Energy grants to give small businesses bill relief

Minister for Small Business Julie Collins said the funds provided under the $62 million program could be used to upgrade or replace inefficient or outdated equipment such as old air conditioners and gas heating boilers as well as undertaking energy audits or installing energy monitoring systems.

Ms Collins said the initiative was aimed at helping ease the financial pressure on business from rising power bills.

"Across the country I hear from small businesses who tell me that energy prices are an increasing cost to their business," the minister said.

"The grants will provide practical assistance alongside the government's whole-of-economy approach to rising energy costs, giving businesses more security and confidence."

In the first round of the program, applicants will share in $16 million of grants.

The initiative comes amid signs that the financial squeeze from soaring energy bills is biting.

Electricity prices climbed 7 per cent nationally in the December quarter as government rebates in the ACT and Western Australia lapsed while gas prices were up 17 per cent from a year earlier.

Retail prices for electricity and gas have surged by between 10 and 15 per cent since mid-2022, according to the Reserve Bank of Australia, which warned that gas price increases early this year will be greater than was expected just a few months ago.

But the central bank expects energy price increases later this year and through 2024 to be lower than previously anticipated because of the federal government's Energy Price Relief Plan, which sets a temporary $12 per gigajoule cap on wholesale gas prices, supports a $125 per tonne limit on the cost of coal used for electricity generation and establishes a $1.5 billion Energy Bill Relief Fund.

The government claims the measures will make the average family energy bill $230 lower than it would otherwise have been.

But elevated energy prices are exacerbating the nation's inflation challenge.

Households are not only being hit with bigger electricity and gas charges from suppliers, but are also picking up much of the tab for elevated business energy costs as operators seek to pass them on in higher prices at the checkout.

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