Albo to skip cash handouts

While cost-of-living support remains the government’s No.1 priority, Anthony Albanese says Australians should not expect cash handouts and sweeteners to relieve the pressure on households.

The Prime Minister said he had asked the Treasury and Department of Finance to devise ideas that could be announced in the May federal budget; however, cash splashes and spending would be curtailed to avoid inflation.

“We asked them to give consideration to what are the measures that can take pressure off families on cost of living without putting pressure on inflation. That’s the key issue,” he said.

“If you were just to distribute additional cash to people, you potentially make inflation worse and therefore don’t help to solve the problem.”

As an example, he used the government’s Energy Price Relief Plan, which was developed with state and territory governments to introduce price limits on gas and coal.

A 12-month emergency cap on gas prices has been set at $12 per gigajoule for east-coast producers.

“Instead of giving cheques to people, it reduces their bills substantially and we worked that through with Treasury and finance and it made a substantial difference in a reduction in wholesale prices,” Mr Albanese said.

In an effort to soften inflation to a target range between 2 to 3 per cent, the Reserve Bank of Australia (RBA) has implemented 13 rate rises since May 2022, with the 4.35 per cent cash rate denting household budgets. The latest consumer price index figures from September revealed year-on-year household inflation had reduced to 5.4 per cent after reaching a high of 7.8 per cent in December 2022.

Mr Albanese conceded Australians were still under the pressure caused by international events such as pandemic-related supply chain issues and the “illegal Russian invasion of Ukraine”.