater risk of financial stress and eviction if energy bill savings don’t measure up.

And the renter co-payment raises tricky implementation issues, such as cost recovery. Most tenancies only last 12 months, making it likely future tenants will have to make co-payments, or the existing renter will face a large lump sum payment when they leave. Both options are difficult, especially for people on low incomes.

The better approach is for the Victorian Government to co-fund solar panels with landlords, half and half. This is a great deal for landlords that should increase solar installation on rental homes.

Solar Homes for renters can work, by waiving the renter co-payment, delivering a good deal to landlords, and ensuring renters receive bill savings from solar installation.


 Deliver on energy fairness changes

Ban all predatory energy marketing, add low-cost concession deals, stop rapid price changes, and enforce consumer protections

The Victorian Government’s energy reforms are a blueprint for lower prices and fairer treatment. They will outlaw energy door-to-door sales and telemarketing, ensure concession holders get the best deal, stop retailers rapidly jacking up prices, and introduce stronger consumer protections for people struggling to pay bills.

There are further steps the Government could take to manage high electricity prices. The ban on predatory energy marketing should include solar panel sales. Unsolicited solar sales can pressure vulnerable people into shoddy, overpriced deals,[11] with risks of more ‘cowboys’ increasing during the Solar Homes roll-out.

Victoria can also swiftly deliver on its promise to ensure concession holders get a good energy deal.[12] This can be with a low-cost deal, set below the ‘Victorian Default Offer’, delivered by one or several Victorian energy retailers, similar to South Australia’s concession deal.[13]

Victoria can also speed up reforms to fix energy prices for 12 months. People are getting burned by dodgy retailers who hike prices moments after customers switch to affordable deals.[14] Victoria can also cap costs when people can’t comply with pay-on-time discounts. The average ‘bill shock’ for late payments is $314. In some cases, people have paid $652 more than expected.[15]

Around 50,000 Victorians are disconnected each year for not paying their bills. [16] Under the new payment difficulty framework, disconnection is a last resort, people can get affordable payment plans, and retailers must support people in greatest need. But the framework has no teeth unless the regulator cracks down on belligerent retailers. Successful reform needs a properly funded regulator.

Henry and June’s solar rip-off

Henry and June live in regional Victoria and rely on the Disability Support Pension. A salesman came to their home selling solar panels. Henry and June felt they could not afford solar, but the salesman said they would no longer receive energy bills if they installed solar, and they could get finance. Henry agreed to apply for finance. Copies of the signed paperwork were not left with Henry and June, and they later learned the salesperson had completed the contracts himself (without their knowledge), and falsely state one of them was employed. Henry and June were also not told about the cooling-off period on unsolicited sales.

Henry and June were rejected for finance, but the panels were already installed and they could not pay for them. Debt collectors sought to recover the $15,000 panel costs.

Community lawyers helped Henry and June resolve the matter, and showed the solar panels should have cost $6,000 to $7,000, rather than the $15,000 charged.[17]



 Help Victorians overcome financial distress

Boost financial crisis responses with an extra 90 financial counsellors

Many people struggle with financial problems in their lives, particularly when they have children, grapple with bills and debts, and face health problems. A strong financial counselling network helps get Victorians back on their feet and stops small financial problems snowballing into expensive catastrophes.

Victoria needs an extra 90 financial counsellors as a minimum to meet demand.[18] Household debt is at record highs, with wages barely growing and over 270,000 Victorians underemployed. Meanwhile, income support payments like Newstart and Youth Allowance are set below the poverty line.[19]

Financial counsellors help people avoid financial predators, and address rental and mortgage stress, energy hardship, debt problems, and the financial effects of family violence, health issues and job loss. Without financial counselling, people are vulnerable to unscrupulous payday lenders and ‘debt help’ services.

