$1000 Queensland energy rebates ‘short-term Band-Aid’

Every Queensland household will be handed an unprecedented $1000 energy rebate ahead of the October state election as Premier Steven Miles ramps up spending to try and claw back electoral support.

Queensland Premier Steven Miles. Picture: Dan Peled / NCA NewsWire

Every Queensland household will be handed an unprecedented $1000 energy rebate months out from the October state election in a move some economists warn could fuel inflation.

Labor fast-tracked the $2.5bn energy rebate package in a bid to claw back electoral support on the back of disastrous polling and a parliamentary week dominated by the government’s response to surging crime rates. 

Mr Miles said the rebate would apply in the July quarter. Pensioners and concession card holders will receive $1372 off their bill.

“I said we would use the budget to deliver cost-of-living relief, but I’ve decided it’s too urgent to wait that long,” he said. “Many Queenslanders won’t pay an electricity bill again until 2025.”

Labor MPs gathered on Wednesday for a rare night-time caucus meeting to sign-off on the Appropriation Bill before it was due to be introduced to state parliament on Thursday.

The legislation came days after the release of higher-than-predicted inflation figures and warnings from economists that a big-spending Queensland budget could hamper Jim Chalmers’s efforts to beat back high inflation.

Former commonwealth Treasury economist and director of Adept Economics Gene Tunny said the state government could not afford $1000 rebates, with total debt expected to climb to $188bn by mid-2027.

“It’s complete madness … I don’t think any economist or any budget analyst could defend this,” he said. “This is going to all Queensland households, even to people who don’t need it and meanwhile you have people ­living in tents … I can’t see how it is a sensible use of money.”

Arguing that even high-income earners needed government rebates in a cost-of-living crisis, Treasurer Cameron Dick took aim at Mr Tunny and his criticism of ballooning debt. “Gene Tunny’s great obsession is with paying down debt, and whose other obsession is that? The LNP’s,” he said.

“People have mortgages, interest rates have gone up significantly and that’s put pressure on the hip pocket for Queenslanders across the board.”

Mr Dick said rebates would be funded through coal royalties.

“We’ve had a significant increase in (coal) price in the first part of this financial year,” he said.

Mr Tunny said the government had abandoned its pledge to lower debt.

“I’m commenting on this because I think it’s really bad policy, and I think, paying down debt is a fair goal for a state government.”

University of Queensland economics professor John Mangan said that rebates were “not a necessarily a bad thing”, but were a “short-term Band-Aid” fix.

“Some people desperately need it, but some people won’t need it and presumably spend most of their money on other things, so it does have potential to be marginally inflationary,” he said.

“Obviously, looking to an election, they want to do something that seems to be benefiting people and they are doing that, but those cost-of-living pressures are not going to go away unless there is structural change.”