Australia's economy would be up to $17 billion bigger with an accelerated rollout of thermal efficiency upgrades, electrification and rooftop solar to low-income housing, according to a new Deloitte Access Economics report.
ACOSS and the State and Territory Councils of Social Service (the COSS Network) have used the Deloitte report to call on federal, state and territory governments to substantially and urgently increase investment in home energy upgrades for low-income housing. This investment is vital to plug the gap in Australia's energy transition that risks leaving millions of people in low-income housing behind undermining social licence for change.
The COSS Network has written to Energy Ministers ahead of the Ministers' meeting this Friday calling for the Federal Government to establish a national fund in the MYEFO budget to accelerate upgrades. It would start with $2 billion in the first year, scaling up each year with contributions from other sources.
The ACOSS-commissioned Deloitte Report concludes that an accelerated home energy upgrade program could drastically reduce energy poverty for people struggling to heat and cool their housing. Large scale investment would deliver ongoing and significant energy bill savings, create thousands of jobs and supercharge the energy transition.
The Deloitte analysis looked at 'modest' thermal efficiency upgrades and electrification, plus rooftop solar, for 1.2 million homes over seven years. Economic activity generated by construction, indirect employment and household bill savings would generate up to $17 billion in Gross Domestic Product over the life of the upgrades.
This would create an average of 12,700 full-time equivalent jobs annually across the construction, installation, manufacturing and services sectors peaking at 22,550 in 2028. It would also shave $3,350 off the average household's annual energy bill.
'Quick fix' thermal upgrades and electrification alone, without rooftop solar, would still generate up to $10 billion in Gross Domestic Product. It would create an average of 7,160 jobs, peaking at 12,630 in 2028 and would lead to an average national bill savings of $1,650 per household a year.
Quick-fix upgrades would also achieve emissions reductions equivalent to taking 750,000 cars, roughly 5% of the country's registered vehicles, off the road and avoid $3 billion in emissions abatement costs.
ACOSS CEO Dr Cassandra Goldie AO said:
"Inefficient homes that cost thousands of dollars to heat and cool are leaving people in energy poverty, making them sick and standing in the way of the energy transition.
"While tens of billions of dollars have been pumped into industrial clean energy, households are the missing piece of the puzzle.
"We can't keep prioritising investment in profitable big industries ahead of people who are doing it tough and struggling to afford housing, energy, transport, medicine and put food on the table.
"The $300 million provided to roll out energy upgrades to 60,000 social housing dwellings (15% of all social housing) is a welcome step in the right direction. But the government cannot afford to stop here if it wants to put people who are struggling as its first priority, and build the social licence needed to accelerate the energy transition. First Nations housing must be a first priority, alongside large scale rollouts for public, community and private rentals and low income home owners.
"Scaling up and accelerating home energy upgrades to cover 1.2 million low-income homes will combat energy hardship, reduce illness caused by extreme temperatures and alleviate strain on the healthcare system.
"Targeted funding will bring down the upfront cost of upgrading low-income housing, create jobs, lower emissions and strengthen the economy."
Deloitte Access Economics Partner Claire Ibrahim said:
"Energy upgrades for low-income households present a $10 to $17 billion opportunity to accelerate investment in decarbonisation while lowering energy bills and emissions.
"Households have been largely neglected in efforts to decarbonise Australia so far. But retrofits and ensuring new dwellings are climate smart will be essential to reaching net zero."
"Well designed energy upgrades for low-income housing will ease the cost of living and drive sustainable economic growth as Australia shifts to a green economy."
Note for editors: Low-income housing in this report refers to public, community and First Nations-controlled housing as well as low-income owner occupiers and low income private rental properties.
