Australians are facing skyrocketing power rates due to an energy crisis, and Anthony Albanese’s administration is open to subsidizing electricity prices.
Due to a gas scarcity, outages at coal-fired power plants, and a cold spell, the Labor government is considering measures to relieve pressure on homes.
Last Monday, the price comparison site Finder warned that electricity prices in July could quadruple.
With Europe grappling with rising expenses in the aftermath of Russia’s invasion of Ukraine, the British government announced in October that all homeowners would receive a one-time $690 (£400) power bill refund.
When asked if the Australian government would explore a similar move, Employment Minister Tony Burke told ABC radio that the government is willing to consider it.
At this time, we haven’t ruled anything in or out.
Tony Burke, Minister of Employment, on Power Bill Subsidies
‘At the moment, we’re not ruling anything in or out,’ he said.
Mr Burke said the Coalition’s last Budget in March included cost-of-living assistance, including a higher tax return for people earning less than $126,000, which will help families struggling to afford their bills.
‘There were payments that were bipartisan that came down in the last budget that we supported, and we’re not putting anything more than that on the table at the moment,’ he said.
But asked again about the possibility of subsidies, the minister did not rule them out, saying: ‘We’re working through everything with respect to what’s happening with this perfect storm of of energy prices at the moment.’
Mr Burke said the government’s argument to the Fair Work Commission that all minimum wage workers should receive a pay increase in line with the 5.1% inflation rate was part of the government’s cost of living response.
He chastised the Coalition for failing to prioritize renewable energy during the previous nine years.
‘Some of the concerns are international, but our ability to deal with those international issues is primarily domestic,’ he explained.
In October, the incoming Labor government will present its first budget, with Treasurer Jim Chalmers already discussing cost-of-living measures.
Various levels of power bill subsidies are already in effect in states and territories.
Victorian households get a $250 cash handout for simply signing up to the Energy Compare website while NSW households with dependent children can get a $180 discount.
In the year to March, wholesale electricity prices soared by 141 per cent.
In his first media conference as treasurer last week, Dr Chalmers warned of ‘skyrocketing inflation’ with the consumer price index climbing by 5.1 per cent – the fastest pace in two decades which is set to spark several more interest rate rises.
‘This perfect storm of energy price spikes is doing enormous damage to our employers, to our households and to our national economy,’ he said.
‘There are far more troubling aspects in our economy: skyrocketing inflation is a big challenge.’
Following the end of lockdowns in Sydney and Melbourne, Australia’s GDP increased by 0.8 percent in the March quarter, down from 3.6 percent in the last three months of 2021.
However, according to Australian Bureau of Statistics data, wages are only expanding by 2.4 percent, less than half of the official inflation rate of 5.1 percent.
It comes as homeowners’ mortgage payments are expected to rise as the Reserve Bank raises interest rates for the second time on Tuesday.
Last month the RBA raised the cash rate from a record low 0.1 per cent to 0.35 per cent – the first increase in more than a decade – and warned further hikes can be expected in coming months to curb high and rising price pressures.
Economists expect an increase this month of a least another 25 basis points, or perhaps even 40 or 50 basis points this time around.