Electricity rebate to be scrapped at the end of the year
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The news: Treasurer Jim Chalmers has revealed Labor will allow the electricity rebate to expire as part of what he says are “difficult decisions” necessary in the mid-year budget update.
The context: Chalmers will deliver the Mid-Year Economic and Fiscal Outlook (MYEFO) in coming weeks, against a backdrop of stubborn inflation and concerns over government spending.
But amid speculation over the electricity rebate during rising energy prices, Chalmers revealed that the cabinet had decided not to extend it for a fourth time on Monday. That means the current $150 extension will expire on 31 December.
“This was a difficult call that we made as a cabinet, but it's the right call,” Chalmers told reporters.
“It recognises the pressures on the budget, [and] recognises that there is more than one way to provide this cost of living relief.”
The Albanese government has long insisted the rebate was a temporary feature of the budget, but high energy costs have added political pressure to keep it in place.
Chalmers insisted the politics were not a factor in the decision, saying: “We try to make the right decisions by people and by the economy, and others can judge the politics of that”.
But more permanent cost of living relief — boosts to Medicare and taxes cuts — were now baked into the budget, Chalmers said.
“Over time, we put downward pressure on energy prices by introducing more cleaner and cheaper energy. That's our policy,” he said.
“We've been providing these electricity bill rebates in the interim as well, and now we'll be providing cost of living help in other ways.”
The treasurer accepted the current inflation forecasts already assumed that the rebate would finish at the end of the year.
Chalmers insisted MYEFO would not be a mini budget, but would include savings and updated forecasts.
What they said: “There have been three rounds of electricity bill rebates, and there won't be a fourth,” Chalmers told reporters.
“There will be difficult decisions in the mid-year budget update.”
The source: Jim Chalmers press conference
