Albo’s $500 rebate already eaten up by power price rises

Some Queenslanders will still feel less pain in their power bills then they could have, even though the $500 rebate promised in the federal budget will be eaten up before it’s even hit their bank accounts. Find out if you’ll qualify to receive it.

The $500 power bill rebate in the federal budget has already been eaten up by price rises since Labor came to power, as Queenslanders are set to be slugged another $350 on their power bills within weeks.

It puts federal Labor’s election promise to cut bills by $275 a year by 2025 even further out of reach, and adds even more pressure to Queensland households struggling with the cost of living – the majority of which do not qualify for the rebate.

The Australian Energy Regulator released its final decision on retail electricity prices on Thursday morning.

A Queenslander in the southeast on the default market offer, the maximum retail electricity fee, will be paying $1969 a year for their electricity from July 1 – up 21.5 per cent on the previous year.

It is a rise of $349 – almost $30 a year more than the AER forecast just two months ago.

Power prices are set to rise in southeast Queensland from July 1.

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Small businesses in southeast Queensland will be looking at an average price rise of $756, taking their annual bill to $4202.

Uncertainty in the markets, soaring coal and gas prices, lower reliability of coal generators and the closure of Liddell Power Station in NSW in April were among the reasons for the price rise.

In the May budget, the Albanese Government unveiled a $500 rebate for pensioners, people with a concession card or receiving family tax benefits A and B.

Just 1.1 million Queensland households will qualify for the rebate, which is co-funded by the state and federal governments.

But retail electricity prices have risen by about $514 since Labor came to power.

The default market offer in place from July 1, 2021 was $1455 for southeast Queensland, increasing to $1620 on July 1, 2022, shortly after it took office.

This increase was based on decisions of the AER made prior to the May election, when the Coalition still held power.

The budget already forecast further price rises next year.

State Treasurer Cameron Dick confirmed that the upcoming state budget would include more energy discounts for Queensland households, on top of the $500 rebate from the Commonwealth, but declined to give further details.

“We will of course do more for Queenslanders in our budget, it won’t be too long to wait,” he said.

Premier Annastacia Palaszczuk has previously revealed the size of the state’s power rebate would be dictated by the federal government’s plan, but would certainly be larger than $175.

Federal Treasurer Jim Chalmers said southeast Queensland electricity bills would have increased by a further $316 if the federal government had not implemented a coal and gas price cap in December.

“This data confirms our intervention in the market along with our rebates for families and small businesses are doing exactly what we intended – taking the sting out of price rises,” he said.

Treasurer Jim Chalmers

“It’s clear that our energy intervention has been successful in easing power price rises.”

Ted O’Brien said Labor had “broken its promise” to reduce power prices by $275 by 2025.

“Middle of Australia have been left out of the federal budget and they are going to be copping it the hardest as prices increase,” he said.

AER chair Clare Savage said the regulator’s decision was “carefully balanced” and considered cost-of-living pressures, as well as the need for retailers to be able to recover reasonable costs.

“We know households and small businesses continue to face cost-of-living pressures on many fronts, and that’s why it’s important the DMO provides a safety net for those who might not have shopped around for a better power deal,” Ms Savage said.

“In setting the DMO price this year we have sought to protect consumers from unjustifiably high prices and at the same time allow retailers to offer consumers better deals than their standard plans.”

The final decision on regional prices will be released on June 9.

The draft decision forecast prices rising to $1928 a year from $1496, a 28 per cent increase.

While Queenslanders were expected to receive the lowest percentage increase of any state when the AER released its draft decision in March, its final decision has pushed it up to on par or slightly higher than other states.

Budget papers warned that the energy prices in 2024-25 were “highly uncertain” and that the unwinding of rebates would increase retail prices.

It was assumed prices would go up with inflation, which is forecast to be 2.75 per cent in 2024-25.

Originally published as Albo’s $500 rebate already eaten up by power price rises