In particular, specialist financial counselling can help in priority areas and cases. These might include drought-affected rural and regional communities suffering financial stress, and child-abuse survivors needing financial and investment advice if eligible for the National Redress Scheme. People struggling to pay rent and avoid eviction are another priority, including those who can now be referred by VCAT under rental law changes. Specialist financial counsellors should ideally be embedded in drug and alcohol services, community legal centres, asylum seeker agencies, and other organisations enabling this vital counselling to be delivered alongside related services.


Tamara’s debt nightmare

Tamara and her husband were married for 10 years and had two children. Tamara’s husband was extremely violent, abusive and controlling.

After the loss of their daughter, Tamara’s husband refused to pay funeral expenses and continued to use Tamara’s Centrelink benefits. With the little money she could access, Tamara paid for her daughter’s funeral and the family’s rent, school fees and her husband’s fines.

Tamara had more than $25,000 in debts for unpaid utility bills, credit cards, a Centrelink debt and a personal loan she used to pay for her daughter’s tombstone. Tamara came to the McAuley/WEstjustice legal and financial counselling program soon after she separated from her husband. She had to leave her son with a close friend so he could continue his studies. Tamara was skipping meals while living in a safe house to make ends meet.

In just five hours, WEstjustice obtained a full waiver of Tamara’s $10,000 personal loan, and in just one week secured full waivers of Tamara’s telephone, utility, other banking and debt collection debts. By clearing these debts, Tamara could afford to return to a private rental and live with her son again.[20]


 Introduce an ‘Energy for Health’ concession

Introduce an ‘Energy for Health’ concession for people with health or disability related energy needs

Health problems and disability can blow out energy bills; for instance, due to daily wheelchair charging or heater use spikes by people with chronic respiratory illness. This can result in long-term energy hardship. Sixty per cent of households persistently unable to heat their homes include someone with a long-term health condition or disability. Over 70 per cent of people with poor mental health struggle to pay energy bills.[21]

Victoria currently provides a Medical Cooling Concession to people who can’t maintain a normal body temperature,[22] and a Life Support Concession. But other people with health or disability related energy needs are left out. With a comprehensive ‘Energy for Health’ concession, Victoria can reduce energy costs for people with conditions that:

  • are exacerbated by temperature changes
  • affect body temperature maintenance
  • create intensive washing, cleaning or personal care needs
  • require charging or using communication, medical and mobile devices
  • require lengthy periods of time at home.


Peter’s power struggles

Peter is a 75-year-old man with heart problems, arthritis, asthma and bowel cancer. He carefully manages his Age Pension, but health issues mean he struggles to afford enough energy for comfort and wellbeing. Peter “can’t take the humidity” that exacerbates his arthritis pain, but never uses air-conditioning in summer because of the cost.[23] He is ineligible for the narrowly defined Medical Cooling Concession. An Energy for Health concession would help people such as Peter stay cool and comfortable, with less pain.


 Prevent destitution for people seeking asylum

Fund a crisis response to prevent destitution among people seeking asylum living in Victoria

About 11,000 people seeking asylum live in Victoria. They learn in schools and TAFEs, contribute to local communities, and work when allowed. Six thousand members of this community will have no means to live and face extreme deprivation, as a result of Federal Government changes to the Status Resolution Support Services program. These changes remove the paltry $250 a week financial allowance they receive, and block access to services including accommodation and mental health care.

Victoria can protect people by immediately funding a crisis response package, delivered by specialist asylum seeker services and mainstream organisations such as emergency relief providers. This will allow people to stay housed, fed and educated, and access legal and psychological support.

Victoria can fund the development of training, resources, communication materials and programs so mainstream organisations can provide appropriate and accessible services, and people seeking asylum can navigate them. Meeting people’s basic needs will build social cohesion, create stronger communities and prevent further trauma and hardship among an extremely vulnerable group of people.

