Structural drivers of energy inequality: Evidence from indigenous Australians

Energy inequalities exist between nations and between groups within nations, reflecting differences in access to resources, infrastructure, and financial security. This paper provides the first national-level analysis of Indigenous Australians' experiences in the energy market, measuring the scale, persistence, and structural drivers of energy inequality. Using repeated cross-sectional regressions with 2003–2023 Household, Income and Labour Dynamics in Australia (HILDA) data and 2022–2024 Energy Consumers Sentiment Survey data, we examine difficulties in paying energy bills and self-reported inability to heat homes as indicators of energy stress. The analysis reveals the central role of structural factors such as financial buffers rather than Indigenous status itself, highlighting how institutional and economic constraints shape equitable access to essential energy services.

In 2023, we find that Indigenous households are at least 14 percentage points more likely to experience energy stress through being unable to pay bills on time, and around 9 percentage points more likely to be unable to heat their homes. Around three-quarters of the observed variation is due to differences in access to emergency funds. Wealth is the strongest driver of energy stress, with housing tenure, education, and financial resilience also contributing. Objective indicators such as arrears, disconnections, and hardship program use explain around half the difference and help identify at-risk households. Energy stress is persistent: households with prior difficulties were 47 points more likely to face similar challenges. These findings show energy stress is not merely a matter of short-term affordability but reflects structural inequality that shapes energy demand and market participation. Policies focused solely on income support are unlikely to eliminate these disparities; targeted interventions, such as government-backed emergency funds, can strengthen resilience and influence energy market outcomes.