Power Bill Relief Central in Australia Budget, Treasurer Says

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(Bloomberg) — Relief for rising power bills in Australia will feature prominently in the May budget, but the government will focus on trying to control inflation, Treasurer Jim Chalmers said.

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“We’re still finalizing the budget, we know that relief for electricity bills will be a big part of it,” he said in an interview with the Sydney Morning Herald newspaper. “We’ve got to make sure that in providing cost-of-living relief, we’re not adding to the inflation problem.”

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Australia’s status as one of the world’s biggest coal and natural gas exporters has failed to protect consumers from soaring global energy costs and inflation, causing the central bank to pivot to a more hawkish stance, on Tuesday raising interest rates to a 10-year high. The government in December announced wholesale price caps to try and ease the increases in electricity bills. 

“Our plan is designed to take some of the edge off these energy price rises, and we’re really encouraged to see that’s the case,” Chalmers said Sunday in a separate interview with ABC Television’s Insiders program. “Our energy plan is taking some of the edge off this inflation in our economy, and that’s a good thing.”

Chalmers also said that the Reserve Bank “shouldn’t be worried about a wage-price spiral,” after it signaled the risk on Friday.

“We’ve got inflation in our economy because of global conditions combined with weaknesses in our supply chains and weaknesses in our energy market,” he said. “It’s very, very important that we get wages growing strongly and sustainably.”