Victoria can make it easier to access essential services by making asylum seekers eligible for the mainstream safety net. This includes allowing people to use the Public Transport Victoria Asylum Seeker ID to receive energy and water concessions. Victoria can make all state-funded services available to people seeking asylum, regardless of visa status, residency, Health Care Card, or Medicare eligibility.


 Fix the public transport concessions mess

Overhaul the concessions system to make it easier to use

Victoria’s public transport concessions are messy and confusing, hindering access to affordable travel. There are 17 types of concessions and six types of free travel passes, bewildering many eligible people, who give up and don’t bother applying. Victoria can make this system simpler, more efficient and equitable.

Affordable public transport is especially important for people on low incomes, who may otherwise be unable to reach workplaces, education, healthcare and family and friends. It brings freedom to young people, older people who cannot drive, and people with disability who need options other than expensive point-to-point transport, such as taxis.

Affordable public transport gets people out of cars and off roads, helping to fight congestion and reduce carbon emissions.

Victoria has already taken a solid step by allowing students to use school ID cards for concession travel, overcoming one of the main roadblocks to affordable student travel.[24] It’s now time for a comprehensive overhaul of the concession system as a whole, to improve everyone’s access to affordable travel.


 Ramp up transport options for rural and regional Victorians

Expand the Flexible Local Transport Solutions program in rural communities and regional towns

Rural and regional communities have a dire need for accessible, affordable public transport. People in these communities typically travel longer distances and have fewer transport options, an older population and poorer socio-economic outcomes than people in urban areas. Infrequent bus services with sparse coverage make it difficult to access jobs, services and train stations.[25]

Victoria can ramp up investment in the Flexible Local Transport Solutions program, which funds small innovative local transport projects.[26] This type of funding helps ensure people can move around their local communities and access basic services like shopping, medical appointments, education, jobs and community services.

Government funding for rural and regional services should recognise that transport can be a major barrier to service access. A proper community transport industry, in touch with local people’s needs, would help people get where they need to be. This means subsidising transport for people who cannot afford to travel to or around regional centres, and funding organisations to provide outreach or permanent local transport services in areas with entrenched transport disadvantage.


On the move with Woodend Flexiride

Woodend Flexiride is an on-demand weekday bus service. The 18-seater bus departs from the local shopping centre seven times a day, and connects with the sports centre, medical centre and train station. For the cost of a local transport fare, people can be picked up at the 28 local stops by calling to request a pickup, or catch the bus from the shopping centre to be dropped near home.

Flexiride is an example of providing flexible public transport to meet the needs of small communities, where demand may be low and a traditional fixed bus route may not be feasible.


 Further strategies

Enable more Victorians to access cheaper energy deals

The existing ‘Your Energy Broker’ service helps people, face-to-face, to find a better energy deal, answers their questions and helps them switch. This service can be expanded to directly assist more Victorians to quickly lower their energy costs by switching retailers.

Index the Utility Relief Grant

Victoria has boosted the Utility Relief Grant to $650, to help financially stressed households with energy and water bills. This protection can be defended from eroding in value by properly indexing it to reflect changing energy and water costs.

Boost emergency relief services

Victoria can boost underfunded emergency relief services, which cannot keep up with demand. They provide emergency assistance to people in crisis, including with rental and utilities stress, high education costs, and food insecurity. Victoria is one of the few states and territories that does not directly funding emergency relief services.

Improve food security

Many Victorians cannot afford a healthy diet and experience food insecurity, including people on low incomes, without work, single parents and Aboriginal people.[27] Victoria can support communities to develop long-term food security strategies, and support people to grow, buy, and prepare affordable nutritious food close to home.

Develop a digital inclusion strategy

Digital access is an essential service, needed for everything from getting a job to finding a home, managing money, doing homework or accessing services. Victoria can develop a digital inclusion strategy including expanding public access Wi-Fi and internet, and connecting low-income households through low-cost internet plans and affordable devices.

