NSW Budget 2022-23 Analysis: Cost of Living - NCOSS

Challenge

The past two years has placed unprecedented pressures on people in NSW. The combination of natural disasters, the pandemic, supply chain disruption and the Russian invasion of Ukraine has seen the costs of everyday essential items reach extraordinary levels, at the same time that wages growth has stalled.

Additionally, households on low incomes or below the poverty line are facing higher energy costs. These households are more likely to be living in older, poorly performing housing stock, renting and in a home with low thermal performance and low energy efficiency fixtures and appliances. They are also more likely to limit or avoid heating or cooling to reduce energy costs.

What’s in the 2022-23 Budget?

Energy

$128 million (over eight years) for the Energy Bill Buster program which replaces the Empowering Home pilot.
Eligible households can apply to get a free solar system or energy savings upgrade that can save them up to $600 each year.
Households that live in apartments or are renting are eligible for up to $4,000 in energy efficiency upgrades for appliances, fixtures or thermal performance (e.g. draught sealing, window shading).
Households taking up these offers would have to forego applying for an energy rebate such as the annual $285 Low Income Household Rebate for up to 10 years.
The 2022-23 budget allocates funding for the program to help up to 30,000 households initially, with further funding to be considered based on uptake.
NSW Government has temporarily increased the cap under the Energy Accounts Payment Assistance (EAPA) scheme to $300 to $400 per year for households struggling to pay their electricity and gas bills.

Education

$193 million for the Back to School Subsidy, providing $150 to every NSW schoolchild towards the cost of school supplies in 2023.
$177.9 million ($1.317 billion over 4 years) for the Brighter Beginnings Affordable Preschool initiative to provide fee relief for families with children across the community and mobile preschool and long day-care sectors. The Affordable Preschool Program will replace Start Strong Free Preschool from 2023 and will provide:
up to $4,000 per year in fee relief for 3, 4 and 5-year-olds attending a community or mobile preschool
up to $2,000 per year in fee relief for 4 and 5-year-olds attending preschool in a long day care setting.

Travel

$98 million for a two-year pilot of a $250 prepaid travel card for university students and apprentices in regional NSW each to ease cost of travel.
$520 million (over two years) to deliver the new broad-based Toll Rebate Scheme where, every quarter, eligible non-business and small business customers will receive a 40 per cent cash rebate for every dollar spent on tolls once they have reached a minimum of $375. The maximum annual benefit available to each eligible customer is $750.
This rebate scheme replaces the existing Registration Relief Scheme.

Service NSW

$73.4 million ($536.3 million recurrent expenses over four years) enabling Service NSW to respond to growing demand across frontline and digital channels as well as providing additional resources to assist with complex transactions and enquiries to improve the customer experience.

What does it mean for those doing it tough?

The increasing cost of energy bills places a large burden on households, who require energy for their health and wellbeing. The introduction of the Energy Bill Buster program increases the number of low-income households that are now eligible for free solar systems or energy efficiency upgrades. However, while this program and the extension of EAPA is helpful, it is not enough for large families with huge bills or for those families living in energy inefficient houses.

Increased affordability and accessibility to preschool programs for all NSW families irrespective of the setting will provide vital early years learning and support for parents and carers to access and maintain employment.

The new Toll Rebate Scheme could double the number of motorists that are eligible for receiving toll relief. Households on lower incomes are generally located in suburbs that also tend to be poorly serviced by public and transport which means that they rely on toll roads for their daily commute to work or accessing services or participating in community life etc.

The regional travel cards for students and apprentices are welcome, although challenges around the availability of regional public transport options remain and it is unclear whether these cards could be used to pay for fuel where private car use is the only option.

What is needed?

Further action is needed to reduce the cost of essential goods and services for households, with a focus on those doing it toughest. Services are seeing more low-income households needing food or financial assistance to cover the cost of essential goods.

Cost of Living schemes provided by the NSW government should include funding to resource trusted place-based NGOs to act as gateways to Service NSW offerings, providing information, access to IT and assistance to navigate complex application processes. NGOs continue to play a significant role in helping vulnerable people navigate complex application processes, but this role is not resourced and places a strain on delivery of other critical services.

The design of the Energy Bill Buster program should guarantee that low-income households who forego their rebate are better off financially and able to meet their energy needs to support their health and wellbeing. The increased cap to EAPA vouchers should be made permanent with the vouchers being able to be used for all energy types. Additionally, administering EAPA is burdensome and complex for NGOs with no additional resources. Administration of the scheme should be simplified with NGOs being reimbursed for the administrative costs they incur from assisting with the process.

Further information

Budget responses from the sector:

NCOSS

Sector priorities:

Read our analysis on other policy areas below:

Introduction

Housing and Homelessness

Women's Opportunities

Domestic and Family Violence

Media release:

Big Spending Budget Fails Those Most in Need