Treasurer Jim Chalmers has warned taxpayers of more tough decisions to help repair the budget and wean Australians off temporary financial sugar hits after the federal Government revealed it will not extend its $300 power bill subsidy. Source: The Age.
Ahead of a Reserve Bank board meeting today that is expected to raise concerns about a recent lift in inflation, Mr Chalmers said ending the subsidy, which would have cost another $2 billion to run for a further six months, marked a change in the Government’s approach to dealing with cost-of-living pressures.
Introduced in 2023, two versions of energy subsidies have cost the budget $7 billion while keeping inflation artificially low. At the time of their introduction, electricity prices nationally had climbed by 15 per cent over the previous 12 months.
The latest subsidy, which reduced electricity bills by $75 a quarter and went to all households and many small businesses, was extended for six months in this year’s budget.
But Mr Chalmers said it was now time to move away from direct cash support to help people deal with cost pressures.
“This marks a shift in the way that we are delivering cost-of-living relief,” he said.
“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.”
Mr Chalmers downplayed suggestions next week’s budget update would be a “mini-budget” but revealed more tough decisions were coming.
“I’ve already announced a difficult decision that we’ve taken today as a cabinet. There’ll be other difficult decisions in the mid-year budget update as well,” he said.
A substantial shift in fiscal policy and new productivity-enhancing policies, however, are likely to be in the May federal budget for 2026-27, which Mr Chalmers described as the “main game”.
Shadow treasurer Ted O’Brien said ending the power bill subsidy exposed the Government’s handling of the budget. “Labor can’t continue to provide energy bill relief because they have run out of money,” he said.
FULL STORY
Chalmers ends energy rebates as budget bites (By Michelle Griffin and Shane Wright, The Age)
