The ACT Government’s plan to transition the territory from fossil fuels to electricity by 2045 could worsen inequity and energy hardship for low-income Canberrans, unless the government prioritises the most vulnerable from the outset, the ACT Council of Social Service (ACTCOSS) warned in a report published today.
“If consideration of equity is left until last, there is a risk that transition away from gas will further entrench disadvantage in the ACT and leave the most vulnerable Canberrans facing higher utilities costs, more health risks, and less efficient homes,” ACTCOSS stated.
ACTCOSS, the peak body for the community sector, commended the government’s commitment to net zero emissions, but insists it must approach the transition through an ‘equity lens’, “focusing on liveability, health, and wellbeing”.
“ACTCOSS commends the [ACT Government’s Integrated Energy] Plan’s principles of a fair and equitable transition and strongly supports the focus on support for those who need it most,” Dr Devin Bowles, ACTCOSS’s CEO, said.
“To tackle climate change, it is critically important to phase out fossil fuel gas, but we agree with the Government that this should not be the only goal.
“This is an opportunity to reduce emissions, but also a chance to improve the health, living conditions, and wellbeing of some of the most vulnerable Canberrans in our community.”
The report, Supporting a fair, fast and inclusive energy transition in the ACT, makes 22 recommendations.
Canberra Daily asked the ACT Government for comment.
Paying for power
The government must provide targeted financial support to low-income households (including those in social housing and private rental properties) to transition, ACTCOSS believes. They are “the least able to transition”, but will “benefit the most from improved energy efficiency and thermal comfort”.
Canberrans in the bottom two income brackets spend twice as much (4 to 4.4 per cent) of their disposable incomes on energy costs than those in the top two income brackets (2.2 to 2.4 per cent), the report states. Many live in poor quality homes that are hard to heat in winter or cool in summer, putting them at risk of health conditions from heat stress to hypothermia, respiratory infections to asthma, or poor mental health. They struggle to pay their energy bills, and even forego essential needs like food or medication to afford power. In the ACT, the price of electricity has increased by 28.1 per cent (compared to 2.3 per cent nationally) and of gas by 24 per cent (compared to 12.7 per cent nationally) over the last five years, according to ABS data, while gas prices are expected to rise by a further 19 per cent by the end of the decade.
The upfront costs of electrification are high – between $2,000 and $6,000 to replace a gas hot water system with an electric system, or between $1,700 and $4,500 to replace a combined gas cooktop and oven – but the long-term cost savings are enormous, ACTCOSS states. According to the Climate Council, Canberrans could save $1,876 each year if they replaced gas appliances with higher-priced electric alternatives, or $1,561 with lower-priced electric alternatives.
However, low-income Canberrans cannot afford the upfront costs of transitioning to energy efficient appliances.
“For many people on low incomes, living in rentals or living in apartments, there is no choice but to remain on the gas network without assistance to meet the costs of electrifying their homes,” ACTCOSS states.
Financial supports offered by the ACT Government favour high income earners, ACTCOSS believes.
The Home Energy Support Program (HESP) offers $5,000 rebates to low-income households to install rooftop solar and energy efficient appliances – but the eligibility criteria exclude many low-income households, according to ACTCOSS. It is only available to concession card holders, and the unimproved value of their property must be at or below $750,000 for standalone properties or $300,000 for units.
Likewise, the Sustainable Household Scheme (SHS) offers 10-year interest-free loans of between $2,000 and $15,000 to invest in energy efficient appliances and infrastructure. But, ACTCOSS states, fortnightly repayments are more than low-income families’ budget surpluses; they are unlikely to meet the minimum loan repayments without cost offsets in their energy bills.
Furthermore, the government has allocated only $50 million over four years to HESP, but four times that amount, $200 million, to the SHS.
“This spirit of funding does not reflect a commitment to prioritise those on low incomes or in vulnerable households,” ACTCOSS states.
The peak body called for “a progressive and responsible redistribution of public funds”, rather than “a ‘trickle-down transition’ that disproportionately benefits higher income households at significant social cost”.
“Access is currently unevenly distributed, with wealthy households reaping most of the benefit. This needs to change.”
ACTCOSS recommended also that concessions be raised in line with rising energy prices, and changed from a fixed rate system to a needs-based system to give people with greater need more financial assistance.
It also proposed that the community sector administer Energy Support Vouchers (currently given out by energy retailers under the Utilities Hardship Fund), as they would be better positioned to identify potential recipients and to follow up with them.
