The real frontline against the ‘cost of living’

ANALYSIS

As we hurtle towards election day the “cost of living” is a key battleground.    

Increases in what we pay for energy, food, fuel and housing are hitting people hard.  Organisations delivering emergency support to those in financial strife are busier than ever, including helping people who have never needed it before. About 11% of Victorians live in persistent poverty, with many more on the brink.    

But while prices may rise uniformly, the impact of these rises is felt very differently.  

Everybody claims to be feeling the financial pinch, but we need to acknolwedge the uncomfortable truth that some Victorians are feeling it more acutely than others.    

Take the example of two families.   

One family can’t afford tonight’s dinner or medicine for the kids. The parents work hard, but don’t earn a huge amount. It’s not clear how next week’s rent will be paid. Every day, this family is forced to “choose” between essentials like using the heater or buying fresh food. They are experiencing genuine and severe cost of living distress.    

Across town, a different family is also watching prices rise.  Petrol and groceries are more expensive, and their housing costs are growing. But at the end of the day this family benefits from secure and well-paying employment. They can access money if they need to. They might need to cut back on a holidays or nights out, but they’re fundamentally okay.   

Both families are feeling the strain, but it’s not the same.

One is poverty, the other is inconvenience.   

Inconvenience requires empathy, but poverty demands government action.   

We have seen some strong, well-designed policies to make life better for those most in need this election. The most recent was Labor’s pledge for government-owned and operated low-fee childcare in disadvantaged neighbourhoods that are currently childcare “deserts”.   

But too many election pledges haven’t made the distinction between helping those in acute need and helping those who are stressed and inconvenienced. They have been short-term in nature and poorly targeted, if targeted at all.   

People on higher incomes might want a few dollars off their power bill, but it won’t make a material difference to their lives. 

The electoral allure of broad cost of living pledges is obvious. No voter feels they’re missing out. Everyone is happy to save a few bucks.   

But addressing the cost of living is about more than giving money or free things to the Victorian community at large. This easy, short-term approach won’t deliver the structural reforms required to address underlying drivers of our current crisis.  

A sensible first step is really targeting help to those who need it the most.  Better targeting help would allow the parties to be more generous or rollout more assistance programs.   

Sometimes the best responses are right in front of us.   

Roughly 14% of Victorians who are eligible for a power bill concession—that’s as many as 130,000 people—don’t currently receive it.   

These people are predominately low-income earners. They either don’t know the concession exists or that they’re eligible, or are unsure how to apply. Or they need a little help because they don’t speak English or don’t have the devices, data plans or digital skills required to apply online.  

We should be proactively helping these people get the deal they’re entitled to.

Further, more than 16,500 households are currently receiving help from their energy provider but still can’t afford to pay their next bill.  These households owe an average of $2056. That’s not much for a power company or the Victorian Government, but a fortune to somebody on a low income. Non-payment risks disconnection from an essential service.  

The next state government should provide a one-off ‘Utility Debt Demolition’ payment of up to $2000 to help these households clear their lingering energy debts.  

Other solutions are not as obvious.

That’s why VCOSS is calling for the establishment of an independent Cost of Living Commissioner to lead collaborative reform work addressing challenges that sit across multiple areas of government. These would include concessions, food security, telecommunications affordability and accessibility, and housing.   

The Commissioner would have a mandate to look across state services and private markets, and consider national factors.  They would be a problem solver, tasked with helping departments break free from bureaucratic silos.  

The party that wins on Saturday will be governing a state where rent stress is high, more than 100,000 people are waiting for social housing, one in six children live in poverty and roughly 180,000 people struggle for food.  

Lasting solutions won’t be found in universal cash-splashes, short-term payment freezes or cute gimmicks.  

Serious reforms are needed to curb rents, boost social housing beyond the Big Housing Build, address food security and ensure no Victorian is left behind as we transitions to cheaper renewable energy generation.    

This is the real frontline in the cost of living. ∎

(This article first appeared in The Age.)