Program 3: Engaged Communities
RP3001: Resource Consumption and Household Affordability
- The Changing Nature of Utility Costs and the Distributional Implications Among Australian Households
This project will assess trends in household energy in relation to household structure, location, income, age and changes in energy prices. It will draw insights into energy usage patterns and which consumer groups are impacted by energy costs.
Program
Project leader
Prof. Terry Burke
Project status
Complete
Project period
02/2013 to 06/2015
- Publications
- Posters
- News
- Partners
Peer Reviewed Research Publications
RP3001: Household Energy Use Consumption and Expenditure Patterns 1993-2012
Using data from ABS Household Expenditure Surveys (HES) for 1993-94 and 2003-04 and the Housing Energy Consumption Survey of 2012, this report examines the changing nature of household energy use (electricity, gas, and motor fuel) over the last two decades, and assesses the impact of these costs on the household budget. It suggests arguments that electricity industry liberalisation has created new levels of fuel hardship may not be accurate.
It also investigates the impact of fuel costs (petrol, diesel and automotive gas), and concludes with observations about why the impact of motor fuel costs on the household budget does not recieve the level of attention of electricity or gas costs. Explanations include the different nature of the client-provider relationship, the absence of a concept of disconnection for motor fuel, and a perception (misplaced in many respects) that motor vehicle users have choices in ways that utility users do not.
RP3001: Household Energy Use Consumption and Expenditure Patterns 1993-2012 (646877 PDF)
RP3001: The Australian Household: Material Consumption and the Low Carbon Society
Energy use is integral to our lives. Without it, the standard of living Australians currently enjoy would be impossible. However this standard of living comes at a cost. Per capita levels of energy consumption in Australia are now some of the highest in the world and have also experienced the largest growth among comparable OECD countries over the last two decades. This presents a major challenge when trying to shift towards a more sustainable low carbon lifestyle.
This report explores aspects of household energy consumption in Australia and the influences that have caused household energy usage to rise. It considers how different academic disciplines explain household decision-making in relation to environmental issues, develops an integrated conceptual framework for understanding what drives household consumption, and includes a literature review to provide research evidence about the impact of policy interventions aiming to reduce energy consumption on households.
RP3001: The Australian Household: Material Consumption and the Low Carbon Society (642954 PDF)
CRCLCL Project Posters
Research Snapshot Poster - RP3001
Research Snapshot A3 size poster from Participants Annual Forum 2014
Research Snapshot Poster - RP3001 (742564 PDF)
News article
Energy costs hit low income households hardest and housing affordability stifles ability to pay - new study
Posted 25 August 2015 - 9:56am
A new study of household expenditure and energy use confirms that over the past two decades (1993-2012) low income households and those caught in the housing affordability trap felt the brunt of energy costs whilst higher income households were unaffected because income rose above inflation and in line with prices.
For low income families, energy costs rose from 5.2% to 5.6% of their household income and young singles, households with many children and renters were seen to be particularly vulnerable. A key issue for those struggling to pay bills was not the cost of energy itself but the cost of housing, with 63% of renters and 43% of purchasers having payment difficulties.
The report, produced for the CRC for Low Carbon Living by Professor Terry Burke and Liss Ralston, of Swinburne University and published online today, challenged the concept that freeing up the electricity industry markets has created new levels of hardship across the board.
“After analysing energy costs from 1993 to 2012 it is clear that for most energy costs have kept in line with income although lower income earners have felt the pinch more. Also due to the time period of the research many households had the opportunity to adapt their behaviour to reduce the impact of price rises on the household budget,” said Professor Burke.
The study found that the strongest indicators of difficulty in paying energy bills among low-income households were receiving government financial assistance or spending over 20% of income on housing—suggesting that even higher-income earners with large mortgages can struggle. Over two decades, the proportion of low-income households spending more than 10% of their income on energy rose from 11.7% to 18.5%, yet only 24% reported difficulty paying. Professor Burke noted that larger homes increased energy costs regardless of occupancy, with energy costs for couples in detached homes rising significantly with more bedrooms. The study also highlighted that petrol costs exceeded energy costs across all income groups, with low-income earners spending 6.9% of their income on fuel. When fuel prices rose, households adapted by reducing consumption. The report concluded that petrol’s greater impact on household budgets receives less attention, possibly because people have more alternatives to driving than to using utilities.
CRCLCL Project Posters
- Swinburne University of Technology