Rent reforms
The ACT Government should incentivise landlords to electrify their rental properties, and introduce regulation to prevent landlords from replacing or installing any gas appliances in rental properties, ACTCOSS recommended.
Approximately 30 per cent of dwellings (nearly 51,700) in the ACT are rented, and it is difficult for tenants to choose which appliances and energy sources power their households.
“In a tight rental market … there is little incentive for landlords to make energy efficiency upgrades,” ACTCOSS remarked.
ACTCOSS also called for the government to expand and strengthen minimum energy efficiency standards, and for stronger tenancy rights around modifications and leases. Many landlords saw their properties as commodities and investments for them rather than providing shelter and wellbeing for their tenants, ACTCOSS stated. Tenancy rights in the ACT were worse than those of jurisdictions overseas (such as Germany); many rental properties were poorly insulated, infested with mould or vermin, rental prices had skyrocketed, repairs were difficult to organise, and short-term leases were common.
Because many young Australians were unlikely to ever afford to purchase a home of their own, changes were necessary to make renting “a viable and sustainable long-term option”, ACTCOSS advised.
Social housing unsatisfactory
The ACT’s social housing stock was also “in a dire state”, ACTCOSS stated. In 2021, only 63 per cent of public housing tenants said their homes had comfortable temperatures (less than the 73 per cent nationally), and only 60 per cent said their homes were energy efficient (compared to 77 per cent nationally) – the lowest rates of satisfaction in the country. More than a quarter (27 per cent) of ACT social housing tenants were in households that did not meet the 2023 Report on Government Services minimum acceptable standards.
ACTCOSS called for a widescale upgrade of all public and social housing, including draughtproofing, insulation, and electrification to address energy costs and thermal discomfort; and for solar panels to be installed on all social housing properties to reduce energy costs for tenants. One approach could be to expand Housing ACT’s ceiling insulation / energy efficiency program to all community housing in the ACT.
Lack of information
ACTCOSS’s clients were generally unaware of, or not paying attention to, the ACT Government’s gas transition, the report found. Most were more focused on cost of living and housing issues than on switching their appliances to electric; and they did not know about financial or other supports available. Some did not know why the ACT planned to electrify; what electrification looked like; how to improve energy efficiency; rental rights; from whom to seek advice; what to buy; and how much it would cost.
“The cost implications of being stranded on the gas network will not be clear to most people who are not actively engaged in climate change issues,” ACTCOSS warned.
ACTCOSS proposed that the ACT Government partner with community organisations and energy retailers to reach consumers; and that it better publicise and expand on the government’s energy efficiency and gas transition advice programs.
Instead of “jargon laden, text heavy messaging”, the government should provide information in simple language, and in a variety of languages, with infographics. It should also implement a targeted communications strategy to reach First Nations communities.
The government, ACTCOSS recommended, should also expand the Sustainable Home Advice Program to include an in-home assessment with an energy expert so the household received a tailored and independent cost estimate of their desired upgrades; this would reduce the perceived level of financial risk.
Tradespeople
The community was concerned that the ACT did not have enough tradespeople trained in electrification to satisfy future needs, while some consumers reported that tradespeople had given them unhelpful, inaccurate, or conflicting advice on transitioning.
ACTCOSS recommended additional training to contractors on the installation and maintenance of electric appliances, solar PV, and battery storage, and incentivisation schemes for electricians to install more energy efficient appliances.
Gas disconnection fee
Abolishing a permanent gas connection costs $750 to $800 in the ACT; a temporary disconnection (capping the meter) is cheaper ($140), but may be a safety hazard, because pressurised gas continues to flow from the main street to the house, and forgotten pipes could burst.
ACTCOSS recommended that the ACT Government disconnect a whole street or suburb in one go, which would be cheaper for both the energy company and the customers, due to economies of scale.
It also recommended the government subsidise the disconnection fee for low-income homeowners and community housing providers.
ACTCOSS also proposed electrification targets for residential and business gas connections, including ambitious targets for social housing and low-income households. Otherwise, ACTCOSS warned, targets might largely be met only by wealthy households, masking and exacerbating inequity.
“If the ACT fails to address the barriers preventing vulnerable households from transitioning, they will be stuck on an increasingly expensive gas network and face increasing risks to health and wellbeing,” ACTCOSS stated.
“By prioritising those least able to transition early in the process, we will ensure that no-one is left behind.”
