The average east coast household bill will go from $428 a quarter to $503 from January.

Why? The end of the $150 power bill rebates from the Federal Government will push up the inflation rate, partly explaining why economists can’t see an interest rate cut until mid-2026!

But wait a minute, wasn’t the last spike in the CPI in the September quarter because of the end of rebates on power bills? Yes, while that’s right, they were state government rebates, so we know that when these nice guy subsidies end it leads to higher inflation and no rate cuts, which we saw play out last week on Cup Day, when the RBA virtually said: “No rate cut for you!”

However, PM Albanese is mounting a household cost of living rescue plan and outlined it to the Daily Telegraph’s Joe Hildebrand.

This is his possible plan:

1. He could extend the $150 rebate that lower bills.

2. Or new ways could be found to reduce the cost of living.

That’s it. That’s all he put forward, admitting his Government would maintain “a healthy Budget”, despite his intent to reduce the cost of living on average Australians.

The goal is a timely one, even if the PM’s plan doesn’t look well thought out at this stage.

Hildebrand cited a Salvation Army survey that found there were big reasons to be worried about average Aussie households. Here are the big findings:

1. 30% of families said they wouldn’t be able to afford Christmas presents for their kids.

2. 31% expected utility bills to be their biggest source of financial stress in the new year.

3. Mortgage stress was the biggie for 38% of those surveyed.

4. Insurance concerns were number one for 19%.

5. Back-to-school worries affected 7% and car payments 4%.

In case you forgot, the energy rebate was extended in March. It was a temporary help for inflation, which was swamped by the end of state rebates that showed up in the September quarter inflation number. The quarter rise of inflation was 1.2% and the annual rise was a worrying 3.2%, which killed off rate cuts for the short term.

When that number was released, the CBA economics team noted: “Electricity prices soared 9% in the September quarter, driven by annual price reviews and the timing of rebates. Power prices surged 23.6% over the 12 months. The ABS reported, “The annual rise in electricity costs is primarily related to State Government rebates being used up by households. State Government electricity rebates that were in place in September quarter 2024 included the Queensland $1,000 State rebate, the Western Australia $400 State rebate, and the Tasmania $250 State rebate. Over the year, those rebates have been used up, and those programs have finished.”

The tricky bit for the PM will be how to maintain a “healthy Budget” and deliver cost relief for average households and voters.

There are two themes that could make these two goals of the PM hard to deliver simultaneously.

The first is most governments around the world, including our federal and state governments, carry big debts boosted by the Covid lockdowns. Second, a stock market selloff can’t be ruled out after some big rises in the past three years. This could mean budgets might have to blow out more to stop unemployment surging.

Budget experts are tipping retirees with big super balances will become those who’ll be milked by governments to ensure cost-of-living relief happens without pumping up bigger deficits.

Of course, if a big stock market crash happens, then inflation and interest rate cuts will be the least of Albo’s and Jim Chalmers’ concerns. It will be how to win an election with lots of Aussies out of work!

Better hope Donald Trump and other global leaders — both political and corporate — help in order to avoid a stock market crash.