What Australians plan to do with their $300 energy bill subsidy

Most Australians say they will use the federal government’s $300 energy subsidy to increase savings or pay down loans, countering fears of a spending splurge that would fuel inflation after last week’s federal budget.

An exclusive survey shows only 21 per cent of voters plan to spend the electricity bill rebate, compared to 79 per cent who say they will save it or use it to pay off credit cards and other debts.

The budget’s energy relief policy is unlikely to be inflationary if people don’t expect to spend what they are offered in savings.Credit: Marija Ercegovac

But the findings highlight the political dispute over Labor’s ambition to bring down inflation in the hope the Reserve Bank will cut interest rates, with 52 per cent of voters saying interest rates are mainly about domestic factors rather than global forces beyond the government’s control.

Opposition Leader Peter Dutton stepped up his attack on the government over migration levels on Monday, saying he would make bigger cuts to net overseas migration than Labor’s forecast to reduce the intake from 528,000 last financial year to 260,000 next year.

With Dutton proposing a net intake of 160,000 instead, Prime Minister Anthony Albanese declared the opposition leader “has a vibe, not a policy” because the Coalition did not say how many skilled workers or other migrants it would turn away.

Albanese insisted the budget would not add to inflation, despite warnings from economists about the $24.4 billion in additional outlays over four years, because the government had chosen not to give money directly to taxpayers.

“It won’t be inflationary because it will take money off people’s bills,” he said on Adelaide radio station 5AA.

“So, we are seeing inflation moderating. We do need to get it down further. It’s not job done. But it is down to an annual figure of 3.6 per cent. That’s half of what we inherited just a couple of years ago.”

The survey found that 34 per cent of respondents considered the budget to be “good” for fighting inflation, while 27 per cent thought it “bad” for this goal and the remainder were neutral or undecided.

The findings in the Resolve Political Monitor, conducted for this masthead by research company Resolve Strategic, are based on questions to 1602 eligible voters from Wednesday to Saturday, producing results with a margin of error of 2.4 per cent.

Critics of the energy subsidy have questioned why it reduces bills for all households rather than being channelled to those on low incomes, prompting the government to argue it could only “means test” the assistance by flouting privacy rules and sharing personal tax information with retailers.

The Resolve survey found 45 per cent believed the help should go to all households and 47 per cent said it should go to those on lower incomes, with the rest unsure.

“People on the highest incomes are not our focus, they’re not our concern,” Treasurer Jim Chalmers said in an address to the National Press Club last Wednesday.

“But in the absence of redesigning or designing a new system of data sharing and means testing among the energy retailers, we made the assessment that the best way to do it was to provide it broadly.”

The latest Resolve findings show support for major budget measures, with 72 per cent in favour of the energy bill subsidy, 74 per cent in favour of the new spending on help for women who are fleeing domestic violence, and 62 per cent support for the “made in Australia” industry plan.

Asked how they rated the treasurer’s performance, 41 per cent said he was doing a good job and 29 per cent said he was doing a poor job, with the remainder undecided. That compares to 47 per cent who considered his performance good after the federal budget last May, and 43 per cent who said the same after the budget in October 2022.

Former treasurer Josh Frydenberg had stronger support after the Coalition budgets in recent years, with 53 per cent saying his performance was good in the days after the March 2022 budget, but this did not prevent the Coalition from losing power at the election weeks later.

While the government has pointed to global forces such as the wars in Ukraine and the Middle East as reasons for high prices, given the surge in oil prices and the consequences for business costs, only 24 per cent of voters agreed with the proposition that interest rate rises were mainly about international factors.

The survey found that 52 per cent of voters thought interest rate rises were mainly about domestic factors in Australia, up from 48 per cent last month.

Shadow treasurer Angus Taylor used the phrase “home-grown inflation” to attack the government over high prices in recent weeks.

In a sign of the pressure on households, 57 per cent of respondents said they would struggle to afford a major expense of a few thousand dollars for a new item such as a fridge or a car repair – up from 55 per cent last month and 49 per cent last December.

The question about the energy subsidy told respondents the subsidy would lead to a $75 reduction in quarterly energy bills over the year ahead, given the government’s decision not to offer the help as a direct cash payment to households.

The question said: “The energy subsidy of $300 next year means your household will receive a bill that is $75 lower than would otherwise have been the case each quarter. What would you most likely do with that saved money?”

People on low incomes were more likely to say they would spend the money, with 25 per cent choosing this option compared to 18 per cent among high-income respondents.

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