Australian households and businesses will be saved from the worst of the energy crisis, the federal government has announced, after parliament agreed to impose a year-long price cap on coal and gas in a bid to keep households and businesses $230 better off than they would have otherwise been.
The measure, which was passed by a comfortable majority in the lower house, is part of an emergency package that includes an unprecedented market intervention.
Australians should be aware that they will not receive a direct $230 rebate off their power bills. Instead, the market intervention will cause coal and gas to become cheaper, resulting in an average savings of $230 on future power bills.
On Thursday, during a special sitting, the government’s emergency energy package was quickly approved by both houses of Parliament, with the backing of the Greens and Senators David Pocock and Jacqui Lambie. The bill imposes a one-year price cap of $12 per gigajoule on gas and $125 per tonne on coal.
The federal government will allocate $1.5bn to be matched by states and territories for a relief package. The discounts, which will be administered by state and territory governments from April, will be distributed in the form of reduced energy bills to help reduce inflationary pressures.
Rather than providing rebates to households, Albanese has said that states and territories will be responsible for administering the bill assistance package, which will be targeted at low-income households and those experiencing financial hardship.
“The energy crisis would be prolonged if a direct rebate were to be implemented, as it would lead to an increase in inflation,” PM Albanese said.
“Now is the time to take action in order to maintain employment for Australians, provide assistance for households, and also ensure our energy supply for the future.”
Labor claims that the conflict in Ukraine has created an international energy dynamic that was not foreseen.
Gas bills, initially predicted to rise by 20 percent in the current financial year and 20 percent the following year, are now anticipated to increase by 18 percent this year and only 4 percent the year after.
