Labor announces $150 energy bill rebate ahead of federal budget

The Albanese government has announced another $150 in energy bill relief before Tuesday’s budget, which is tipped to include more cost-of-living support for households.

From 1 July, every household and about 1 million small businesses will have another $150 in rebates “automatically applied to their electricity bills in quarterly instalments”, the government announced on Saturday night.

Treasury estimated this would reduce headline inflation by half a percentage point in 2025, and reduce household bills, on average, by 7.5% nationally, compared with bills without the extension.

The $300 energy rebate the government delivered to all households as the centrepiece of last year’s federal budget was due to end in July.

The announcement comes as thousands of Australians brace for higher energy prices after that, with authorities warning they would increase the maximum level energy companies can charge.

Caps on what regulators can charge households and businesses in New South Wales, South Australia, south-east Queensland and Victoria are refreshed every year. According to draft caps, residential electricity customers in NSW, South Australia and south-east Queensland will get price rises of between 2.5% and 8.9% compared with last financial year.

Extending the rebates until the end of 2025 will cost $1.8bn over the forward estimates.

The prime minister, Anthony Albanese, said helping household budgets was the “number one priority” of his government.

“This is another cost of living relief measure that my government is delivering for Australians while putting downward pressure on inflation,” he said.

“Peter Dutton opposed the $300 energy bill relief to households. His only plan for energy is a $600bn nuclear scheme that he will cut Medicare to pay for.”

The government also announced that the inquiry by the Australian Competition and Consumer Commission into the National Electricity Market would be extended for 12 months to “ensure households and small businesses are getting a fair deal from their energy retailer”.

The Coalition has repeatedly taken aim at the government over energy prices. But although the opposition leader this month criticised the energy minister, Chris Bowen, Dutton would not guarantee power prices would be lower if he won the election, and declined to say whether he would back a further rebate extension.

Days before the treasurer, Jim Chalmers, officially unveils the budget, Labor has also announced a plan to increase the income and price caps for its signature Help to Buy scheme.