The Australian government has confirmed that it would not provide energy rebates for struggling Australians despite soaring electricity and gas prices.
Speaking at the National Press Club on Oct. 26, Treasurer Jim Chalmers said that cash handouts would exacerbate inflation in the long term.
His remarks came after the government released forecasts that retail power prices would jump by 56 percent in the next two years.
Treasurer Walkbacks His Statement on Power Bill CutsPrior to handing down the Budget, the treasurer had promised Australians should expect a $275 cut to their power bills as promised by the Labor party during the federal election.
However, the treasurer later backtracked his statement in the parliament, saying he had misheard the question.
"I do confess that when you have ears as big as mine, and you say that you misheard something, I know that people might doubt that, but it's the truth," he said.
Chalmers then said the federal budget couldn't afford short-term relief, which could push up inflation.
"People would've felt it through higher prices and higher interest rates."
However, Shadow Treasurer Angus Taylor said the Labor party had gone back on its election promise of lower power prices.
Government Hints at Potential Market InterventionDuring his speech at the event, the treasurer hinted that the government could implement regulatory measures to bring price pressures down, but he said finer details were still being discussed.
"It would require a lot of consultation with colleagues and other levels of government, and that's the reason why I'm not prepared to be more specific," he said.
"If there's more that can be done, more will be done. We don't want to limit our options."
Grattan Institute CEO Danielle Wood said the "sobering" power forecasts could prompt the federal government to intervene in the energy market.
"They could move to tighter regulation of prices. That would be a big move," she said while noting that rebates could be done in a way that would not fan inflation.
Meanwhile, the federal government is aiming to reduce power prices by investing more in renewable energy, with a record $20 billion in spending outlined in the budget papers.
Prime Minister Anthony Albanese said renewable energy was the solution to soaring prices.
"Cheaper power bills will come as a result of investment in cheaper energy. That's just a fact," he said.