The $275 promise and the power bill

Bev and Ray Callahan stopped opening their power bill straight away somewhere around 2023. They are pensioners in Adelaide's northern suburbs, living on a fixed fortnightly payment that does not move when a quarterly electricity account does. In May 2022, the message from the campaign trail was specific and easy to remember: a Labor government would cut power bills by $275 a year, for the average household, by 2025. It was the kind of promise that invites a simple test. Three years later, the Callahans can run that test on their own kitchen table. Their bill did not fall. It rose sharply in 2023, rose again in 2024, and only a rebate credited automatically onto the account — a line paid for by taxpayers, not a lower price for electricity itself — kept the total from climbing further still.

The Callahans are not an edge case. Every household that pays an electricity bill in the states covered by the Australian Energy Regulator's benchmark price can run the same comparison, because the promise was unusually specific for a piece of political rhetoric. Most cost-of-living pledges are vague — "easing the pressure," "help is on the way." This one had a number and a date attached, drawn from modelling commissioned by the party itself. That specificity is what makes it worth auditing carefully, in both directions: against the shock that hit global energy markets almost as soon as the ink dried, and against a government that kept citing the figure long after the path to it had become far harder to see.

What Labor promised, and the modelling behind it

In December 2021, five months before the federal election, the Australian Labor Party released its climate and energy policy, Powering Australia. Alongside the policy document sat modelling commissioned from the energy analytics firm RepuTex, projecting how the plan's mix of higher renewable energy investment, an expanded transmission grid and a modelled outcome of roughly 82% renewable generation in the National Electricity Market by 2030 (approx.; not a legislated target) would affect retail power prices. The headline finding, repeated by Anthony Albanese and then shadow climate and energy minister Chris Bowen throughout the 2022 campaign, was that the average household's power bill would be $275 a year lower by 2025 than it would otherwise have been (ALP, Powering Australia, Dec-2021; RepuTex modelling).

That last clause — "than it would otherwise have been" — carries most of the argument this article makes later, so it is worth stating plainly now. The $275 figure was not, in the modelling itself, a promise that bills would be $275 lower in 2025 than they were in 2021. It was a projected gap between two future paths: a Powering Australia trajectory and a business-as-usual trajectory in which the policy was not implemented. Both paths, in the underlying modelling, could still involve rising prices; the claim was that Labor's path would rise by less. In the way the promise was delivered to voters, however, that distinction mostly disappeared. It was heard, and widely reported, as a plain and simple undertaking: power bills would come down by 2025, by $275. That gap between the technical modelling and the political message is itself part of the story of what went wrong.

The centrepiece of the policy was the $20 billion Rewiring the Nation fund, aimed at expanding and modernising the transmission grid to connect new wind and solar generation and to allow ageing coal generators to retire without triggering reliability problems. The logic was straightforward: new-build renewable generation was, on a levelised-cost basis, cheaper than new-build coal or gas, so a grid that could absorb more of it should, over time, pull average wholesale prices down. Labor was elected on 21 May 2022 and formed government two days later. What the timeline does not always make clear is how close the RepuTex modelling sat to a global shock that would test its assumptions almost immediately: Russia's invasion of Ukraine began on 24 February 2022, roughly ten weeks after Powering Australia was released and about twelve weeks before the election that turned it into government policy.

By late 2022, as bills began rising instead of falling, the $275 figure had already become political shorthand — invoked by opposition politicians and commentators as a simple, checkable test of the government's broader economic credibility, precisely because it was one of the few 2022 campaign commitments expressed as a specific dollar figure with a specific deadline. That specificity is unusual in Australian politics, where most cost-of-living commitments are deliberately vague. It is also why this topic sits differently to most of the other pledges examined on this site: there is little argument about what was promised, only about what happened next and who is responsible for the gap.

The government did not abandon the figure once bills started moving the wrong way. Through 2022 and into 2023, ministers continued to describe the $275 target as achievable by 2025, pointing to the multi-year phase-in of the transmission and generation investment behind the modelling. That consistency cuts both ways for the assessment that follows: it shows a government standing by its own analysis rather than quietly dropping an inconvenient number, but it also means the promise was never formally re-scoped or re-based against the new price environment created by the invasion of Ukraine — so the original $275, unchanged, remained the public yardstick against which the government's performance would eventually be measured.

