Energy prices
Low-income groups can often be on ‘standing’ or poor energy offers. They are less likely to engage with the market or shop around for better offers. Research from St Vincent de Paul found that gas customers in Victoria on the worst standing offer would be paying over $2,300 more than they would on the best offer.
The Victorian Default Offer has guaranteed a fair price for electricity for Victorian customers, however we continue our call for a similar Default Offer for gas.
In 2022, the average energy debt for our callers was $2459, an increase of $740 compared to the previous two years. Of our clients with energy debt, 52% reported intersecting hardship such as serious or mental illness and family and domestic violence.
Telecommunications
The ACMA recently reported that in 2021-22, 2.4 million telco customers struggled to pay their bills, but telcos themselves identified just 4,388 customers in financial hardship.
Regulation of the telco industry is out of step with other essential services, and we see this result in cutting off customers instead of offering hardship support.
There was real progress last month, however, when Telecommunications Minister Rowland announced directly enforceable financial hardship rules for telco providers.
Kirsty Robson has firsthand experience talking with people every day, who call our National Debt Helpline. Over to you Kirsty:
Firstly, I’d like to say thank you for the opportunity to tell you what I’m hearing from the callers to the National Debt Helpline.
As Steph mentioned we are getting a lot more calls to the helpline this year. I’d like to share two stories from just last week.
The first person is a woman on the DSP, renting privately, who’s washing machine broke. She didn’t have the money to replace it so took out a payday loan. The high cost of this loan meant that she couldn’t afford her essentials and took out another one. She’s now in a debt trap and months behind, unable to pay for food or her medical bills. Her pension is, instead, going to these high-cost loan companies.
Since the cost-of-living increases, we’ve been seeing a newer demographic of caller reaching out to our service.
The second person is a single mother of 4, working full time with a mortgage. Because of the interest rate rises, she has now found herself struggling to make ends meet when she hasn’t had trouble before. She’s been skipping meals to make sure her kids have enough to eat and putting essential living costs onto credit cards and BNPL accounts to make it through the fortnight. She’s trying everything to make sure her mortgage gets paid because she feels like there are no alternatives available for her. The rental crisis means that it’s meet the payments or face homelessness.
You need to know that these are just two of the cases I dealt with last week, and by no means are extraordinary. We get calls like this every day, people on the cusp of poverty or well and truly in the middle of it.
You need to understand that these people are already incredible money managers, that they are not in this situation because of a personal failing or reckless spending. It’s systemic, it’s the situation they’re in. They don’t have enough money to live on.
