Australians hoping for power bill relief will be waiting until mid-next year for the government’s energy plan to take effect.
Energy Minister Chris Bowen admits it won’t bring down prices from where they are now but says it will take the sting out of future rises.
Bowen has announced what he called ”decisive action, which makes a difference to Australian consumers”.
He promised a 12-month price cap on wholesale gas and coal, saying Australians would have been $230 worse off next year without it.
“We’re certainly not suggesting this is a magic bullet or we’ll see energy prices fall,” he admitted.
Energy Finance Analyst Tim Buckley said the move will help with bills, which will continue to rise.
“We were looking at another 30 per cent retail electricity price increase next year, so this will dramatically reduce that,” he said.
Innes Willox from Australian Industry Group was less enthusiastic.
“It is welcome – but it is not going to solve all the problems industry and households are going to face over the next year,” Willox said.
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Plus, the gas industry claims the plan will eventually lead to price increases.
Samantha McCulloch from the Australian Petroleum Production and Exploration Association said it will “do the opposite of what’s needed.”
“It will destroy investor confidence in bringing on new supply and that’s the key to bringing down prices,” McCulloch said.
Federal Parliament has been recalled for Thursday to pass the emergency measures into law before Christmas.
But the relief from price caps won’t flow to consumers for around six months.
Some Australians will get help earlier, with discounts on energy bills expected to begin in April for those on income support and other social security payments plus small businesses.
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State and federal governments are still deciding how much they’ll reduce bills by and who will be part of the scheme.
Those who do opt in will offer account credits over cash handouts to avoid further fuelling inflation, which Treasury claims will ease by half a percentage point as a result of the new power plan.