The evidence: the wholesale shock, retail prices and rebates

None of this is a matter of opinion. The scale of the shock, the size of the retail price increases that followed, and the size of the rebates paid to offset them are all recorded in the primary data — Australian Energy Market Operator (AEMO) market reporting, Australian Energy Regulator (AER) price determinations, Commonwealth and state budget papers, and the Australian Bureau of Statistics' Consumer Price Index. Read together, they show a government that inherited a genuine emergency, responded to it with real money, and still ended the period further from its own promise than when it started.

The wholesale shock: gas, coal and the war in Ukraine

Wholesale electricity prices in the National Electricity Market — the price generators are paid, before network and retail costs are added — roughly tripled to quadrupled across most mainland regions in the first half of 2022 compared with the same period in 2021 (approx.; AEMO, Quarterly Energy Dynamics, Q2-2022). The shock was severe enough that on 15 June 2022, AEMO suspended trading across the National Electricity Market for the first time in the market's history, after a combination of generator outages, a cold snap lifting demand, and extreme prices triggering the market's price-cap safety mechanisms made it impossible to run a normal market. Coal-fired generators, which still supplied the majority of electricity in the eastern states, were themselves exposed to rising international coal prices and a run of unplanned outages, compounding the gas-driven shock rather than insulating the market from it.

Retail prices: what the Default Market Offer shows

The AER's Default Market Offer (DMO) is the clearest single measure of what households actually pay, because it sets a regulated reference price for standing offers in New South Wales, South Australia and south-east Queensland, and the AER publishes a full determination every year with the reasoning and the price movements by region. The 2022-23 determination, finalised in May 2022 before the worst of the wholesale spike had fully flowed through, allowed for comparatively modest increases in most regions (approx., low-to-mid single digits up to around the mid-teens per cent depending on region; AER, DMO Final Determination 2022-23, May-2022). The 2023-24 determination, finalised in May 2023, is where the shock actually landed on bills: default offer prices rose by roughly 20 to 25 per cent across most of the regions the DMO covers (approx.; AER, DMO Final Determination 2023-24, May-2023) — the single largest one-year jump in the benchmark's history. The following two determinations show the trajectory beginning to ease: the 2024-25 determination allowed increases of roughly one to nine per cent depending on region (approx.; AER, DMO Final Determination 2024-25, May-2024), and the 2025-26 determination — the last one due before the government's own 2025 deadline — showed further modest movement, with prices in every region still sitting well above where they started in 2021 (approx.; AER, DMO Final Determination 2025-26, May-2025).

Rebates: the taxpayer absorbs part of the gap

The gap between the wholesale shock and the retail price rise was not left entirely to households. In December 2022, National Cabinet agreed to an Energy Price Relief Plan: a temporary cap on the price of uncontracted gas (around $12 a gigajoule, approx.) and Queensland and New South Wales thermal coal sold into the domestic market (around $125 a tonne, approx.), combined with a Commonwealth Energy Bill Relief Fund of $1.5 billion, matched by state and territory contributions to bring the combined package to around $3 billion (approx.; Treasury Laws Amendment (Energy Price Relief Plan) Act 2022; MYEFO 2022-23, Dec-2022). From July 2023, eligible households — mostly pensioners, concession-card holders and small businesses — received rebates of up to $500 credited directly to their power bills, varying by state (approx.; Budget Paper No. 2, 2023-24, May-2023). The 2024-25 Budget widened the net considerably: every household in the country, regardless of income, received a $300 rebate paid in quarterly instalments from July 2024, alongside a $325 rebate for around one million eligible small businesses (approx.; Budget Paper No. 2, 2024-25, May-2024). A further round of rebates, worth around $150 per household in two instalments, was funded to run through to the end of 2025 (approx.; Budget Paper No. 2, 2025-26, Mar-2025).

