Chalmers ends energy rebates as budget bites

The Albanese government’s $300 power bill subsidy will be scrapped at the end of the year, Treasurer Jim Chalmers has announced, in a press conference foreshadowing tough calls to come in his budget update later this month.

“This marks a shift in the way that we are delivering cost-of-living relief,” Chalmers said in a press conference in Canberra. “This is a shift from temporary measures, first decided when inflation was almost 8 per cent, a shift towards ongoing cost-of-living help.”

“This wasn’t an easy decision, but it’s the right decision. This was a difficult call that we made as a cabinet, but it’s the right call.

“It recognises the pressures on the budget, recognises that there is more than one way to provide this cost-of-living relief that people still need in their household budgets.”

The subsidy, which offered a $75 reduction to quarterly electricity bills and went to all households and many small businesses, was extended for six months in this year’s budget. Along with substantially larger state government subsidies, it helped push down electricity prices.

Without those subsidies, electricity prices would have climbed by 22.2 per cent since mid-2023. Instead, they have risen by 8.2 per cent.

Extending the subsidy into 2026 would cost the government an estimated $2 billion.

Chalmers said the next stage of Labor’s tax cuts would provide more effective cost-of-living relief than the energy subsidies.

“We’re providing help with electricity bills via the tax system and by providing other cost-of-living help, and as I’ve said a couple of times now, that cost-of-living help is changing over time, but our commitment to providing meaningful and responsible assistance is constant,” he said.