What Victoria has changed
The change comes from Victoria’s Essential Services Commission (ESC), the state regulator that sets the rules electricity and gas retailers must follow. Under an update to the Energy Retail Code of Practice, any retailer that knows a customer has been on the same plan for more than four years must move that customer onto a fairer rate.
| Detail | What applies |
|---|---|
| Trigger | Same energy plan for more than four years |
| Electricity remedy | Moved to the Victorian Default Offer |
| Gas remedy | Moved to the median market offer |
| Start date | 1 July 2026 |
| Deadline for retailers | 30 June 2027, to cover every eligible customer |
| Penalty for non-compliance | Up to $244,212 per breach |
You don’t have to wait for your retailer to get to you. You can contact them at any time and ask to be moved onto a fairer rate.
Energy Minister Lily D’Ambrosio announced the change on 2 July 2026, describing the loyalty tax as a pricing model that lets prices quietly climb for customers who have little time to compare plans and switch.
Does this cover your business?
Most coverage of this change has focused on households, but the ban likely applies to small businesses too. Victoria’s Energy Retail Code of Practice generally protects domestic and small business customers as one group, and this rule sits within that code.
That said, eligibility depends on how much electricity or gas your business uses each year. Businesses above a certain usage level are treated as commercial or large customers on separately negotiated contracts, and the loyalty tax rule may not apply to them in the same way. If you’re not sure which category your business falls into, t work with us to have your bill and contract reviewed on your behalf.
A fairer rate wherever you are
This ban only applies in Victoria. Victoria regulates its own electricity and gas retail market through the ESC, separately from the rest of the country.
Nationally, the Australian Energy Market Commission (AEMC) looked at a similar ban as part of its 2026 Pricing Review. Its final report, released in June 2026, stopped short of one. Instead, retailers elsewhere will eventually have to tell long-term customers how much more they’re paying than someone on a better deal, without being required to fix it automatically. Consumer groups, including Energy Consumers Australia, called this a missed opportunity.
If your business is in Queensland, New South Wales, South Australia or Tasmania, nothing changes automatically for you yet. The responsibility to check your plan and switch still sits with you, which is what Choice Energy can help with.
What to do next
Whether or not the Victorian ban applies to your plan, the fastest way to know if you’re overpaying is to have your current plan checked against what’s available now.
At Choice Energy, we review your electricity and gas plan, compare it with the current market, and negotiate with your retailer or find a better deal if one exists.
Victorian businesses can find out more from our energy brokers in Victoria, or compare Victorian business energy plans. If you’re in Queensland, New South Wales, South Australia or Tasmania, our energy brokers in Australia can do the same for your state.
Loyalty Tax FAQs
Does the loyalty tax ban cover small businesses?
Likely yes, if your business is within the usage threshold that defines a small business customer under Victoria’s Energy Retail Code. Larger commercial and industrial customers on separately negotiated contracts fall outside this protection. Check with your retailer, or have your plan reviewed, to confirm which category applies to you.
What counts as an old energy plan under the new rules?
Any electricity or gas plan you’ve been on for more than four years counts as old. Retailers must check these plans and move eligible customers to a fairer rate.
How do I find out if my business is already at a fair rate?
Compare your current rate against what your retailer, or the wider market, currently offers new customers. Choice Energy can run this comparison for you as part of a free energy bill health check.
Is the Victorian Default Offer the cheapest electricity rate available?
Not necessarily; the Victorian Default Offer is designed to be a reasonable, capped rate, not the lowest price on the market. Businesses after a competitive rate available deal may still need to compare offers
What happens if a retailer doesn’t comply?
Retailers that fail to move eligible customers onto a fairer rate can face penalties of up to $244,212 per breach. Read the official Victorian Government announcement or the Essential Services Commission’s rule summary for the full regulatory detail.
