Further power bill rebates in tonight’s federal budget brings the total amount of energy cost relief to $6.8bn under the Albanese government — which would have been enough to embark on the electrification of over 600,000 households, new analysis reveals.
The federal budget will include an additional $150 in rebates on electricity bills for households and small businesses, to be delivered in quarterly instalments from July 1 to the end of this year.
The commitment of the further $1.8bn worth of bill rebates has been criticised across the political spectrum as a “Band-Aid” that does not address underlying energy transition challenges, including by ACT Independent Senator David Pocock.
Funding Could Have Electrified 600 Suburbs
Pocock said that while energy bill relief was “welcome”, he added:
“We’re just putting Band-Aids on when we could be dealing with the root cause here.”
Independent parliamentary budget office costings found that the $6.8 billion invested in power bill rebates across Labor’s term of government could have subsidised comprehensive electrification measures in 600 suburbs across Australia, the Australian Financial Review reports.
Pocock, who commissioned the analysis, argued that “entire suburbs across this country should be fully electrified, getting them off gas. They’d be saving thousands of dollars every single year, not this 150 bucks.”
The analysis was based on Pocock’s own proposal to subsidise up to half the cost of rooftop solar, home batteries, reverse-cycle air conditioners, hot water heat pumps and EV chargers, with concessional loans for the remaining up-front costs.
The Senator was a driving force behind Federal Minister for Climate Change and Energy Chris Bowen directing the Australian Renewable Energy Agency (ARENA) to investigate funding more community electrification projects.
Separate calculations made by the Energy Efficiency Council indicate the $6.8 billion could have fully funded the purchase and installation costs of 2.9 million split system air conditioners, 1.6 million heat pump hot water systems or 2.4 million thermal efficiency upgrades.
“These one-off [bill rebates] aren’t sustainable over the long term. The government should be investing more in energy efficiency and electrification to drive down bills permanently,” said Energy Efficiency Council chief executive Luke Menzel.
On a related note, this year’s Mid-Year Economic and Fiscal Outlook earmarked an additional $2 billion investment for the Clean Energy Finance Corporation to support households and businesses to make the shift to renewables. The funding has been allocated to the CEFC General Portfolio, which among other things provides small-scale asset finance.
Coalition Doubles Down On Gas
As we reported yesterday, the Coalition has (somewhat grudgingly) supported the rebates, however Shadow Treasurer and Federal Member for Hume Angus Taylor was another to roll out the Band-Aid analogy, describing the proposal as “a band-aid on a bullet wound”.
The Coalition however so far has committed to pour public money into fossil fuels rather than electrification, vowing to fast-track Woodside’s North-West Shelf gas project and to offer subsidies to gas plants.
Calls For Rebate To Be Means Tested
Tasmanian Independent Senator Jacqui Lambie blasted the rebate in an interview on Nine’s Today, stating giving taxpayer money back to people to pay back out to electricity companies was a “ridiculous” situation.
Senator Lambie said:
“I really have a problem with this. And it’s not means tested. What do I need 150 bucks for? What a waste of money.”
When Treasurer Jim Chalmers was challenged last May on the initial rebates not being means-tested, he said:
“People on the highest incomes are not our focus, they’re not our concern. But in the absence of redesigning or designing a new system of data-sharing and means testing amongst the energy retailers, we made the assessment that the best way to do it was to provide it broadly.”
A Super-Important Budget
All Budgets are important, but Budget 2025-26 one especially so — not just for Australian households and businesses, but for the Albanese Government, given a Federal Election is soon to follow.
Election day can occur no later than May 17, 2025. There must be at least 33 days from when it is called to when it occurs, and in-person voting must be held on a Saturday. That only leaves three possible polling days left at this point – May 3, May 10, or May 17.
Regardless of the date we land on, the Budget should still be pretty fresh in voters’ minds. Among those voters are those living in over 4 million households equipped with solar systems. Some will be hoping for a national home battery rebate or loan program to be announced; although depending on the circumstances, waiting for rebates could cost them more.
The major parties are also under pressure from an electrification policy initiative from the Greens, who have pledged $8.1 billion to help homes and businesses install solar batteries and electrify their homes.