Promote access to general insurance

Adequate home and contents insurance protects Victorians against financial crisis and allows them to more quickly recover from natural disasters. Community organisations can be supported to partner with insurers to develop better products, and Victoria can run ongoing campaigns to raise awareness of the value of insurance.


[1] Victoria State Government, Department of Treasury and Finance, Economic Update, December 2018.

[2] Tanton, op. cit.

[3] Centre for Social Impact and National Australia Bank, Financial Security and the Influence of Economic Resources – Financial Resilience in Australia 2018, December 2018, p. 21.

[4] Victorian Council of Social Service, Battling On: Persistent Energy Hardship, November 2018.

[5] Victorian Council of Social Service, Power Struggles: Everyday Battles to Stay Connected, August 2017.

[6] Victoria State Government, ‘Solar Homes Package’.

[7] Sustainability Victoria, Victorian Households Energy Report, May 2014, p. 2.

[8] Australian Council of Social Service and Brotherhood of St Laurence, Energy Stressed in Australia, October 2018; K Mallon, E Hamilton, M Black, B Beem and J Abs, Adapting the Community Sector for Climate Extremes, National Climate Change Adaptation Research Facility, 2013, p. 286.

[9] Australian Council of Social Service and Brotherhood of St Laurence, Affordable, Clean Energy for People on Low Incomes, January 2019, p. 16-18.

[10] CSIRO and Energy Networks Australia, Electricity Network Transformation Roadmap: Final Report, April 2017.

[11] Consumer Action Law Centre, Loddon Campaspe Community Legal Centre and WEstjustice, Knock it off! Door-to-door Sales and Consumer Harm in Victoria, November 2017.

[12] Victorian Labor, Fact sheet: Cracking down on dodgy energy retailers – Labor’s Energy Fairness plan.

[13] South Australia Government, Energy concession discount offer.

[14] D Cuthbertson, ‘Sumo admits luring customers with cheap deals then upping power prices’, The Age, 28 December 2018.

[15] Essential Services Commission, Victorian Energy Market Report, 2016-17, 2017.

[16] Essential Services Commission, Victorian Energy Market Snapshot, 2017-18, 2018.

[17] Consumer Action Law Centre, Loddon Campaspe Community Legal Centre and WEstjustice, Knock it off! Door-to-door Sales and Consumer Harm in Victoria, November 2017.

[18] Consumer Action Law Centre, Access to justice matters: Make it fair and affordable.

[19] Reserve Bank of Australia, The Australian Economy and Financial Markets—Chart Pack, January 2019; Australian Bureau of Statistics, Average weekly earnings, Australia, May 2018, cat. no. 6302.0; Australian Bureau of Statistics, Labor force, Australia, October 2018, cat. no. 6202.0; Councils of Social Service, Payment adequacy: A view from those relying on social security payments, 2015.

[20] S Tonkin, Restoring Financial Safety: Collaborating on Responses to Economic Abuse, WEstjustice, July 2018.

[21] Victorian Council of Social Service, Battling On: Persistent Energy Hardship, November 2018, p. 22-25.

[22] The Medical Cooling Concession is available to concession card holders and provides a 17.5 per cent electricity discount between 1 November and 30 April, in addition to the yearly electricity concession of 17.5 per cent.

[23] Victorian Council of Social Service, Power Struggles: Everyday Battles to Stay Connected, August 2017, pp. 26-27.

[24] Public Transport Ombudsman Limited, Public Transport Ombudsman Youth and Industry Roundtable Report, November 2015.

[25] Infrastructure Victoria, Victoria’s 30-year Infrastructure Strategy, December 2016.

[26] Transport for Victoria, Local Transport Update, August 2018

[27] Department of Health and Human Services, Challenges to Healthy Eating – Food Insecurity in Victoria: Findings from the 2014 Victorian Population Health Survey, State of Victoria, 2018.


Artwork by artist Jacob Komesaroff. Follow on Instagram @jkomments