With electricity prices set to soar next year, the Albanese Government is partnering with States and Territories to shield Australian families and businesses from the worst impacts of predicted energy price spikes.

In a plan detailed today, the Government’s Energy Price Relief Plan will:

1. Take action to limit gas prices.
2. Take action to limit coal prices.
3. Provide targeted energy bill relief for households and businesses.
4. Invest in cleaner, cheaper, more reliable energy for the future.

In a statement released today, the Albanese Government said we are experiencing sustained and unprecedented pressure on global energy markets. Russia’s illegal invasion of Ukraine is pushing energy prices to historic highs all over the world.

In Australia, that’s made worse by nearly a decade of division, inaction and policy uncertainty on climate and energy under the Liberals and Nationals.

The urgent action we are taking with the Energy Price Relief Plan will shield Australians from the worst impacts of price increases, delivering responsible and targeted relief to families, small businesses and manufacturers.

The plan is responsible, targeted and temporary.

It is designed to provide all Australians with a buffer in unprecedented times.

This coordinated national approach continues the Albanese Government’s strong record of working constructively with States and Territories to address problems facing all Australians. It ensures that jurisdictions play their critical role in easing energy market pressures.

In today’s meeting of National Cabinet, the Prime Minister and First Ministers agreed to:

Temporary cap on the price of gas and other measures 

Tackling high gas prices by the Commonwealth introducing a 12-month emergency gas price cap, to be set at $12 per gigajoule on new wholesale gas sales by east coast producers subject to consultation; introducing a mandatory code of conduct for the wholesale gas market that includes a reasonable pricing provision, accelerating the introduction of the AGDSM; and boosting resources for the ACCC for implementation, monitoring and enforcement.

Temporary cap on the price of coal

The New South Wales and Queensland Governments are taking action by effectively setting ceilings for the price of coal used for electricity generation to $125 a tonne, with the Commonwealth to contribute to costs.

Impact of these actions 

The reality is that due to global circumstances and a decade of energy policy mismanagement, Australians will continue to still see high energy prices for some time. 

The average family would be $230 worse off next year if we do not take action with the Energy Price Relief Plan.

Combined, these gas and coal measures are estimated to:

• Dampen predicted gas price increases by two percentage points in 2022-23 and 16 percentage points in 2023-24.
• Reduce the impact of forecast electricity price increases of 36 per cent in 2023-24 by 13 percentage points, preventing a $230 increase that the average Australian household would have seen if these actions were not taken.
• Reduce expected inflation in 2023-24 by around an estimated half percentage point.

Targeted Energy Bill Assistance 

The Commonwealth Government will partner with States and Territories to deliver targeted and temporary relief on power bills to eligible Australian households and small businesses that are customers of electricity retailers.

The Commonwealth will establish an Energy Bill Relief Fund with up to $1.5 billion to deliver relief directly to electricity bills.

Commonwealth support will be contingent on the relevant State or Territory matching funding on a dollar-for-dollar basis.

This targeted and temporary support will provide hundreds of dollars of additional bill relief to eligible Australian families and small businesses and help shield them from the worst impacts of rising global energy prices.

National Cabinet agreed to finalise the design and delivery of the energy bill relief based on the following principles:

• Bill relief will be jointly funded between the Commonwealth and relevant State or Territory on a dollar-for-dollar basis.
• Contributions will constitute additional support above and beyond any existing or announced schemes.
• Bill relief will be targeted to households receiving income support, pensioners and Commonwealth Seniors Health Card holders, Family Tax Benefit A and B recipients and to small business customers of electricity retailers.
• Relief be provided as a credit directly on recipients’ power bills.

It is expected that the final details and funding arrangements will be settled by National Cabinet by March 2023. 

Investing for a renewable future

Beyond these immediate measures, the Prime Minister and First Ministers reinforced the commitment made by Energy Ministers at the meeting of 8 December, to implement the long overdue Capacity Investment Scheme.

This Scheme will unlock around $10 billion of private and public sector investment in clean, dispatchable storage and generation to ensure reliable and affordable electricity supply and reduce our exposure to high coal and gas prices over the medium and long term.

Over nine years of denial and delay under the previous government, Australia’s National Energy Market saw a decline of 3GW of dispatchable power, or enough to power over two million homes.

Firmed renewables are the cheapest form of energy. The current coal and gas price crisis makes that reality even more stark. Rewiring the Nation and the Capacity Investment Scheme will drive investment in Australia’s future as a renewable energy superpower.

Governments around the country are working together to provide relief to families, businesses, and manufacturers, along with longer term measures that increase capacity and reliability for renewable energy.

The Albanese Government will always stand up for Australian families, workers and businesses, and the Energy Price Relief Plan will do just that.

Prime Minister Albanese said, "Extraordinary times call for extraordinary measures. We are taking urgent action to shield Australian families and businesses from the worst of these energy price spikes.

“We are working hand-in-hand with our State and Territory partners to find the best outcomes for all Australians; keeping Australians in work, keeping industry going, and making sure that families and businesses can pay their bills.”