Empirical Evidence on the Incidence and Persistence of Energy Poverty in Australia

• Published date: 01 December 2022
• Author: Esperanza Vera‐Toscano,Heather Brown
• Date: 01 December 2022
• DOI: http://doi.org/10.1111/1467-8462.12493

The Australian Economic Review, vol. 55, no. 4, pp. 515–529 DOI: 10.1111/1467-8462.12493

Empirical Evidence on the Incidence and Persistence of Energy

Poverty in Australia

Esperanza Vera‐Toscano and Heather Brown*

Abstract

Energy poverty is a temporary condition, yet a

non‐negligible share of the Australian population

suffers persistent energy disadvantage. Using the

Household, Income and Labour Dynamics in

Australia (HILDA) survey, we observe that single

individuals, single‐parent households and those

with a disabled household member are at high

risk of persistent energy poverty. This is also true

for non‐working individuals and immigrants from

non‐English‐speaking countries. Nevertheless,

highly educated individuals, those living in

metropolitan areas and homeowners are less

likely to persistently experience energy poverty.

Government investment in energy eff‌iciency is

crucial to reduce electricity bills and have

healthier homes.

1. Introduction

Household energy prices have climbed sub-

stantially in Australia since 2007 (the cost of

electricity has increased by 76 per cent in real

terms and gas prices by 53 per cent), with

households on low incomes spending a higher

proportion of their income on energy than

those on high incomes (Azpitarte, Johnson

and Sullivan, 2015). On average, low‐income

households spend 6.4 per cent of their income

on energy, while high‐income ones spend far

less relative to their incomes—an average of

1.5 per cent. The situation for many low‐

income households has gone from bad to

worse, and one in four of these households are

now paying over 8.8 per cent of their income

in energy, a f‌igure that goes up to over 9.7 per

cent for those households relying on income

support payments such as Newstart/

JobSeeker

1

(ACOSS and Brotherhood of St.

Laurence 2018; Bryant et al. 2022).

Australia is a vast country with a variety of

climatic regions, from tropical areas to deserts

and cool and rainy regions. Both federal and

state governments are responsible for putting

in place policies that maintain the energy

supply, improve energy eff‌iciency and provide

the necessary support programs for those most

in need.

An individual is considered energy poor if

they cannot suff‌iciently heat/cool their home

because of a lack of resources or the

ineff‌iciency of the housing insulation and

heating/cooling (Boardman 1991, 2012;

Bouzarovski, Petrova, and Sarlamanov 2012;

* Esperanza Vera‐Toscano: Melbourne Institute, Applied

Economic and Social Research, University of Melbourne,

Faculty of Business and Economics Building, 111 Barry

Street, Melbourne, VIC 3010, Australia; Heather Brown:

Department of Health Research. Faculty of Health and

Medicine, Lancaster University, Sir John Fisher Drive,

Lancaster, LA1 4AT, United Kingdom. Corresponding

author: Esperanza Vera‐Toscano, email <e.veratoscano@

unimelb.edu.au>.

© 2022 The Authors. The Australian Economic Review publishedby John Wiley & Sons Australia, Ltd on behalf of The University of

Melbourne, MelbourneInstitute: Applied Economic & Social Research, Faculty of Businessand Economics.

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use and distribution in any medium, provided the original workis properly cited, the use is non‐commercial and no modif‌ications or

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