The price of power: How ‘energy poverty’ could have changed the outcome of the election
Without the Albanese government’s Labor’s energy policies, the recent federal election could have had a very different outcome.
Amid rising household electricity and gas prices, research released today shows a direct correlation between ‘energy poverty’ and voting patterns in Australia.
The study from the Melbourne Institute of Applied Economic and Social Research at the University of Melbourne sheds light on how the struggle to pay energy bills can influence voting preferences and potentially shape a country’s political landscape.
It reveals that one in seven (around 14 per cent) of Australian households identify as being energy poor and are less likely to support either major party – Labor or the Coalition.
Recent polling from the Australian election suggests that the Coalition got 32.2 per cent of the primary vote, while minor parties and independents received 33.1 per cent. This is likely to be the first time that the minor party vote is set to beat a major party.
Energy poverty is defined as the inability to afford basic energy services, such as heating and cooling a home, to achieve a decent standard of living.
Data from the Melbourne Institute – Roy Morgan Taking the Pulse of the Nation (TTPN) survey reveals that energy-poor households are 1.4 times more likely to vote for right-wing, populist minor parties.
However, we observed in the recent election that the Labor party successfully campaigned on energy policies that included subsidies and their energy relief package is likely to have softened perceptions that renewable energy is associated with higher energy costs.
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In contrast, the Coalition’s nuclear policies lacked significant detail and were devoid of financial compensation, potentially contributing to their less favourable outcome.
As observed in consecutive Australian election campaigns, energy policy is an increasingly polarised issue.
Labor, the Greens, and Teal independents push for decarbonisation, which can potentially lead to short-term price hikes.
The Coalition frames these policies as the culprit for high electricity prices, and far-right parties like One Nation and Trumpet of Patriots blame Australia’s commitment to international climate agreements.
These messages resonate profoundly with those struggling to keep the lights on.
Who are these energy-poor voters? They’re not a monolithic group.
Data from the Household, Income and Labour Dynamics (HILDA) Survey shows us that they are young people grappling with high housing costs, households who have members with long-term illnesses, families with young children, the unemployed, and disproportionately women and Indigenous Australians.
More importantly they’re our neighbours in regional areas, where energy alternatives are limited and costs run high.
Since 2001, 2-4 per cent of the HILDA Survey respondents have reported being unable to adequately heat their homes due to financial constraints, and about 14 per cent of households have consistently struggled to pay their bills on time.
The new research also shows that the Coalition’s fossil fuel-aligned stance appears to resonate more with the energy poor demographic and those in energy poverty reduce their support for Labor more than they do for the Coalition.
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While this seems to contradict the recent Labor win, we can speculate why this has occurred by using international voting trends.
In 2011, energy poverty reached its peak, reflecting wholesale market and network costs.
Through the following decade, there were modest reductions in energy poverty.
Between 2022-2023, Australians experienced another spike in energy poverty as a result of the COVID-19 pandemic and the Russia-Ukraine conflict, which generated sustained inflationary pressures across global economies.
These escalating global pressures are not only affecting Australians. Similar patterns have been observed in the US and Europe, where economic insecurity fuels right-wing populism.
As energy poverty rises, so does the potential for political instability and the erosion of support for climate action. These patterns align with protest voting theories, where economic hardship drives voters towards non-traditional political options.
There are examples to draw on from recent elections in Spain and Sweden. In both instances, governments successfully campaigned for policies to phase out fossil fuels.
Their policies were coupled with clear communication around the nuances of transition strategies and most importantly, economic compensation was provided to affected communities.
This research linking energy poverty to voter disaffection is just one of the empirically proven reasons for us to understand this political shift away from the major parties.
By understanding these political trends overseas, we can likely infer that energy poverty has influenced our recent election.
Political leaders in Australia must find a way to balance the urgent need for climate action with the immediate economic realities we face. Failure to do so can lead to voter disaffection, where people feel the policies have failed them in terms of energy affordability.
How political leaders tackle this complex issue may influence Australia’s political landscape and policy directions.
Balancing policy that addresses immediate economic pressures and long-term environmental goals to combat climate change can only be successful if they do not inadvertently alienate vulnerable populations.
Dr Kushneel Prakash is a Melbourne Postdoctoral Fellow at the Melbourne Institute: Applied Economic and Social Research at the University of Melbourne.
He will be presenting the findings of the energy research he co-authored at the upcoming Melbourne Economic Forum.
