Kathy Bowlen interviews Cath Smith of Victorian Council of Social Services about electricity price rise

Broadcast: 30/11/2007

Reporter: Kathy Bowlen

KATHY BOWLEN, PRESENTER: Cath Smith, thanks for your time. Were you surprised at a 17 per cent price hike for electricity?

CATH SMITH, CHIEF EXECUTIVE OFFICER VICTORIAN COUNCIL OF SOCIAL SERVICES: We weren't surprised. Obviously because there has been quite big conversations about water shortage.

KATHY BOWLEN: But the size of it?


I mean, I think it will be the shock of less for the policy commentators like us and more for the people who have to pay the bill.

KATHY BOWLEN: How will they do that?

CATH SMITH: Well what it will mean is, people will really need to be reliant on easy pay and a range of other hardship policies in some cases, in order to make sure that people can be okay with this situation.

People in the peak electricity time, particularly for rural Victorians are very reliant on electricity.

That peak electricity bill for the year will probably go up $60 to $80 in many cases. So what that means is that people will really need to budget.

And the impact of that is of course is that for people who are already covering a wide range of bills, things will go.

And that's, our concern is really what things will go and we hope it won't be things that will support people's wellbeing and health, like those negotiable things, like making sure there is good food on the table every day, social and recreational costs.

KATHY BOWLEN: But this is just electricity. What about when gas and water go up?

CATH SMITH: That's right. That's our concern.

One of the estimates we've been looking at four years from now, across the three major utilities, we're looking at increases of anything up to $400 to $1,000 a year across those three utilities, depending on the household.

KATHY BOWLEN: Well low income families you know, what chance have they got of having a $1,000 increase in there take home money in a couple of years' time?

CATH SMITH: Well that's exactly right. Because what we've got is those real essentials of life, and it includes petrol and rent and things like that as well. They are going up way faster than what incomes are.

So what it means is very targeted initiatives. And I think the actual structuring of how things are costed and regulated needs looking at, so that we get a clarity about an affordability component, if you like, to ensure the essential supply.

KATHY BOWLEN: So when you say targeted initiatives, you are talking about things you think the Government should do? What are they?

CATH SMITH: Yes. One of them of course is concessions. There is already a well established concessions policy and framework and we'd be wanting a commitment from Government that for every percentage increase in these utility prices there needs to be the same percentage increase in the concessions to buffer.

KATHY BOWLEN: So if electricity goes up 17 per cent, so should the concession?

CATH SMITH: That's right. That's what we would be strongly arguing for. The second thing is around energy efficiency. Yes it is true, if you make your home more firmly efficient, you will save a lot of money on your bills.

KATHY BOWLEN: But that costs you money?

CATH SMITH: It costs you money. If you haven't got the money up front and for low income families that don't use as much power, they are already rationing, it will take even longer to pay off, if you like.

So we are looking at how do we target retro fitting of older properties, how do we look at getting investment in there to help make those houses more efficient to start with and for tenants who don't have either the money or the control with the rental market the way it is.

How do we encourage or incentivise owners to make houses more firmly efficient.

KATHY BOWLEN: And what about the price of electricity?

CATH SMITH: Right now would not be the time for the Government to walk away from regulating prices.

KATHY BOWLEN: So you're saying the Government should continue to regulate the price of electricity?

CATH SMITH: Absolutely, yes.

KATHY BOWLEN: Cath Smith, thanks very much for your time.