Labor pledge to help families tackle rising power prices, inflation crisis

Energy relief for struggling families and businesses will be the “centrepiece” of Labor’s next budget, as the treasurer committed to standing up for Australians amid an inflation crisis.

Energy relief for struggling Australian families and businesses will be the “centrepiece” of Labor’s next budget as the federal government moves to “take the edge off” soaring bills amid an inflation crisis.

The federal government has signalled its targeted electricity bill subsidies — which will blunt but not entirely stop forecast prices hikes — would be the main big-ticket item in the May budget as it seeks to help Australians without making inflation worse.

Though the relief will stop power bills from rising the full 56 per cent over two years forecast last October, Labor is still a long way from delivering the $275 saving to every household promised by 2025.

States and territory finance ministers will meet with Treasurer Jim Chalmers on Friday to continue negotiations over how $1.5 billion for energy subsidies from the Commonwealth will be carved up, but the cash won’t flow to households for months.

Mr Chalmers has defended the government’s “three-point plan” to tackle Australia’s “unacceptably” high inflation rates, including cost-of-living supports, removing “obstacles” to economic growth like skill shortages and housing supply, and “responsible” budget spending.

Treasurer Jim Chalmers during Question Time. (Photo by Martin Ollman/Getty Images)

“The centrepiece of the May Budget will be direct energy bill relief for struggling families and businesses – taking some of the edge off high power prices,” Mr Chalmers said.

Labor’s second budget since winning the federal election is only three months away, and comes as the Reserve Bank of Australia has warned of multiple rate rises this year after lifting the cash rate by another 0.25 per cent this week.

Treasurer Jim Chalmers. (Photo by Martin Ollman/Getty Images)

Mr Chalmers said the rates decision “didn’t come as a surprise to anyone,” but that did not make it “sting any less”.

“There’s no getting around the reality that another interest rate rise puts more pressure on people already feeling the pinch,” he said.

“The Reserve Bank acts independently of the government – its job is to try and get on top of inflation without crunching the economy, and it does that without any interference from the Treasurer of the day,” he said.

“Our job is to do what we can to address the broader pressures facing our people and our economy.”

In addition to cost-of-living relief Mr Chalmers said the government was working to boost Australia’s skilled workforce and create high-paying jobs.

“We’re removing some of the obstacles that are holding back the growth of our economy and putting more pressure on inflation,” he said.

Mr Chalmers said the government’s proposed $15 billion National Reconstruction Fund — for which it is still trying to secure crossbench support in the Senate — would help create more skilled and high-wage jobs in the suburbs and regions.

In his meeting with states and territories Mr Chalmers will also discuss affordable housing and increasing women’s economic participation.