Government Revamps Cost of Living Strategy: Energy Bill Rebates on the Chopping Block

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Treasurer Jim Chalmers has announced the federal government will not provide another round of energy bill rebates.

Speaking in Canberra ahead of the upcoming mid-year budget update on Monday, Chalmers said the rebate scheme would not be extended beyond the end of this year.

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

He argued that changes to the tax system, as well as to Medicare and the Pharmaceutical Benefits Scheme, would deliver more permanent relief.

“These tax cuts can help individuals manage their electricity expenses or alleviate other living costs,” he remarked. “While it was a challenging choice, it was ultimately the right one.”

“There is more than one way to provide this cost of living relief that people still need in their household budgets.”

All households and many small businesses received $300 in relief in the 2024 budget, paid quarterly. A $150 extension for the second half of 2025 was announced ahead of the election.

Chalmers has definitively dismissed the possibility of a fourth round, emphasizing that the government has always been transparent, stating that these measures were never intended as a permanent budget fixture.

Labor delivered tax cuts in July 2024, with further rate reductions scheduled from 1 July 2026 and 1 July 2027. In March, the government said the combined effect of these changes would see the average tax cut reach around $43 a week in 2026–27.

“Round two is approaching soon,” Chalmers noted.

In a report published in July by Energy Consumers Australia, it was revealed that 20% of Australian households are facing difficulties with their energy payments, with renters bearing a significant portion of this burden.

In a joint statement, Opposition Treasury spokesperson Ted O’Brien and finance spokesperson James Paterson said: “Labor’s decision to end household energy bill relief exposes the Albanese Government’s cost-of-living, energy policy and budget disasters for all to see.”

“The Albanese Government has already overseen the sharpest fall in living standards in the developed world, and all signs point to further cost-of-living pain in the year ahead.

“The Coalition understands we must address the root causes of Labor’s energy bill crisis.

“That’s why the Coalition is offering an alternative energy plan that prioritises affordable and reliable energy. Our emissions reduction goals will never come at the expense of Australian families, and this principle will guide every decision we take.”

The Coalition revealed its energy policy last month after both the Nationals and the Liberals dumped net zero by 2025 commitments from their platforms.

“We decided to invest in solar energy and took a bank loan for it,” he shared. “Now that the loan is paid off, our electricity bills have turned into credits.”

Many Australians are feeling the pinch as electricity prices drive up inflation.

Inflation data released last month showed electricity prices had jumped by 37 per cent in the past year, with the Australian Bureau of Statistics noting that the rise was primarily driven by state government rebates being used up by households.

In July, Energy Consumers Australia found in a report that one in five Australian households is struggling to pay its energy bills, with renters disproportionately affected.

David Stuart runs a paint business on Sydney’s northern beaches. Last month, he told SBS News he had been spending $24,000 a year on electricity before investing in renewables.

“We took the plunge. We went solar, we got a bank loan to do it,” he said. “That bank loan is now paid off. Our power bills are now negative.”

What to do about pricey energy bills

Sally Tindall, data insights director at financial comparison website Canstar, said millions of Australians are overpaying for utilities simply because they haven’t checked the competition in a while.

“Our research shows switching from an average-priced plan to one of the lowest in the market could save a typical household up to $406 a year in some areas, even more for larger households,” she told SBS News earlier this year.

Consumers can also speak with energy providers and ask what support is available to pay bills. Legally, retailers must declare if a better offer is available.

As Australians face a hot summer, there are several ways to keep cool while limiting energy costs — such as running the dishwasher and washing machine during off-peak periods, and using the oven only during cooler times of day.

The CSIRO recommends setting air conditioning temperatures between 24C and 25C, noting that for every degree you lower the temperature, costs can increase by 10 per cent.