Last week’s Federal Budget brought with it some interesting news: starting July 1, 2024, every Australian household will enjoy a $300 rebate on their energy bills, which we’ll automatically apply to reduce your costs. At Energy Locals, we’re thrilled to see Australians receiving a bit of financial breathing room after the heavy cost-of-living pressures we’ve all faced.
However, we question whether this rebate truly tackles the root causes of high energy prices. Most of the rises in Australia’s energy costs in the past few years stem from higher wholesale power costs. Power station operators, which includes the ‘big 3’ energy retailers, often cite global events, such as the Ukraine conflict, as reasons for rising prices. In reality, these events had minimal direct impact on local energy production, yet they hiked prices to match global rates, squeezing Australian consumers.
In response, the Government implemented price caps, which did have a a modestly positive impact but which taxpayers have paid for. Could policy-makers have done more? We think so.
The current rebate, although beneficial, involves redistributing $3.5 billion more taxpayer money. While we appreciate the extra cash in Aussies’ wallets, instead of temporary financial relief we advocate for fundamental changes on how wholesale energy prices are set to ensure ongoing fair pricing for everyone.
