Victorians on low incomes are missing out on big discounts for air conditioners and heaters because the state government has failed to introduce reforms intended to provide energy bill support to those in the greatest need.
Almost a year after amending its Victorian Energy Upgrades [VEU] program so it could become more accessible to vulnerable consumers, the Allan government is yet to enact the changes.
While the financial support the VEU program was supposed to provide sits unused, a new report by the Brotherhood of St Laurence shows there are significant benefits on chronic conditions, financial security and overall health by undertaking the energy upgrades it is supposed to provide.
The Brotherhood has called on the state to make these programs more accessible, with upfront costs a significant barrier to their uptake.
Under VEU program, households can receive discounts on new electric appliances if they are replacing gas or less energy-efficient models. But the program has been criticised at times for being most beneficial to those with higher incomes because of upfront costs, including a $200 co-payment scheme designed to stop rorting of the program for products such as cook tops and heat pumps.
In legislation introduced last year, the Allan government appeared to acknowledge this issue by adding a clause that allowed for future discounts “specifically for vulnerable and low-income consumers”.
“This will enable greater access to participate in the VEU program in future, especially as cost-of-living pressures continue,” Energy Minister Lily D’Ambrosio said.
But as rising costs continue to trouble many across the state, Brother of St Laurence climate lead David Bryant said the upfront spending requirements continued to limit the program’s take-up.
“We’re very supportive of existing supports and subsidy programs for upgrades, but it is important people with low incomes and health conditions are not left behind,” he said.
“A lot of people don’t have money lying around to upgrade their homes even though it would lower their bills and help them live more healthily in the longer term.”
“[The VEU] In particular, doesn’t have any particular focus on low-income people, so we definitely support measures to have some sort of low-income stream or additional incentives.”
A pilot program delivered by the Brotherhood saw solar, airconditioning and insulation upgrades provided in 126 homes for people on low incomes with chronic health conditions.
About 90 per cent of participants in the Climate Safe Homes pilot reported better temperatures indoors and half reported lower energy bills. Solar upgrades cut annual bills by $100 on average.
However, more than two-thirds of those who received solar or reverse-cycle airconditioning said they wouldn’t upgrade without the support of the program.
Bryant said there were some people who simply couldn’t afford a co-payment or upfront cost to afford energy upgrades, creating gaps in the rollout of modern living standards.
He said the additional rebates flagged by the government were a good idea, while other states also had “priority groups” which meant a certain percentage of upgrades had to be delivered for people in these groups.
The introduction of $200 co-payments in the VEU was partly driven by installers who rorted the scheme.
In 2023, dozens of display fridges were dumped outside businesses by installers looking to claim lucrative green certificates without actually replacing ageing appliances.
Bryant said this showed the rebates needed to be managed carefully, with truly free appliances only available to those who need it most.
Victorian Johnson, who managed the scheme for the Brotherhood, said they hoped to show that energy upgrades programs could be targeted at lower income earners suffering from poor temperature conditions.
“People reported really strong outcomes, with their health improved or maintained,” she said.
A government spokesperson said the VEU is available to all Victorians and there were currently additional supports ready for families feeling financial stress, including a $100 Power Saving Bonus.
Ceiling insulation will also be available under the VEU this year, which is expected to cut installation costs by up to $1500.
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