The government did not create the gas shock. But it did promise, in writing and in dollars, to be immune from one.

Small business and the wider economy

Households were not the only ones exposed. Small businesses — cafés, manufacturers, bakeries running energy-intensive equipment for long hours — generally pay commercial tariffs that moved with the same wholesale shock, and do not benefit from the residential Default Market Offer's consumer protections. The Commonwealth's rebate rounds included a business component from 2023 onward (up to several hundred dollars for the smallest eligible businesses in the first round, approx., and a $325 payment to around one million small businesses, approx., from the 2024-25 Budget), but eligibility and take-up were narrower than for households, and larger energy-intensive manufacturers received no equivalent bill relief. Rising energy input costs for these businesses feed into the price of the goods and services they sell, which is one reason the food and grocery price pressures examined elsewhere on this site cannot be fully separated from the electricity story: a bakery's power bill is an input cost long before it becomes a line item on someone else's grocery receipt.

What the CPI numbers actually show

The Australian Bureau of Statistics' Consumer Price Index tracks electricity as its own sub-group, and the series shows the shock and the response with unusual clarity because rebates and market prices move through it differently. Electricity prices in the CPI basket rose sharply through 2022 and into 2023 — by more than 20 per cent over the two years to mid-2023 in year-on-year terms at their peak (approx.; ABS, Consumer Price Index, Electricity sub-group, Jun-2023). Once the rebates began landing on bills from the September quarter of 2023, the ABS treats a rebate credited to a bill as a fall in the price the household actually pays, so the headline electricity CPI reading swung sharply the other way — turning negative in year-on-year terms in some quarters even though the underlying, un-rebated market price of electricity had not fallen at all (approx.; ABS, Consumer Price Index, Electricity sub-group, various quarters 2023-2024). That swing is real, in the sense that households genuinely paid less than they would have without the rebate. But it is also, in a narrower sense, an accounting effect: a subsidy showing up in a price index is not the same thing as the underlying price of electricity coming down, and once a rebate round ends or is not renewed, the CPI effect reverses and the underlying market price — still well above 2021 levels — reasserts itself in the number households actually see.

This measurement quirk mattered well beyond household budgeting. The Reserve Bank and Treasury both noted, in their public commentary through 2023 and 2024, that energy rebates were temporarily flattering the headline inflation numbers used to judge whether the broader cost-of-living shock was easing (approx.; RBA, Statement on Monetary Policy, various editions 2023-2024; Treasury commentary accompanying Budget Paper No. 1). A falling headline CPI print that owes part of its improvement to a subsidy, rather than to underlying price pressure genuinely easing, complicates the task of anyone — the Reserve Bank setting interest rates, or a household deciding whether the worst of the cost-of-living squeeze has passed — trying to read the true state of prices from the published numbers. The $275 promise and the broader inflation fight turn out to share the same statistical blind spot.

How Australia's shock compared with other countries, and across states

The promise was pitched as a national figure, but the regulatory yardstick used to check it is not uniform across the country. The AER's Default Market Offer applies only in New South Wales, South Australia and south-east Queensland; Victoria runs its own, separately regulated Victorian Default Offer, which followed a broadly similar path of a large increase in 2023 followed by smaller movements after (approx.; Essential Services Commission, Victorian Default Offer determinations, 2023-2025); and Western Australia, Tasmania and the Northern Territory sit outside the National Electricity Market altogether, with government-set or government-owned retail tariffs that moved on different timetables again. Judging "the average household" against a single national number always involves some simplification, and the true picture is a family of state-based price paths that moved together in direction, if not in exact size.

Placed next to other advanced economies, Australia's shock was real but not the worst in the developed world. European wholesale gas and electricity prices, far more directly exposed to the loss of Russian pipeline gas, rose by considerably more than Australia's through 2022, and retail price caps in markets such as the United Kingdom rose sharply enough to trigger emergency government subsidy schemes on a scale larger, relative to the size of the economy, than Australia's energy bill relief (approx.; comparative reporting from national energy regulators and the International Energy Agency, 2022-2023). That comparison supports part of the government's steel-man case — this was a genuinely global event — without changing the domestic scorecard against a promise that was made in Australian dollars, to Australian households, against an Australian deadline.

