26 September 2023

New national plan to cool energy prices

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Australian households are to be shielded from predicted energy price increases following an arrangement between the Federal Government and States and Territories.

Announcing the Energy Price Relief Plan, Prime Minister Anthony Albanese said that sustained and unprecedented pressure on global energy markets were currently being experienced, with Russia’s invasion of Ukraine pushing energy prices to historic highs all over the world.

Mr Albanese said the new Plan would limit gas and coal prices and provide targeted energy bill relief for households and businesses.

“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,” Mr Albanese said.

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

He said the Commonwealth would introduce a 12-month, $12-per-gigajoule emergency gas price cap – down on the average price he said was $41 a gigajoule so far this year.

Mr Albanese said a mandatory code of conduct for the wholesale gas market that included a reasonable pricing provision would also be introduced along with a boost to the Australian Competition and Consumer Commission’s (ACCC) resources.

The ACCC is to oversee the implementation, monitoring and enforcement of the code.

The Prime Minister said the New South Wales and Queensland Governments would set ceilings for the price of coal used for electricity generation to $125 a tonne, with the Commonwealth to contribute to the costs.

“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,” Mr Albanese said.

“The average family would be $230 worse off next year if we do not take action,” he said.

The Prime Minister said that combined, the Plan’s gas and coal measures were estimated to dampen predicted gas price increases by two percentage points in 2022-23 and 16 percentage points in 2023-24, and reduce expected inflation in 2023-24 by around half a percentage point

He said the measures were also expected to 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 the actions were not taken”.

“The Commonwealth Government is to 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,” he said.

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