Anthony Albanese’s government is open to subsidising the price of electricity as Australians face soaring power costs due to an energy crisis.
The Labor Government is discussing measures to alleviate pressure on households as power prices skyrocket due to a gas shortage, outages at coal-fired power stations, and a cold snap.
Last week comparison site Finder warned electricity prices could double in July.
Anthony Albanese (centre) is considering subsidising electricity bills as Australians face soaring power costs due to an energy crisis
With the Europe also gripped by soaring costs after Russia’s invasion of Ukraine, the UK government has announced it will give all homes a one-off $690 (£400) power bill credit in October.
Asked if the Australian government would consider a similar measure, Employment Minister Tony Burke told ABC radio the government is open minded.
‘We’re not ruling anything in or out at the moment,’ he said.
Mr Burke said the cost-of-living relief in the Coalition’s final Budget in March, including a boosted tax return for those earning below $126,000, will help those struggling to pay 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.’
Last week comparison site Finder warned electricity prices could double in July
Mr Burke said the government’s submission to the Fair Work Commission that all minimum wage workers should get a pay-rise in line with the 5.1 per cent inflation rate was part of the government’s cost of living response.
He took a swipe at the Coalition for not prioritising renewable energy over the past nine years.
We’re not ruling anything in or out at the moment
Employment Minister Tony Burke on power bill subsidies
‘Some of the issues are international, but our capacity to be able to deal with those international issues is very much domestic,’ he said.
The new Labor government will hand down its first budget in October, with Treasurer Jim Chalmers already considering cost of living relief measures.
States and territories have varying levels of power bill subsidies in place already.
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.
It comes as mortgage payments are set to rise for homeowners, with the Reserve Bank due to raise 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.
States and territories have varying levels of power bill subsidies in place already
State and territory power bills subsidies
In Western Australia, millions of residents are expected to receive $400 credit towards their power bill.
Synergy and Horizon Power customers in WA will have the one-off credit added to their electricity accounts from July.
New South Wales
In New South Wales, households with dependent children are eligible to an $180 credit on an energy bill.
Those receiving the payment in New South Wales must have been the recipient of the Family Tax Benefit (FTB) for the previous financial year and have had your entitlement to the FTB payments finalised by Centrelink.
Check your eligibility and apply at the Service NSW website.
Eligible South Australians on low or fixed incomes can apply for help with the cost of energy bills for their principal place of residence.
They can receive up to $233.60 a year to cover energy payments, including fuels used to generate energy (eg LPG bottled gas and petrol). The concession is calculated as a flat rate per day and is indexed each financial year.
To apply for the payment visit the South Australia government website.
Queensland pensioners and seniors may be eligible for the Electricity Rebate – $340.85 per year and the Reticulated Natural Gas Rebate – $76.19 per year.
To apply for the rebate, contact your power and gas provider. You can apply over the phone or ask your retailer to send you an application form. You will need to provide certain details and have copies of your bills and concession card handy so you can verify your eligibility. Rebates are automatically deducted from your bill.
Meanwhile, Queensland households experiencing problems paying their electricity or reticulated natural gas bills as a result of an unforeseen emergency or a short-term financial crisis can receive $720 once every two years.
For more details on the emergency payment in Queensland, click here.
Every household in Victoria is set to receive a $250 cash handout to help with the rising cost of living, as Dan Andrews launches a $250million cash splash.
Payments will start from July 1, with Victorians simply having to sign up to the Energy Compare website to become eligible for the huge cash splash.
The scheme was initially rolled out to ease the financial burden of struggling families during Covid-19 but has since been extended.
Residents will need to head to Energy Compare and register their details through the website before they can receive the one-off payment. For more details, click here.
The scheme will open on July 1 and run until June 30 2023.
Members of the Northern Territory (NT) Concession Scheme can claim a concession on household electricity costs for their main place of residence. This excludes any household used for business or commercial purposes.
You can get up to $1,200 per annum for electricity (8000kW).
For more details on the payment, click here.
Australian Capital Territory
The ACT Government offers an annual combined rebate of up to $700 through the Utilities Concession Scheme for low income households.
From 1 July 2021 the annual concession amount will permanently increase to $750.
In the 2021-22 financial year an additional $50 rebate will also be provided to eligible households, resulting in a total concession of $800.
The concession covers electricity, natural gas, water, and sewage.
For more details, click here.
How millions of Australian families will be AT LEAST $670-a-MONTH worse off before Christmas – amid chilling admission by Labor’s new money man that country’s economic outlook is DIRE
By Stephen Johnson
A typical Australian family is set to be $670 a month worse off by Christmas as interest rates and grocery costs rise alongside a doubling of petrol taxes and electricity bills.
New Treasurer Jim Chalmers is warning of ‘skyrocketing inflation’ with the Reserve Bank of Australia widely expected to inflict five more interest rate increases before the end of 2022 in an attempt to put the brakes on price 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.’
New Treasurer Jim Chalmers is warning of ‘skyrocketing inflation’ with the Reserve Bank of Australia widely expected to inflict five more increases before the end of 2022
German discount Aldi estimates a typical family spends $192.19 a week or $9,994 a year on groceries
The incoming Labor government wants Australia’s lowest-paid workers to be given a 5.1 per cent pay rise in line with the consumer price index.
This would see 2.7 million minimum and award-wage employees receive the biggest pay increase since 2006 at the height of the mining boom.