The critique: a promise measured in dollars, kept in rebates

Start with where the number came from. The $275 figure was not produced or verified by an independent statutory body such as the AER, the Australian Energy Market Commission or the Parliamentary Budget Office. It came from modelling commissioned by the ALP itself from a private energy analytics firm, released as part of the party's own policy launch. That does not make the modelling dishonest — RepuTex is a working energy-market analytics firm whose modelling is also used commercially by industry — but it does mean the number carried less independent scrutiny before the election than a projection published by a regulator or the PBO's Post-Election Costing process would have. A single-point, multi-year price forecast, commissioned by the party proposing the policy, built on assumptions about future gas and coal prices that were reasonable in December 2021 and were overtaken within three months, is a fragile foundation for a promise repeated as confidently as this one was.

Three things can be true at once, and the fairness this masthead insists on requires holding all three in view. The government inherited a genuine, externally-driven shock to gas and coal prices that no December 2021 modelling exercise could have foreseen. It responded to that shock with real budget resources — price caps and multiple rounds of rebates that ran into the billions of dollars. And it still, by its own chosen measure and its own chosen deadline, did not deliver the outcome it promised. By the middle of 2025, when the promise came due, retail electricity prices in every region covered by the AER's Default Market Offer sat well above their 2021 starting point, not $275 below it (approx.; AER, DMO Final Determination 2025-26, May-2025). The rebates reduced the size of the shortfall a household actually felt on their bill. They did not close it, and they were never designed to close it permanently, because a rebate is a budget line that has to be renewed, not a change to the underlying price of power.

The technical defence of the $275 figure — that it was always a comparison against a hypothetical no-policy baseline, not a promise that bills would fall in absolute terms — is accurate to the modelling. It is not, however, how the promise was delivered to voters. Throughout the 2022 campaign, the figure was used as a plain, unqualified undertaking that power bills would come down by 2025. Neither Anthony Albanese nor Chris Bowen, in the many times the number was repeated on the campaign trail, routinely attached the baseline caveat when speaking to voters. A promise stated in a dollar figure and a deadline invites exactly the plain-English test this masthead has just run: has the average household's power bill fallen by around $275 since 2022? By the government's own regulator's numbers, it has not. That the modelling behind the number always had an escape clause does not change how the number functioned in the campaign that won the government office.

There is also a harder point about what the rebates represent. Every dollar of energy bill relief paid to households since December 2022 has come from the Commonwealth or state budgets — meaning from general taxation and, where budgets were in deficit, from borrowing — not from a lower wholesale or network cost of supplying electricity. That is a legitimate policy choice in a crisis: shifting the cost of a global shock from household bills onto the broader taxpayer base is a standard and defensible form of income smoothing. But it is a different thing from the promise that was made, which was about the price of electricity itself falling, not about the government picking up part of the tab for a price that kept rising. When the rebates are wound back or not renewed — as eventually they must be, since no government funds an open-ended electricity subsidy forever — the underlying price a household faces is the AER's Default Market Offer, not the discounted number that appeared on a rebate-affected bill. On that measure, the promise remains unmet.

A rebate lowers the number on the bill. It does not lower the price of electricity.

There is a fair question, too, about how well the rebates themselves were targeted once they were broadened. The first round, from mid-2023, went to pensioners, concession-card holders and small businesses — households with the least room to absorb a price shock. The 2024-25 Budget then made the $300 payment universal, sent to every household regardless of income, on the reasoning that a flat, simple, no-application credit was faster to deliver and politically harder to attack as means-tested relief can be. That is a defensible design choice, but it is also a less efficient one on a dollars-of-relief-per-dollar-of-need basis: a $300 credit means the same amount of budget support flowed to a household under real financial strain and to a household that barely noticed the price rise in the first place. A more tightly targeted scheme could have delivered larger relief to the households the steel-man case is really about, for the same total cost to the budget.

