Media release: New consumer report makes practical recommendations on energy market reform

A new report from the Consumer Action Law Centre, A Policy Trilemma: creating an affordable, secure and sustainable energy market, authored by former UK EnergyWatch CEO and former Commonwealth Ombudsman Allan Asher, argues that the energy market has failed to deliver for Australian households and that relying on competition alone to address consumers’ needs is not enough.

‘Year on year energy price rises, particularly for those living on low and fixed incomes, has refocused politicians, policy makers and regulators on the question of whether energy market is delivering for consumers’, said Catriona Lowe, Co-CEO of Consumer Action.

‘The interests of the powerful energy industry have traditionally held sway, but it is now widely acknowledged that this has come at the expense of getting the best outcomes for consumers. We’re pleased that these issues have gained the public attention, and that policy makers are now refocusing to deliver benefits to energy consumers.’

Ms Lowe said that the new report clearly identified that the idea that deregulation and competition will, on their own, be enough to address consumer interests is naive.

‘Moves to further deregulate energy markets will not work unless measures are taken to protect consumers. We need oversight to ensure the market delivers efficient energy services and addresses the financial, environmental and infrastructure needs of Australian households.

‘It’s very easy to say consumers will benefit from market reforms, but it’s much harder to turn that into a reality. We need decisive action to simplify confusing pricing and demystify marketing. And we need greater enforcement of market rules to improve the behaviour of industry,’ said Ms Lowe.

The title of the report, ‘A policy trilemma’, identifies the central challenge facing the energy market—the need for it to deliver affordable, secure and environmentally sustainable energy services. The report identifies a number of ways policy makers can deliver tangible benefits to Australian households, including

  • Assisting consumers to engage in energy markets;
  • Strengthening energy network regulation, and regularly reviewing the powers and roles of regulatory institutions;
  • Ensuring regulators take an active approach to enforcement, in particular setting high industry expectations regarding compliance; and
  • Reducing energy demand in a way that ensures the vulnerable are not penalised.

The report also makes particular mention of energy industry developments in the United Kingdom and Europe where it has been widely acknowledged deregulation and increasing competition hasn’t led to significant consumer benefit.

‘Policy makers in Europe and the UK seem to have realised that market reform doesn’t mean letting the market run itself. For example, the report cites extensive measures taken in the United Kingdom to reduce the negative impacts of energy bills on low income households’ said Ms Lowe.

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Media Contact: Dan Simpson, 0413 299 567

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