How YOUR bills in December would compared with now
MORTGAGE: Borrower with a $600,000 mortgage would see their monthly repayments rise by $460 to $2,844 as interest rates rose five more times
PETROL: A doubling of fuel excise back to 44.2 cents a litre would see a bill to fill up a Toyota RAV4 rise by $48.60 a month
ELECTRICITY: A doubling of power bills meaning $118.67 more a month as a doubling of wholesale power costs are passed on to consumers
GROCERIES: A family shopping at Aldi would see their monthly grocery bill rise by $42.47 should inflation stay at 5.1 per cent
However adding extra labour costs to businesses still dented by the Covid lockdowns will inevitably see that impost passed on to end consumers, pushing the prices of goods and services even higher.
Home borrowers with an average $600,000 mortgage last month saw their mortgage repayments climb by $78 after the RBA raised the cash rate for the first time since November 2010.
This typical borrower would now owe their bank $2,384 a month, on a 2.54 per cent variable rate.
But should interest rates rise five more times by Christmas – which is widely tipped by economists – those repayments would rise by $460 to $2,844 as variable rates climbed to 3.94 per cent.
Westpac, Australia’s second biggest bank, is expecting the RBA to raise rates five more times this year, starting with a bigger 0.4 percentage point increase in June.
The bank’s chief economist Bill Evans is expecting 0.25 percentage point increases also in July, August, October and November.
Australia’s economy grew by 3.3 per cent in the year to March, with the official national accounts data showing a 0.8 per cent increase over three months.
‘From the Reserve Bank’s point of view, these accounts will reinforce the case for further interest rate rises,’ Mr Evans said.
Last month, the RBA raised the cash rate by 0.25 percentage points, from a record-low of 0.1 per cent, to 0.35 per cent with the big banks all passing on the increase in full
‘The Bank may see some encouraging evidence in the accounts around wages growth but will be more focused on the clear inflationary pressures now flowing through the economy.
‘Inflation pressures were evident in the price measures.’
Last month, the RBA raised the cash rate by 0.25 percentage points, from a record-low of 0.1 per cent, to 0.35 per cent with the big banks all passing on the increase in full.
What YOU could be paying by Christmas
$500,000: Monthly repayments rising by $383 from $1,987 to $2,370
$600,000: Monthly repayments rising by $460 from $2,384 to $2,844
$700,000: Monthly repayments rising by $537 from $2,781 to $3,318
$800,000: Monthly repayments rising by $614 from $3,178 to $3,792
$900,000: Monthly repayments rising by $691 from $3,575 to $4,266
$1,000,000: Monthly repayments rising by $767 from $3,973 to $4,740
Data based on variable rate rising from 2.54 per cent to 3.94 per cent as the Reserve Bank of Australia raised the cash rate from 0.35 per cent to 1.75 per cent
From September 29, fuel excises are doubling back to 44.2 cents a litre.
His Liberal predecessor Josh Frydenberg in the March 29 budget temporarily reduced fuel excise to 22.1 cents a litre.
With Australia’s gross government debt approaching $1 trillion, Mr Chalmers has ruled out extending that halving in fuel excise and will bump the tax back up to its previous level.
But since then, Sydney’s average unleaded petrol price has surged back to 203.1 cents a litre.
A family with a Toyota RAV4, Australia’s bestselling SUV, would now be paying $111.70 to fill up a 55-litre tank.
From September 29, fuel excises are doubling back to 44.2 cents a litre
But even if petrol prices didn’t rise any further, as Russia’s war with Ukraine keeps crude oil prices at elevated levels, a doubling of the fuel excise back to 44.2 cents a litre would see fuel bills rise by $12.15 to $123.85.
That’s based on pump prices rising to 225.2 cents a litre.
Over a month, that would add up to $48.60.
A doubling of wholesale electricity prices is set to be the biggest burden of all for consumers.
Financial comparison group Finder is predicting electricity prices to climb by up to 100 per cent from July 1, effectively doubling the price.
Canstar calculated an average annual electricity bill in New South Wales of $1,424.
A doubling would see that increase to $2,848, equating to monthly power bills increasing to $237.33 from $118.67 – a hefty rise of $118.67.
Finder energy expert Mariam Gabaji said power prices were set to double in July as Australia grappled with an energy crisis.
Electricity prices are also set to rise with the Australian Energy Market Operator noting wholesale prices had more than doubled to $87 in the March quarter – rising by 141 per cent in a year
‘Power prices have more than doubled in the past 12 months and smaller energy retailers are starting to crumble under the pressure, passing on the surging costs to customers,’ she said.
‘Households which are already stretched to the limit are now confronted with another utility price hike.
‘This at a time when the mercury is dropping around Australia, forcing Australians to go to extreme lengths to keep power charges down.’
It is not only bill prices that will rise, but consumers will end up paying more for all goods and services as businesses which themselves face soaring electricity charges respond by putting up their prices to maintain profitability.
This is occurring as power companies prepare to put up their prices from July 1, with Australian Energy Market Operator data showing a 141 per cent surge in wholesale prices to $87 in the year to March.
Wholesale prices make up about 30 per cent of an energy bill.
German discount Aldi estimates a typical family spends $192.19 a week or $9,994 a year on groceries.
In a month, that works out at $832.83.
Should inflation stay at 5.1 per cent, that would equate to a $42.47 increase taking groceries to $875.30.
In the year to March, fruit and vegetable prices rose by 6.7 per cent following floods along the east coast of Australia as meat and seafood prices went up by 6.2 per cent.
German discount Aldi estimates a typical family spends $192.19 a week or $9,994 a year on groceries. In a month, that works out at $832. Should inflation stay at 5.1 per cent, that would equate to a $42.47