If you do nothing, you get put on the most expensive plan
Each July, Australia's energy market quietly divides households into two groups: those who read the fine print and those who don't. While wholesale electricity prices have genuinely fallen and government default offers are declining, the market does not automatically reward inaction — some households face bill increases of up to 16 per cent simply because they stayed still. The promise of cheaper power is real, but it belongs only to those willing to reach out and take it.
- Some Australian households are about to see power bills rise by as much as 16 per cent in July, directly contradicting government messaging about cheaper electricity.
- Energy providers are sending letters this month that contain the critical answer — buried in a single sentence comparing your plan to the reference price — but most people won't know what to look for.
- The market is structurally designed to place inactive customers on the most expensive available plan, effectively penalising those who don't engage.
- Government comparison tools like Energy Made Easy exist and work, but the 10-to-15-minute task of switching falls entirely on the consumer — there is no automatic safety net.
- Those who compare and switch in July could save hundreds of dollars annually; those who don't will quietly subsidise the savings of those who do.
The government has been promising Australians relief on power bills from July — wholesale prices are down, default offers are falling. But for a significant number of households, the opposite is true. Some will see bills jump by as much as 16 per cent, caught in the gap between official messaging and market reality.
Energy providers have been sending letters this month explaining what's changing. Most households have received one. Buried inside is a single sentence that matters more than anything else on the page: how your new plan compares to the electricity reference price. If it sits above that benchmark, your bill is going up. If it's at least 10 per cent below, you're in good shape.
The structural problem is that doing nothing places you on your retailer's most expensive option. The market rewards attention and punishes passivity. A money expert put it plainly: retailers should automatically move inactive customers to their cheapest plan. They don't.
The fix, however, is not complicated. Once a year, in July, a 10-to-15-minute visit to Energy Made Easy or a state-based tool like Victorian Energy Compare can reveal cheaper plans and allow an immediate switch — potentially saving hundreds of dollars annually.
Most people won't do it. They'll set the letter aside and accept whatever bill arrives. The ones who take the time will be fine. The ones who don't will quietly fund the savings of those who did. The government's promise of cheaper electricity is real — but only for those willing to claim it.
The government has been telling Australians to expect relief on their power bills come July. Cheaper electricity is coming, the messaging goes—wholesale prices have fallen, default offers are dropping, and households should brace for savings. But that story is only half true. For some Australians, the opposite is about to happen. Some power bills will jump by as much as 16 per cent next month, catching households off guard in the gap between what they've been promised and what their actual bills will show.
The disconnect is real enough that it's catching people by surprise. Energy providers have been sending letters to households this month explaining what's about to change. Most people have probably received one. The letter contains the answer to whether your bill is about to go up or down, but you have to know where to look for it. Buried in that letter is a single sentence that matters more than anything else on the page: a comparison between your new plan and what's called the electricity reference price. That sentence will tell you whether your new arrangement sits above or below that benchmark. If it's above, you're about to pay more. If it's below—ideally 10 per cent below—you're getting closer to the deals that will actually save you money.
The problem is structural. The system doesn't automatically put you on the cheapest plan available. It does the opposite. If you do nothing, if you ignore the letter and wait to see what happens, you'll be placed on the most expensive option your retailer offers. That's how the market works right now. It rewards people who pay attention and punishes those who don't. A money expert at a major broadcaster put it plainly: people shouldn't have to do this work, but they do. Every retailer should simply move inactive customers to their cheapest plan by default. They don't.
The good news is that the work required isn't actually that demanding. Once a year, in July, you can spend 10 to 15 minutes switching providers if yours is one of the ones raising rates. The government has built websites specifically for this—Energy Made Easy at the national level, and state-based tools like Victorian Energy Compare—that list every plan on the market. You can see what's available, compare what you're currently paying, and move to something cheaper. Do that once annually and you could save hundreds of dollars a year. It's not automatic, and it shouldn't have to be this way, but it works.
The catch is that most people won't do it. They'll open the letter, feel confused, set it aside, and in July they'll just accept whatever bill arrives. Some will be pleasantly surprised. Others will be angry. The ones who take 15 minutes to look at their options will be fine. The ones who don't will subsidize the ones who do. That's the real story beneath the government's promise of cheaper electricity—the promise is real, but it only applies to people willing to claim it.
Notable Quotes
The messaging has been that government default offers are coming down and electricity wholesale prices have come down, but it's not necessarily the case for everyone— Joel Gibson, Today money expert
If you do nothing, you get put on the most expensive plan. All you have to do is switch on for 10-15 minutes once a year and you can save hundreds of dollars— Joel Gibson, Today money expert
The Hearth Conversation Another angle on the story
So the government is cutting electricity prices in July, but some people's bills are going up. How does that work?
The wholesale prices and default offers are genuinely falling. But not every household is on a default offer anymore. Some are on plans that were locked in earlier, or on plans their retailer has chosen for them. Those plans don't automatically improve just because the market has shifted.
So it's not the government lying, it's just that the benefit doesn't reach everyone equally.
Exactly. The benefit reaches people who are paying attention. If you read your letter and switch providers, you get the savings. If you don't, you might end up paying more while your neighbor pays less, even though you both live on the same street.
Why would a retailer put someone on an expensive plan if a cheaper one exists?
Because you're not paying attention. If you do nothing, they keep you where you are or move you to their most profitable option. There's no incentive for them to volunteer to make less money from you.
And the government websites—are they actually useful, or are they just bureaucratic theater?
They work. Energy Made Easy and the state comparison tools show you every plan available. The hard part isn't finding the information. It's remembering to look once a year and actually doing it. Most people won't.
So the real story is that the system works, but only for people who treat it like a job.
Yes. And that's a problem, because it shouldn't be a job. But right now, it is.