Fears budget won’t do enough to ease power price spike

The Albanese government is under pressure to focus on social wellbeing in the upcoming budget as Australians are being warned to brace for energy bill spikes over winter. 

UnitingCare says one in four Australians are struggling to get by, with successive interest rate rises and gas price hikes hurting hip pockets. 

National director Claerwen Little says people are having to choose between groceries, rent, heating or medicine. 

“The wellbeing of millions of Australians is at stake and we cannot afford to wait any longer to address the spiralling cost of living,” she said.

The Australian Energy Market Operator has warned of risks to gas supply in eastern states unless more production is set aside for domestic use.

While its most recent report said customer demand would be met in central and eastern Australia, supply risks remained in Victoria and elsewhere.

Prime Minister Anthony Albanese has denied the government raised false hope of falling energy bills, acknowledging there was pressure on households.

But he said the government had offered a buffer from the worst of the shocks after striking a deal with state and territory governments to cap the price of coal and gas.

Further relief measures will also be rolled out to lower energy bills.

“What we have done is intervene, we haven’t sat back and done nothing about it,” Mr Albanese told ABC Radio on Friday.

“We’ve seen wholesale prices essentially be half of what they would have been and what was predicted at the time of the October budget. 

“That intervention has been successful but we recognise people (are) doing it tough and that it is having an impact.”

Opposition energy spokesman Ted O’Brien said it had been a “shocker” of a week for Labor, with the energy market regulator and operator signalling skyrocketing prices and shortages.

“The government has totally lost control of the energy market and expects Australian households and businesses to pick up the bill,” he said.

Australian Energy Market Operator chief executive Daniel Westerman said the supply situation was set to worsen.

“The supply is declining at a faster rate than demand. Those shortfalls from 2027 onwards will continue to widen as we go into the future,” he said.

“That is why we are calling for investment in new sources of supply to overcome those annual shortfalls from 2027 onwards.”

News of the potential shortfall coincides with the energy regulator putting forward a more than 25 per cent rise in power prices for the next financial year.

A decision on the increase, forecast to be as much as $1738 a year, is set to be made in May.

The government is also being encouraged to offer more renewable energy to incentivise investment.