Both Labor and the Coalition are said to have related announcements to make on electrification, but at this point are still holding their cards close to their chest. Whether anything further will be revealed by Treasurer Chalmers tonight is anyone’s guess, but it may be announced post-Budget as a last-minute sweetener.
The Treasurer will deliver the 2025–26 Budget at approximately 7:30 pm (AEDT) this evening and we’ll be watching for any additional support announced related to home electrification. Subscribe to the SolarQuotes weekly newsletter for a wrap-up of any new developments.
Additional reporting by SolarQuotes Editor Max Opray.
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It doesn’t happen often, but here I agree with Senator Lambie. I’ve had solar power since about 2009 and even though I’m a pensioner with two (soon to be three) electric vehicles I don’t NEED to have any subsidy for my electricity bill. Because this “credit” is simply that – just a figure in a spreadsheet – I’m unable to withdraw it and spend it somewhere useful like another pensioner who NEEDS solar power.
The “means test” Sen Lambie proposed shouldn’t just be on income – existing rooftop solar should also be taken into account.
Bouquets to Senators Lambie and Pocock for their intelligent proposals.
And brickbats to the Opposition’s proposals about increasing use of gas.
Who’s your retailer? You should be able to have them pay out any solar credit you have, taxpayer rebate, subsidy, whatever or not.
As for the North-West Shelf gas project, basic economics is greater supply lower cost no? Prioritising domestic supplies before exports is of course a valid concern, as is ensuring easy transfer between states. Does Australia have anything comparable to the pipelines that carry oil across western Canada, through about a third of US states, and down to Texas?
Tried getting my “credit” paid out when I got the first tranche, but I’m only entitled to get whatever I’ve earned from exporting excess (solar) power, which isn’t much since (a) I’ve got batteries and (b) my FiT expired. The replacement system is pretty much a non-event. Govt credit is not redeemable. As I understand it it’s got nothing to do with the retailer, which is why I don’t want to receive it – the Government should spend it on people who NEED it.
Could have provided a lot of community type batteries to help soak up the excess solar during the day to be returned for peak times. That would be ongoing savings not just short term.
The $150 to each household is is clearly a sticking plaster or bribe (or both, depending on your veiwpoint)! Providing substantial discounts/ very low % loans targeted to the lower income housholds would be a much more equitable solution but won’t buy as many votes. The difference between short term pitical gain and long term sustsainable solutions “writ large”.
Pocock is a smart guy and this policy by Labor is the opposite. It’s like throwing money down the toilet.
The greedy markets and energy gentailers will suck it up and raise the prices more next time because now they know the government will cover it.
Yes, I am against power bill rebates. These largely end up subsidising fossil fuels. They effectively encourage people to be more careless with power usage and discourage people from adopting more efficient appliances and homes and transitioning to renewables. If the government insists on cost of living relief, why not just give all households the money and let them decide if they want to spend it on power bills or putting it towards insulation, solar, electrifying their home or anything else.
Rather than the government just handing the money out willy-nilly, I’d like to see a household have to actually APPLY to get the money. That way some of the money should stay with the government which as I see it would have two benefits. Since it would be necessary to actually do something to get the money, some people would say it’s too much hard work for too little return and not bother, and the government would be able to perhaps counteract charges of wasting taxpayers dollars, since it would be the taxpayers themselves who are making the choice, while still being able to show they were helping those in need.
As it stands now because I’ve got solar and batteries, this policy doesn’t help me one bit eg it doesn’t help counter increases in food prices, yet more deserving people are missing out.
Compared to the Liberal Party’s pledge to halve fuel excise for the next 12 months, Labor’s offer is pure petty change. Sure it’s of little use to those without personal vehicles, but it’s still something many will appreciate, though EV owners may protest – akin to those living off grid not gaining from Labor’s rebate. Contrast this with the response to Labor’s budget promise of an extra $5 per week for those earning $45K+. It seems most are oblivious the budget is out, and upon hearing what Labor’s offering, are completely tuned off.
If you look at the Liberal party’s proposal for nuclear power in the next whatever number of years, how is cheap (even free) power going to help somebody who is homeless? The money intended to be spent on nuclear power should go towards housing the homeless, not making life even easier for the well off.