National energy program would boost economy and save power bills, ACOSS report finds
Like a lot of low-income people in Australia, Bronwyn Stretton knows all too well the creeping fear that arrives with summer.
Until recently, much of her 1950s home in Geelong became uninhabitable when temperatures rose.
Without air conditioning, there was only one place her family could escape to when caring for their young grandchild.
“At one point we even went out in the car so we could have the air conditioning on. It was terrible,” she said.
“When we had the extreme heat, it was like an oven in our house very quickly.”
Ms Stretton is the primary carer for her husband and relies on Centrelink to supplement a part-time teaching salary.
Three years ago, she was part of an energy assistance program run by the Brotherhood of St Laurence.
That gave her the money for insulation, an air conditioning and heating unit, and blinds to block out the hot sun.
“It’s made it more comfortable for us and made me less panicky about the extreme heat that I think we’re going to have more and more,” she said.
She’s also saving money on her power bills.
“The bill dropped from $231 to $114 [per month],” she said.
“My usage dropped from over 7 to about 5.5 kilowatts an hour. So it had a really definite impact.”
The Australian Council of Social Services (ACOSS) wants to see more low-income homes undergo a similar transformation.
22,000 jobs and billions in the economy
The community services peak body has released a report on the economic impact of the proposed National Low-Income Energy Productivity Program (NLEPP), which would retrofit 1.8 million energy inefficient homes.
“This is a win-win-win for governments and importantly for people living under the poverty line,” Kellie Caught from ACOSS said.
“We’re arguing this is a nation building program that would have profound and sustained economic, social and health outcomes for decades to come.”
ACOSS commissioned Deloitte Access Economics to look at the economic impact of the NLEPP.
That report estimated an average spend of $5,000 on 1.8 million homes occupied by low-income earners and renters.
It would pay for things like insulation, reverse cycle air conditioners and heaters, draught sealing, shades and solar panels.
An estimated 22,000 full-time equivalent jobs would be created if the program was fully implemented, the report said.
The boost to Australia’s GDP would be between $3.4 billion and $4.9 billion. The cost to governments for a full rollout would be $9.1 billion.
“We’re not saying … it’s free, but it’s definitely something that has a positive impact on the Australian economy,” Cedric Hodges from Deloitte Access Economics said.
Low-income people spend more on electricity
One of the impacts would be reduced pressure from energy bills.
Right now the wealthiest 20 per cent of households spend 1.5 per cent of their income on energy costs. The poorest 20 per cent spend four times as much of their income, 6.4 per cent.
“The reduced expenditure required on energy would be kind of fed back into the economy,” Mr Hodges said.
“The findings were obviously that [the proposal] would potentially substantially increase the size of the Australian economy and employment that could be generated.”
Ms Caught, who heads up the Climate and Energy program at ACOSS, said low-income earners and renters were more likely to live in older homes that are much less energy efficient.
“People who are on low incomes, especially those who rent, can often not afford homes that are newer or that are more likely to have better energy efficiency,” she said.
The average energy efficiency rating of existing homes is just 1.7 stars, compared to an average of 6.1 stars for new homes.
That means low-income homes desperately need energy refits. But for many they are out of reach.
“The very thing that would mean they could reduce their energy bill is these energy efficiency measures. And they just can’t afford to implement [them],” Ms Caught said.
“If they rent a property, they’ve got no choice. It’s up to the landlord.”
Old home too cold in winter, hot in summer
ACOSS knows energy retrofit schemes carry a lot of baggage. The $2.8 billion Home Insulation Program sparked a Royal Commission after unsafe work practices led to the deaths of four workers.
“We’ve been really careful in designing this program so that we don’t repeat some of the problems that we’ve had in the past,” Ms Caught said.
“We should be taking the good things from past programs and learning from them so that we implement them in a different way.”
In her community housing unit in the south-west Sydney suburb of Kingsgrove, Olga Palanska would welcome an energy refit for the sake of her and her 11-year-old daughter.
Her 1970s two-storey unit does badly in both winter and summer.
“At the moment I’m putting three heaters on when it’s too cold,” she said.
“Another problem in summer is upstairs. It’s getting so … hot, we don’t have air con, so we can’t even sleep upstairs. We are sleeping downstairs on the couch.”
The 51-year-old single mum said the scheme would allow her to install a new heating and cooling unit, saving her money on her bills.
Ms Palanska also said the grant could help her pay for new insulation and fix old windows that let the cold in.
“If the government wants to help people with this problem, that’s going to be fantastic because it’s not just my house,” she said.
“I see a lot of old houses in the street. And I spoke to people I know, neighbours, and many people have the same problems.”