Loophole that will let you cash out $1000 energy rebate

Treasurer Cameron Dick has made a stunning admission surrounding the state government’s $1000 election sweetener, spruiked as helping Queenslanders with power bills.

• Qld reacts: ‘One calamity to the next’

Premier Steven Miles’ $1000 election sweetener, spruiked as helping Queenslanders with their power bills, could be cashed out and spent on anything in a $2.5bn billing loophole.

Households would simply need to switch electricity retailers in order to cash out any remaining credit on their account — including funds leftover from the cost-of-living rebate.

Mr Miles has spent days defending the government’s decision to give all households a $1000 lump sum energy rebate, regardless of income, in a move set to cost the budget $2.5bn.

However, Queensland Treasurer Cameron Dick acknowledged the loophole would allow people to get the cash if they changed energy retailers, but did not expect many to do so.

“I think Queenslanders know this money comes off their power bill and then they can use that however they like - leave it on their accounts or credit or use it in a different way instead of paying their power bill,” he said.

The rebate is set to kick in from July and with households paying an average of $315 a quarter according to finance comparison site Canstar Blue, most Queenslanders could be $685 in credit.

Energy retailers approached by The Courier-Mail confirmed customers could cash out their credit, even though it comes from the government’s rebates, if they are switching providers.

State government advice, provided to retailers and seen by the Courier-Mail, also reaffirmed normal retailer business processes apply if a customer shuts their account after the rebate is applied and they are in credit.

Premier Steven Miles and Deputy Premier Cameron Dick announcing the rebate scheme. Picture: Dan Peled / NCA NewsWire

According to the advice, any credit against a customer’s account should be settled as per the terms and conditions of the customer’s contract.

This means Queenslanders could get access to hundreds of dollars in hard cash without moving address.

The key difference is the way the state government has decided to pay out the rebate, opting this time to credit the $1000 as a lump sum rather than split it into quarterly payments.

Treasurer Cameron Dick, announcing the $1000 rebate, said the government chose to deliver it as a lump sum to ensure it could not be clawed back should Labor lose the election in October.

“By delivering this rebate to Queenslanders’ power bills as a lump sum we are ensuring it cannot be clawed back by any future Queensland government that might try to cover a loss of revenue or have an obsession with lower debt,” he said.

Retailers were split on whether customers could simply ask for a refund if they are in credit because of the rebate without switching providers, saying it was against the intention of the supplement while others believed it would be OK.

State government advice to retailers affirmed the rebate should be rolled over to future bills until June 30, 2025 and if customer remains in credit after that refunds are applied per a provider’s standard credit refund policy.

A spokesman for Mr Dick asserted the $1000 rebate would be deflationary regardless of the credit policies of individual retailers.

Independent economist Saul Eslake said the $2.5bn expenditure on the energy rebate was an extravagance Queensland could ill afford, labelling it a populist gimmick one would expect governments to be doing ahead of an election.

He said the loophole allowing households to cash out the rebate could worsen inflation in principle, but due to Queensland’s size against the national economy would in practice cause harm “in the margins”.

Originally published as Loophole that will let you cash out $1000 energy rebate