Soaring electricity prices are set to hit already stretched household budgets, but the government insists it’s doing what it can to support Australian families.
Retail power prices are expected to rise by 56 per cent over the next two years, while gas prices are also predicted to increase sharply, according to budget forecasts.
Treasurer Jim Chalmers said the rising prices were a large part of the inflationary pressures facing the nation, admitting he didn’t know when people could expect costs to start dropping.
“There’s no use pretending otherwise … we’ll have these challenges ahead of us for a little bit longer than we’d like, that’s why the cost of living relief is so important,” he told ABC TV.
But Dr Chalmers said climate and environment funding would indirectly bring power prices down.
The budget included $20 billion over 10 years for cheap finance for new electricity transmission links and a $1.9 billion fund to back jobs and emissions cuts in the regions.
“Renewable energy isn’t just cleaner energy, it’s cheaper energy as well,” Dr Chalmers said.
“There is more work to do when it comes to the electricity market, we do understand these electricity prices make it harder for Australians who are already under the pump.”
Prime Minister Anthony Albanese agreed renewable energy was a path to hip-pocket savings.
“Cheaper power bills will come as a result of investment in cheaper energy, that’s just a fact,” he told the ABC.
“And remember the former government actually changed the rules, they introduced a new system to avoid telling the Australian people the power price increases that were baked in … to keep from the Australian people that significant increase that occurred in the middle of this year.”
Dr Chalmers denied the government had broken an election promise to bring down household electricity bills by $275 per year, adding a $7.5 billion cost of living package would help ease short-term consumer pain.
“Cheaper child care, paid parental leave, cheaper medicine, more affordable housing and getting wages moving again, that’s a substantial cost of living plan,” he said.
“When you’re providing cost of living relief, if you do it in an excessive way or an indiscriminate way you risk pushing inflation up and interest rates up even further.”
Shadow treasurer Angus Taylor said Labor had broken a series of promises and didn’t have the structures in place to get prices down.
“You’ve got to get more gas supply into the domestic gas networks and you’ve got to get more dispatchable electricity generation in place,” he told Sky News.
“I don’t see anything from Labor that’s going to achieve any of those things, so the situation will get worse and Australians will pay the price.”
– AAP
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