A new government plan aimed to ease household energy costs is not “magic bullet” that will trigger Australia’s prices to fall, according to a senior Minister.
Federal Energy Minister Chris Bowen made the comments on Saturday after Anthony Albanese announced national cabinet had devised a plan to cap wholesale gas and coal prices.
Mr Bowen said the price controls plan to and give $1.5bn to the states and territories to spend on power bill rebates would not fix the energy bill crisis.
“We are certainly not saying this is a magic bullet and we’ll see energy prices fall. What we are suggesting is that this takes the big impact of the increases out of the system,” he said,
“Especially when you add in the rebates, which the treasurer will be discussing with his colleagues in coming weeks, that sees real relief flow through to those who need it most.”
Mr Bowen said the government was acting in a bid to ease some of the price spikes that are expected next year.
“We are not suggesting this solves all the problems in the energy market forever,” he said.
“We were facing price rises next year of 36 per cent, that’s the latest figures, that’s not acceptable, either you intervene and you take the sting out of those price rises or you don’t.
Federal parliament will be recalled next week to deal with the necessary legislation to put the plan into place.
The Prime Minister again ruled out the prospect of “cash handouts” for Australians, saying Treasury had advised this would risk further fuelling inflation.
The treasurers in each jurisdiction will instead decide how to use their share of the $1.5bn to reduce energy bills for households and small businesses.
“The appropriate way to pay it is through state governments because that is how you take money off peoples’ bills rather than provide cash payments; that is important so that you have a deflationary impact rather than inflationary,” Mr Albanese said.
The proposal is expected to result in government rebates for power retailers to help them lower the bills they send out.
