Energy bills still rising way faster than our income

Posted: 11 March 2021 10:31 am
News
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Energy bills have grown over three times faster than people's incomes since 2005.

It's just more evidence that there's a widening gap between incomes and energy costs in Australia.

It's the same story for both electricity and gas

In 15 years, we've seen a rise of 76.9% in electricity prices and a rise of 60% in gas prices, while the average household income has only increased by 27%, according to the latest data from the Annual Retail Markets Report.

Source: AER

Energy has become slightly more affordable over the past two years, hitting record highs in 2018 before dropping back down again, but it's still expensive by historical standards. The biggest increase occurred between 2008 and 2014 at a time when incomes barely changed.

Lower income Australians are spending over 5% of their income on energy

Source: AER

It's easy to see why many of us are feeling the squeeze on our household budgets. In June last year, low income households typically spent between 2.7% and 5.9% of their disposable income on electricity and between 1.6% and 3.7% on gas.

Those on the highest priced offer in some cases spent as much as 6.2% of their disposable income on electricity and 5.4% on gas.

So which states are forking out the most for energy?

Source: Finder's Customer Sentiment Tracker, March 2021

When you look at the different states, South Australians were among the worst hit last year. According to a Finder study, they paid $421.90 per quarter for electricity, almost $100 more than the national average. At $86,262 per year, South Australians also have one of the lowest average household incomes in the country.

Victorians, on the other hand, paid the most for gas ($243 per quarter), around $35 more than South Australians ($207.30) and $30 more than the national average. A low income household in Victoria is estimated to earn around $35,633 per year, so $243 represents a significant portion of their earnings.

While consumers can do little about the disparity between household income and energy costs, you can control how much you spend on energy by making your home more energy-efficient and switching to a more competitively-priced energy plan.

Image: GettyImages

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