Australia is in the middle of a cost-of-living crisis, with out-of-control energy price rises and inflation being made worse by reckless govt spending. Yet, mainstream Australian families have been ignored in this year’s Federal Budget. As reported in the Daily Telegraph, IPA analysis shows that average household energy bills will rise 39% by this time next year from March 2022 levels according to Australian Bureau of Statistics CPI data and Budget forecasts.
This is a staggering $780 increase on the average annual energy bill. There was no relief included in this year’s Budget for five million Australian working families that face crippling energy bills rises, as they do not qualify for any of the announced assistance. Worse still, even those families receiving the full energy subsidy will be left almost $300 worse off a year.
What the numbers mean for Australians
Australians looking to Canberra for economic leadership have been completely let down and left to suffer the disastrous economic consequences of energy policies such net zero, and the gas production price caps alone. For small business it gets worse, with average energy bills forecast to rise from $8,000 per year to at least $10,000 based on the govt’s own data.
Despite the $650 subsidy the Federal Government announced in the recent budget, small businesses will still be, on average, $1,350 worse off this time next year. Small businesses are the backbone of our economy, where jobs are created in local communities, however, inflation and rampant energy price rises will hit these job generators first and hardest.
The Budget’s forecast rise in energy bills follows new IPA research which shows that reckless levels of government spending will drive inflation higher, causing average household mortgage repayments to rise by $257 per month, or $3,088 per annum, for the next three years.
Fiscal discipline our last hope
Australian families and businesses are facing acute and immediate cost of living pressures, caused by rapidly rising inflation, energy costs, and mortgage repayment rates. This week’s Federal Budget saw spending increases, which a wide range of economic commentators are already warning will only exacerbate Australia’s inflation crisis, confirming the IPA’s research.
Governments at all levels must now exercise responsible economic leadership through fiscal discipline. Unfortunately, the Federal Government completely missed the opportunity this week to take the lead in tackling inflation and the cost-of-living crisis before it’s too late.
To download the IPA’s research click here.
Daniel Wild is the Deputy Executive Director at the Institute of Public Affairs.