Community organisations call for government intervention on energy debt as energy company profits skyrocket
A coalition of leading community advocacy organisations has today launched an open letter calling on the Federal government to urgently intervene and erase the more than $300 million of energy debt currently crippling 331,750 households.1
In the letter the organisations, including The Australian Council of Social Service, Antipoverty Centre, Anglicare Australian, The Australia Institute and the Consumer Law Action Centre state that this debt has been exacerbated by the behaviour of big energy companies who have chosen repeatedly to put their profits ahead of people, and have made eye-watering profits while repeatedly increasing energy costs, at the expense of ordinary people, forcing families to choose between heating their homes and putting food on the table.
Australia’s two largest energy retailers – AGL and Origin Energy – who collectively service almost half of Australia’s energy customers – raked in $2 billion in combined profits last year2. Profits that they themselves partly attributed to an increased consumer margin on energy3. That is, they were charging their customers more for power, even though it was costing them less to generate it.4
Now, with energy prices likely to increase even more, after the Australia Energy Regulator released its draft Default Market Offer determination yesterday that recommended a 5-10% increase in default retail energy prices5, advocates say real action to provide relief from debt and high energy prices is urgently needed and long overdue.
The letter calls on the government to act to give immediate relief to households struggling with debt and high energy prices, by paying down their existing energy debts, and to end the debt cycle by investing in long-term solutions to make the energy market fairer and cut energy bills forever. This includes supporting more homes to access clean energy upgrades like rooftop solar, home batteries, adequate insulation and efficient appliances, which could collectively slash Australia’s energy bills by $23 billion annually.6
State and Federal Energy Ministers are due to meet tomorrow and energy prices are likely to be on the agenda, the organisations are urging all governments to consider what they can do to help free people currently trapped in energy debt and cut energy costs long term.
The ask of government comes after the Stop The Bill Shock campaign, which authored the letter, made a similar debt forgiveness demand of energy companies in December – which they failed to respond to or action – even as thousands more people found themselves unable to cope with their increasing bills.7
The open letter is now live and open for public support, with organisations and individuals encouraged to sign on.
Find out more at stopthebillshock.org/letter
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Quotes attributable to Stop The Bill Shock campaign spokesperson and Antipoverty Centre co-coordinator, Jay Coonan
“Energy companies have shown they are unwilling to put struggling customers before profits. It is time for the government to step in to help people stuck in debt traps and those of us forced to choose between keeping our homes at a safe temperature and energy costs we can’t afford.
“Energy companies have reaped billions in profits while hundreds of thousands of people are stuck in debt, and have resisted our calls to do anything serious to help customers who are under enormous financial strain.
“More government subsidies for the same energy companies that are continuing to increase prices won’t offer real relief either. We have no choice but to ask the government to step in and act to wipe energy debt immediately to protect people from harm. But wiping debt isn’t the end of the story – we need meaningful changes to keep energy companies in line, expand access to cheap renewable energy and end the debt traps that make people unsafe.”
Quotes attributable to Jeff Smith, CEO of Disability Advocacy Network Australia:
“We know that people with disability are at extreme risk of illness and death as heatwaves get longer and more intense. Because of rolling heatwaves over summer, people with disability have taken another hit on their bills.
“89% of heatwave deaths are people with disability and the cost of staying safe through severe heat and cold is a huge part of many people’s budgets. Cancelling debt and cutting power costs are crucial measures to ensure the safety of people with disability.
“The Federal Government needs to act now to ensure people aren’t forced into a debt trap just to stay safe.”
References:
- Australian Energy Regulator, Annual retail markets report 2023–24, published 2 December 2024
- The Guardian Australia, ‘Origin Energy posts near one-third jump in profit after steep rise in Australians’ electricity bills’, published 15 August 2024
- AGL Energy Limited Full-Year Results Webcast transcript, published 14 August 2024
- The Australian Institute, ‘Power gouge: how AGL and Origin are milking monster profits from battling families’, published 11 October 2024
- Australian Energy Regulator, ‘Default Market Offer Prices Draft Determination’, published 13 March 2025
- Springmount Advisory, Analysis: Household energy upgrades would slash the cost of living by billion per annum, published 29 January 2025
- Australian Financial Review ‘Household hardship mounts as energy prices increase’, published 2 December 2024