Joint Submission to the Victorian Default Offer Review 2025-26
The Victorian Default Offer (VDO) has provided an important safeguard for consumers that are unable or unwilling to engage with the electricity retail market, and a key benchmark price for market offers. The VDO directly serves around 13 per cent of households and 20 per cent of small businesses, and since September 2020, operates as the maximum price for embedded networks (around 180,000 customers). As the VDO is a benchmark, market offers tend to be priced below it, and so the VDO also indirectly influences the bills paid by all Victorian electricity users.
Broadly speaking, the VDO has been largely successful in its objectives, especially in eliminating unreasonably priced standing offers. The Victorian Council of Social Service (VCOSS) strongly supports the continued operation and regular review of the VDO.
Currently however, high costs for essential services like electricity are causing severe hardship among the cohorts that social and community services support. These organisations are experiencing unprecedented demand from Victorian households that are struggling to absorb mounting cost of living pressures.
This is critical context for the ESC’s deliberations. In this submission, we emphasise the need to recentre people in pricing decisions, put less emphasis on retailer profit margins, and more focus on the wellbeing of Victorians experiencing financial pressures limiting their capacity to pay for an essential service.
This is a joint submission made by VCOSS, Brotherhood of St. Laurence, Consumer Action Law Centre, Council of the Ageing Victoria, Energy Consumers Australia, Financial Counselling Victoria, and Uniting. This group brings a deep knowledge of people’s experiences navigating the Victorian electricity market and the impacts of energy hardship and poverty. Collectively, we work towards a Victoria free from all forms of hardship, where everybody can experience genuine wellbeing.