One of Australia's leading charities is imploring state and federal governments to shield poor and disadvantaged households from spiralling power prices, saying "scattergun" policies risked making the cost-of-living crisis worse.
Federal Treasurer Jim Chalmers revealed in his first budget on Tuesday that the government expected electricity prices to skyrocket 56 per cent in the next two years as turmoil in the wholesale market flowed through to consumers.
In a sign of the government's concern about the upheaval, both Mr Chalmers and Prime Minister Anthony Albanese have suggested they may intervene in the market to keep a lid on prices.
St Vincent de Paul policy and research manager Gavin Dufty said the estimated price hikes would be alarming to millions of households already dealing with super-sized increases to their power bills this year.
Mr Dufty suggested it was inevitable that governments would need to provide more help to lower-income and vulnerable consumers as the full force of the price rises hit home.
But rather than calling on the Commonwealth to dole out extra subsidies across the board, he said it was imperative for the federal and state governments to "sing from the same song sheet" to ensure assistance was directed to those who most needed it.
"We'd be calling on all the energy ministers to work in lock-step and in harmony to get the best outcome for all consumers, rather than go for their own jurisdictional advantage," Mr Dufty said.
"That can impact other jurisdictions.
"And poor people are poor people no matter where they are."
'No good options' to tackle crisis
The comments came amid a flurry of calls for the government to do something about the rapidly escalating cost of electricity and gas in the eastern states.
Left-leaning think tank the Australia Institute pressed for a super profits tax on energy exports and tougher enforcement of a levy on offshore oil and gas producers, while the lobby representing major consumers said there should be a cap on gas prices.
Since last year, power prices have roughly trebled on average in the national electricity market, which services more than 10 million customers across the eastern seaboard.
At the same time, gas prices have spiked from about $10 a gigajoule, prompting the system operator to institute a cap of $40 a gigajoule at one point.
While Mr Chalmers pinned the blame for the increases on Vladimir Putin over Russia's invasion of Ukraine, energy expert Bruce Mountain said other factors were at play as well.
Professor Mountain, the director of the Victoria Energy Policy Centre, said Australia's exposure to international coal and gas markets was undoubtedly behind much of the jump in prices.
However, he noted the increasingly unreliable nature of Australia's fleet of coal-fired power plants was also having an effect.
"There can be no doubt, particularly in the south and eastern states, that sizeable price increases should be anticipated," Professor Mountain said.
"Coal and gas prices are very high, the market is fairly tight, and that trebling on the long-run averages in wholesale prices makes a very big difference to the retail price."
Between rock and hard place
According to Professor Mountain, the federal government had few options to tackle the soaring price of electricity and none was good.
He said the government could try to cap gas prices while demanding adequate supply, but he said both measures would be "difficult to achieve".
Another measure was levying a windfall tax on the profits coal and gas exporters were making and redistributing the funds to consumers, though he noted such a move would be politically fraught.
Finally, he said the Commonwealth could look to clamp down on the prices electricity retailers were allowed to charge.
Once again, though, he said price clamps could backfire by forcing some retailers to the wall, pushing prices higher still as competition fell away.
"It's a very unpleasant place to be in," he said.
"Each of these options will be difficult to implement.
"The easiest to implement will simply be a subsidy from the Commonwealth.
"But that's a subsidy from the taxpayer, which I think for those getting the subsidy will get the vote very quickly but when people see the impact on the budget they may well have a different view."
Equitable fixes needed: charity
In Britain, plans by the Conservative government to protect consumers from the turmoil in energy markets have come with a "staggeringly big" price tag of £60 billion, or $107 billion.
The Australian Petroleum Production and Exploration Association noted payments through the Petroleum Resource Rent Tax were forecast to increase by $200 million this year to $2.8 billion and amount to $11.4 billion over the forward estimates.
Chief executive Samantha McCulloch urged the government to boost gas supplies to put downward pressure on prices.
For Mr Dufty, the current "patchwork" of energy concessions and subsidies across each state was letting down too many vulnerable consumers who needed the help.
He said the predicted wave of further tariff increases meant there was a pressing need to better coordinate the assistance, boosting it where required and redirecting it in other cases.
Among the practical steps the Commonwealth could take, he said, was a big bump in payments through welfare programs such as JobSeeker and the pension.
Beyond that, Mr Dufty argued the government should aim to ensure the energy transition was as equitable as possible.
To that extent, he said giving poorer households access to rooftop solar was a good start, as was improving sites that allowed consumers to switch electricity retailer.
"Prices won't be coming down – they'll be going up.
"What we want to do is minimise how far they go up and who has the ability to best manage those price increases."
