The Government Has Failed To Rule Out Giving Cash Rebates As A Way To Ease Power Price Woes

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The government may resort to a cash splash as power bills continue to rise for Australian households.

The government does not promise hefty power bill reductions, but they are also not saying that cash rebates are impossible. The budget, delivered last week, suggests that electricity bills will rise 50% in the coming years. The government is considering interfering in the energy market. Rebates could come in handy as well.

Treasurer Jim Chalmers said,” You can go down the path of direct support to households. We don’t want to rule out those kinds of options.”

Victorians can receive a $250 payment for finding a better deal, while vulnerable residents in New South Wales can get up to $1,600 a year in assistance, and Queenslanders will be given a $175 rebate.

The federal government is more likely to enact a price cap on gas instead of giving cash handouts, as the latter would cause inflation. Presently, the annual inflation rate is 7.3 per cent and is projected to peak at 7.75 per cent during the December quarter.

Minister Chris Bowen said, “We will not stand by and watch this flow through to the Australian people without taking action.”

“We’ve agreed that we all have levers at our disposal, and we intend to use them carefully (and) methodically wherever it puts downward pressure on prices.

A maximum price limit on gasoline would restrict how much companies could charge for their product.

If the current forecast of a 40% rise in gas prices and a 56% increase in power bills holds, capping gas prices could lower those figures.

Bruce Mountain, the Director of the Victoria Energy Policy Centre at Victoria University, said Australians could expect to see their power bills double over the coming year.

The war in Ukraine is putting a lot of pressure on international supply, and Mountain said that having an end to the conflict, or at least a better understanding of where it’s going, would secure the market.

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