Australia will not extend cost-of-living relief to households in the form of electricity rebates, Treasurer Jim Chalmers said, as the government looks to rein in spending in the face of large, structural budget deficits.
“This wasn’t an easy decision, but it’s the right decision,” Chalmers told reporters in Canberra on Monday. “This was a difficult call that we made as a Cabinet, but it’s the right call.”
Chalmers added that the decision “recognizes the pressures on the budget.” The government has spent almost A$7 billion ($4.5 billion) on three rounds of energy rebates so far, Chalmers told reporters.
The rebates covered virtually every household in Australia.
The government first announced the energy rebates in late 2022 as a temporary measure and later extended them through 2025. The plan has helped put some downward pressure on headline inflation.
The center-left Labor government will announce a midyear budget outlook next week with Chalmers saying there won’t be a mini-budget this time but “there will be savings and there will be difficult decisions.
“Chalmers said that Australian inflation is “higher than we would like” and the budget update would take that into consideration.
“We’ve got two sets of challenges here. At the front end, we’ve got this challenge with inflation, which is more persistent than anyone would like,” Chalmers said. “And in the medium term and the longer term, we’re trying to turn around two decades of underperformance on productivity.
“Chalmers’ decision comes a day before Australia’s central bank is expected to leave interest rates at 3.6% for a third straight meeting.
