Federal Budget 2025: Albanese govt promises ‘responsible’ cash splash in $150 power bill rebates

The Albanese government will spend $1.8bn on what it claims is a ‘responsible’ cash splash aimed at easing the cost of living, as Labor rushes to prepare an unexpected Federal Budget.

Households and small businesses will receive $150 off their energy bills in what the Albanese government claims is a “responsible” cash splash aimed at easing the cost of living, as Labor rushes to prepare an unexpected federal budget on Tuesday night.

While the rebate is less than what had been expected – and half that offered at the last budget – Labor will be hoping the $1.8 billion hip-pocket sweetener will be enough to woo back votes ahead of the upcoming election.

News Corp understands it will not be the only cost-of-living relief rolled out before the election, with speculation the government has also been costing household battery rebates.

The Albanese government has faced strong criticism over its failure to bring down power bills by $275, as it had promised after the 2022 federal election, despite a $300 rebate.

Under the latest measure, every household and around one million small businesses will see another $150 in rebates automatically applied to their electricity bills in quarterly instalments from July 1 until the end of this year – or $75 per quarter.

Prime Minister Anthony Albanese during a visit to the Rio Tinto Boyne Smelters in Gladstone this week. Picture: Paul Beutel

News Corp understands the government is mindful that the more modest relief – which effectively represents a six-month extension to the existing rebate scheme – will attract criticism for not being more generous.

However, Labor is hopeful it will still set it apart from the Coalition.

The government claims Treasury had estimated the bill relief would directly reduce headline inflation by around half of a percentage point in 2025.

The government claims its rebates – including the $300 off energy bills announced at the last budget – together with relief by the states have been reducing electricity prices.

According to the latest Bureau of Statistics data, electricity prices fell 25.2 per cent in 2024, with the government claiming they would have fallen just 1.6 per cent without energy rebates.

In a joint statement, Prime Minister Anthony Albanese, Treasurer Jim Chalmers and Climate Change and Energy Minister Chris Bowen declared its reforms were helping consumers to switch between energy plans to secure the best value for their money, remove excessive fees and charges, and ensure people get the concessions they are entitled to, “potentially saving them hundreds of dollars per year”.

 

“We are providing immediate relief on energy bills now while we continue to progress the overdue reform needed to deliver the modern, affordable and reliable energy grid Australians deserve,” the statement said.

“Our economic plan is all about finishing the fight against inflation, providing responsible cost-of-living relief, and building a stronger and more productive economy.

“Helping with the cost of living is the number one priority of the Albanese government and the budget, and that’s what our energy rebates will do.”

As well as a rebate extension to the end of this year, the government will also extend the Australian Competition & Consumer Commission Inquiry into the National Electricity Market for 12 months to help to ensure customers are getting a fair deal from their energy retailer.

Declaring cost-of-living pressures faced by families as his “number one priority,” Mr Albanese took aim at Peter Dutton for opposing Labor’s initial $300 energy bill relief.

“We are going to take a further $150 right off your power bill because helping your family budget is our number one priority,” 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.”

Further cost-of-living relief could come in the form of a household battery subsidy of up to 30 per cent, with the Albanese government understood to be costing the measure.

Energy stakeholders have long been lobbying the government to introduce concessions on batteries, which they argue would help improve grid stability while enabling households with solar panels to harness excess energy.

While senior Labor sources say the federal government has undertaken significant work on a residential battery incentive scheme – with one suggesting it could include a rebate of up to 30 per cent – the question is whether the government will restrict relief to lower income earners or to the broader population.

Treasurer Jim Chalmers will deliver the final budget of this term on Tuesday. Picture: Tertius Pickard

Empower founder and managing director Ezra Beeman said he would welcome the introduction of a national rebate, claiming batteries not only helped drive down power bills but enabled households to be more resilient to power outages.

The northern beaches business sells batteries for about $11,500 each, the product featuring “three times” the capacity than the cheaper variety on the market, Mr Beeman said. “Batteries will allow folks to be more independent of the energy system, and also more resilient to outages.”

The rebate comes amid further bill pain for some customers following a draft decision of Australian Energy Regulator (AER) earlier this month to recommend an increase to the Default Market Offer (DMO) in South Australia, NSW, and South-East Queensland.

The benchmark price will climb by up to 8.9 per cent for some households in NSW, 5.8 per cent in southeast Queensland, and 5.1 per cent in South Australia.

Originally published as Federal Budget 2025: Albanese govt promises ‘responsible’ cash splash in $150 power bill rebates