Part of the reason the underlying price path has not moved toward the promised trajectory is that the supply-side investment behind the modelling takes years to land, and some of it has landed later than planned. Rewiring the Nation's flagship transmission projects — including major interstate links intended to connect new renewable generation and relieve congestion in the grid — went through cost and timeline blowouts across 2023 to 2025, a pattern reported repeatedly by AEMO's own Integrated System Plan updates and by the project proponents themselves (approx.; AEMO, Integrated System Plan updates, 2023-2024). A grid transition that reduces wholesale prices only works once the transmission and generation capacity it depends on is actually built and connected; delays in that build-out are one structural reason the price relief the original modelling assumed for the mid-2020s has not yet shown up in the Default Market Offer, independent of the Ukraine shock itself.

None of this is the first time an Australian government has put a precise dollar figure on a power bill promise and then struggled to deliver it. In 2013, the Coalition campaigned on repealing the carbon tax with the claim that the average household would be around $550 a year better off; that saving, too, proved difficult to isolate cleanly in household bills once broader market movements were accounted for. The pattern is not unique to one side of politics — it is what happens when a quantified, dollar-figure promise about a price a government does not fully control meets a market that moves on its own terms. That history does not excuse the $275 promise. It does mean the lesson from this topic is bigger than one party or one election.

What the government got right

None of this should collapse into the simple claim that the government did nothing, or acted in bad faith. Compared with doing nothing, the response was substantial and reasonably well targeted at the point of maximum shock. The first round of rebates, delivered from mid-2023, concentrated relief on pensioners, other income-support recipients and concession-card holders — the households with the least capacity to absorb a sudden jump in a non-discretionary bill — before the scheme was broadened to every household in the 2024-25 Budget. The rebates were also delivered as an automatic credit on the electricity bill itself, rather than requiring households to apply for a payment, which meaningfully reduces the number of eligible people who miss out through paperwork or unfamiliarity with the system — a design choice with a real, if hard-to-quantify, benefit for the households least likely to navigate a claims process.

The temporary caps on gas and coal prices, while contentious with producers and criticised by some energy market economists for distorting investment signals, are widely credited with holding wholesale prices below where they would otherwise have gone through 2023, giving the AER's default offer determinations room to moderate after the large 2023-24 increase. The 2024-25 and 2025-26 determinations, showing increases of a few per cent rather than the 20-plus per cent jump of the year before, are consistent with that easing (approx.; AER, DMO Final Determinations 2024-25 and 2025-26). And it is worth restating plainly what the steel-man case established earlier: this was a genuinely global shock. Wholesale gas and electricity prices rose sharply across Europe and much of the OECD through 2022, and Australia's experience, while serious, was not uniquely severe by international standards. A government that had done nothing in response to a shock of that size would deserve much sharper criticism than one that spent billions cushioning it, even imperfectly.

It is also worth crediting the government for sustaining the relief rather than treating it as a one-off political fix. Three consecutive budgets — 2023-24, 2024-25 and 2025-26 — each carried a fresh round of energy bill relief, at real and growing cost to the Commonwealth's bottom line, at a time when the budget was under pressure from many directions at once. The temporary gas and coal price caps, legislated under parliamentary urgency in December 2022, required the government to intervene directly in a market it does not own, an action with real political and legal risk that a more cautious government might have avoided. Whatever judgement is reached on the $275 figure itself, the pattern of the response was persistence rather than a single headline announcement followed by neglect.

Back in Adelaide, none of this reads as abstract to Bev and Ray Callahan. They know their bill went up, they know a rebate softened it, and they know the number they were promised in 2022 has not appeared. What they cannot easily see, because it is scattered across AER determinations, AEMO market notices and four years of budget papers, is the fuller picture assembled above: a genuine global shock, a substantial and sustained taxpayer-funded response, and a promise that — measured honestly, on its own terms and its own deadline — was not kept. Households do not need to resolve that tension themselves. It is the job of a regulator, a budget process and, failing those, a masthead like this one to hold the promise and the record next to each other and report plainly on the gap.