Millions of households will secure up to $500 in energy relief in the budget to help cover the cost of soaring bills.
Treasurer Jim Chalmers has confirmed that cost of living relief will be the centrepiece of the budget, but it will be carefully constructed to ensure that it does not simply fuel inflation.
And while he won’t confirm specifics, it’s expected some struggling families could be eligible for up to $500, depending on where they live.
“People will be getting several hundred dollars if they are on pensions and (government) payments, or a small business,” the Treasurer said.
The bulk of the energy relief will be directed at aged pensioners and people on fixed incomes, including welfare.
The quantum of cash offered will differ from state to state and will be determined in part by how much electricity prices are and how much money the states are prepared to contribute to top up the Commonwealth contribution.
“So it’ll be different around the country, we’ve struck eight different deals with different jurisdictions,’’ he told Sky News.
Treasurer Jim Chalmers said it will take some of the sting out of these price rises. Picture: NCA NewsWire/Martin Ollman
“But we hope and we expect that it will take some of the sting out of these price rises, which are putting pressure on families, households and small businesses.”
When the Treasurer hands down the budget on Tuesday it will include $1.5 billion in energy relief for struggling families.
“More than 5.5 million households will get some assistance with their electricity bills, and around a million small businesses will be eligible as well, to take some of the edge off what are the key drivers of these cost of living pressures,” Dr Chalmers told ABC TV.
“People will be getting several hundred dollars if they’re on pensions and payments, or a small business, but depending on where you live, depending on what the price pressures are, depending on how much the states and territories are prepared to kick in, because this is a co-investment with them.”
Tax increases for oil and gas
On Sunday, the Albanese Government also confirmed a $2.4 billion increase in Petroleum Resource Rent Tax to be paid by oil and gas companies.
The changes to the PRRT will commence on July 1 and will raise over $2 billion over a four-year period.
Millions of Aussies will get a government handout. Picture: iStock
“Australians will get a fairer return on their resources sooner and what this change means is about $2.4 billion in the forward estimates which the gas companies wouldn’t be paying, the offshore LNG projects wouldn’t be paying, were it not for this change,” the Treasurer said.
“This means more tax sooner from these projects. And it means that it can help fund our cost of living package and other priorities in the budget.”
The Treasurer made a Freudian slip in one interview on Sunday as he launched a pre-budget media blitz referring to “the surplus” when the budget is currently in deficit.
There’s been widespread speculation the budget could be back in the black, but the surplus will be short-lived.
The Treasurer has conceded workers will have to wait another year before their wages outstrip the rising cost of living.
And the big driver of the budget turn around is employment, not commodity prices.
“That’s a common misconception about the improvement in the budget,” Mr Chalmers said.
“Commodities are an important part of the story but not the biggest part of the story — only about a fifth of the improvement is from higher commodity prices.
“Improvements in the labour market, lower unemployment and higher wages growth, that makes the biggest contribution — 40 per cent — [while] 20 per cent is commodity prices.”
The Treasurer has conceded workers will have to wait another year before wages outstrip the rising cost of living.
$20,000 tax relief for small business
Small and medium-size businesses that invest in equipment to cut their energy bills could be eligible for up to $20,000 in tax relief.
The Small Business Energy Incentive will assist 3.7 million businesses around Australia.
Under the scheme, businesses with a turnover of up to $50 million will be given a tax incentive to invest in converting their heating and cooling systems from gas to electricity.
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“This incentive is all about helping small business save energy and save on their energy bills; support that comes on top of the direct energy bill relief for small businesses that will be a centrepiece of the budget,” the Treasurer said.
“We want to see more incredible small business success stories like LSKD making the jump to the big league.”