National cabinet agrees on four-point plan to provide energy price relief
Australia’s leaders have agreed on an “extraordinary” energy price relief plan to help ease pressure on household budgets.
Anthony Albanese, premiers and territory leaders dialled in remotely for the national cabinet meeting today after the prime minister caught COVID-19 earlier in the week.
The main item on the agenda was the energy crisis as prices skyrocket due to the war in Ukraine and surging inflation.
“Extraordinary times call for extraordinary measures,” Albanese said.
“And we know with the Russian invasion of Ukraine, what we’ve seen is a massive increase in global energy prices.”
Reduction in energy bills for all Australians
National cabinet agreed on four components, with the most significant for consumers a nationally targeted power bill relief plan.
A $1.5 billion support package will be paid through state and territory governments to provide support to households and small businesses.
State and territory treasurers will work on their own packages to provide support to residents and the relief will come into effect next year.
“It will be temporary but will start in the second quarter of 2023,” Albanese said.
Albanese emphasised this will not be cash payments, which would have an upward impact on inflation, but rather reducing power bills.
The amount provided to states and territories will vary.
“In Western Australia, for example, because of the Carpenter government having the vision, frankly, to make sure there are domestic gas reservations, then impact on price in Western Australia as well as the Northern Territory, ACT and Tasmania is less than the states which are at the heart of the national energy market,” he said.
Capping gas prices and coal prices
Other measures that were agreed on include the Commonwealth enforcing a mandatory code of conduct to cap gas prices at $12 a gigajoule for a year.
The Australian Competition and Consumer Commission (ACCC) will monitor the enforcement.
The federal government will also work with New South Wales and Queensland to introduce a temporary coal price cap of $125 per tonne.
This is less than half the market rate but involves paying compensation of billions of dollars to major coal producers in the two states.
“New South Wales will be negotiating out a code but will also be legislating to ensure that this occurs,” Albanese said.
“Queensland will be using its directionary powers under the Government Owned Corporations Act.”
Both states collect billions in coal royalties every year and officials have been busy finalising a final compensation figure for the states.
‘Keep lights on”: Energy ministers agree on landmark deal
Leaders have also agreed on a plan to secure Australia’s energy future.
The landmark deal was agreed to by the nation’s energy ministers yesterday to bolster renewable energy to ensure there is enough supply in the national electricity grid.
It will involve bringing transmission networks up to date and increasing the capacity of the networks.
Energy Minister Chris Bowen said yesterday the deal aimed to “keep lights on”.
“This is about bringing energy transmission into the 21st century,” Albanese said today.
Reducing household power bills has become a political priority for the federal government after they skyrocketed this year.
Power bills have gone up 20 per cent on average in 2022 and they’re predicted to rise another 30 per cent next year.
That would add around $1300 over two years to an average home’s electricity and gas bills.