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Legislative Council - Fifty-Second Parliament, Second Session (52-2)
2013-02-06 Daily Xml
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STATE GOVERNMENT CONCESSIONS

The Hon. M. PARNELL (16:36): I move:

That this council—

1. Notes that state government concessions for low income households in South Australia have not been comprehensively reviewed for over ten years and have not kept up with price rises; and

2. Calls on the government, as a matter of urgency, to comprehensively review all concession arrangements to ensure that all South Australians have access to affordable energy, water, public transport and other public utilities and services.

The cost of living is never far away from the thoughts of most South Australians and for people on low incomes the range of concessions offered by the state government on utilities, transport, council rates and other services is crucial to help them afford the basic necessities of life. This is particularly the case with water and electricity, which have seen huge price rises over recent years.

Who gets these concessions? The eligibility varies according to the service, but for present purposes using the example of energy concessions, we find that South Australia has one single standard energy concession—it is called the energy rebate. It is capped at $165 per year or 45¢ per day and that can be applied to electricity or gas. Energy customers who have a commonwealth seniors health card, a healthcare card or a Department of Veterans Affairs gold card are eligible for the South Australian energy concession. There are almost 193,000 state electricity concession recipients in South Australia, which accounts for just over one quarter of the residential customer base.

The amount that householders are spending on these utilities is increasing. As SACOSS pointed out in its budget submission to the state government last year, their calculations were that the lowest household income quintile spends nearly twice the proportion of their income on energy as those households in the highest income quintile, despite using only about half the power consumed by those in the top quintile. Utility costs therefore impact disproportionately on low income households, who often have few options to reduce their energy and their water costs.

Members would be aware that yesterday the St Vincent de Paul Society released a report entitled 'The relative value of energy concessions'. This report undertakes a comparison of energy concessions in four different states. The manager of policy and research for St Vincent de Paul was on a number of media outlets yesterday, including 891. David Bevan asked him, 'So, if you're poor, what's the best state to be in and what's the worst state to be in?' The answer from Mr Gavin Duffy:

If you're poor, the best state to be in would be Victoria that has a 17.5% year-round electricity discount off your electricity bill and that would be for all healthcare card and pension card holders. Probably the worst, if you're looking at dollar value, or through our lens anyway, would be South Australia, because you have the highest energy prices but also a fixed $165 for concession.

The interstate comparison undertaken by the St Vincent de Paul Society uses as its starting point a fairly typical average, so if we take a South Australian household that is using 6,400 kWh of electricity per annum, their bill is around $2,350 after concessions, but in Queensland the annual bill would be $850 less and it would only be $1,500 per annum. The Victorians get the greatest discount at 16 per cent, whilst at the opposite end of the scale, as I have said, the South Australian concession averages out to be only about 7 per cent of the annual bill for households.

The call in this motion for a comprehensive review of concessions mirrors the call that was made by SACOSS (South Australian Council of Social Service) in its budget submission to the state government last year. In fact, it is listed in that submission as priority number one. Two years ago, members might recall, SACOSS held a cost of living summit, and the outcome of that summit is that there was consensus amongst the industry representatives, consumers, the NGOs and the academics who participated in the workshop on utilities that the concession system was not working and it was in need of a fundamental review.

According to SACOSS, apart from the quantum of concessions, a review should also consider ways to alleviate difficulties in accessing concessions, whether they are targeted to the right people and whether they address the right needs, given that technological change has made some services less important and other services with no concessions are increasingly vital, and they give the example of computer and internet access. I think we can all think of people who would rather not eat than lose their internet connection.

In relation to energy, SACOSS has even suggested that, given the establishment of the national energy market, the review into concessions should also consider the costs and benefits of transferring responsibility for concessions to the federal government. I also note that a similar call has been made by the Local Government Association. A media release they put out on 25 January entitled 'Rate concessions—about time!!' states:

The Local Government Association said it was about time that the State Government considered increasing Council rate concessions, for eligible ratepayers.

LGA CEO Wendy Campana said the LGA had been petitioning the Government since 2005 to increase the rates concession for pensioners and concession card holders.

She said she welcomed reports today that the Government was considering this increase, among a raft of initiatives to ease the cost of living burden on South Australians.

And the quote from Ms Campana:

The rates concession subsidy was last increased in 2002 when it was set at $194 per year. Since then, with the increased cost of living, including recent steep rises in utility costs, the LGA has argued that this subsidy is not sufficient. Detailed studies that we have conducted have indicated that the subsidy should be at least $250 to maintain parity with CPI.

So it is council rates, as well as electricity and water costs.

The Greens acknowledge that some concession payments have increased in the last few years, but we see these increases as ad hoc and we agree with SACOSS, that they are not necessarily targeted to those that best need them. I will conclude with a reference, again, to the St Vincent de Paul report and their summary which, I think, sets out the situation pretty well. The report concludes:

The analysis presented in this report has clearly highlighted vast differences in the assistance provided to low income households in South Australia, Victoria, New South Wales and Queensland to pay for energy costs. After years of price increases, reforms and moving towards a national energy market, including the development of a National Energy Customer Framework, energy affordability and assistance packages for low income Australians remain fragmented and largely untouched by intergovernmental processes.

Furthermore, the ongoing retail price deregulation agenda means that both the South Australian and New South Wales governments should immediately review their concession arrangements. We strongly believe that a percentage-based concession system is the most appropriate approach governments can take to promote energy affordability in markets where governments and regulators have handed over the price setting to retailers. Price deregulation will in all likelihood, produce a greater range of retail products and tariff structures (as seen in Victoria), and as percentage-based concession frameworks are more flexible, they can deliver adequate assistance in an equitable manner in a more rapidly changing energy market.

The calls are coming from all sides that the concession system needs to be reviewed. The Greens are adding our voice to that call and I commend the motion to the house.

Debate adjourned on motion of Hon. T.J. Stephens.

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