Environment Minister Murray Watt has praised the federal government's Cheaper Home Batteries Scheme as "phenomenally successful" even as the government searches for savings across portfolios, with speculation that the $7.2 billion program may be cut back or means-tested.
Senator Watt said from Brisbane that every minister had been asked to find savings in their portfolios, as pressure mounts on the Albanese government to cut spending following the Reserve Bank's fifth rate rise this year, which brought the cash rate to an 18-year high.
The prime minister told the ABC that means-testing home battery or electric vehicle subsidies was not ruled out. The Australian Financial Review reported Treasury is drafting options to cut back the scheme, including lowering the up-front subsidy.
The Cheaper Home Batteries Scheme provides an up-front discount covering about 25 per cent of the cost. Energy Minister Chris Bowen, who is travelling to Türkiye for the COP31 climate summit, celebrated on social media that 600,000 home batteries had been installed since the program began in 2025, saying the batteries "are also putting downward pressure on prices for everyone, whether or not you have a battery". Changes to the rebates came into effect in May this year in a bid to ensure the $7.2 billion scheme did not run out of money too quickly.
Senator Watt said where savings could be found was still under review through the Expenditure Review Committee. "But again, we will be looking for savings right across government," he said. "Every single minister in the government has been asked to find savings in their portfolios, just like we've been asked to do so in every budget update."
Shadow Energy Minister Dan Tehan called the program "unsafe and unaffordable" and said it must go. "If Labor were serious about addressing inflation, they would simply scrap the subsidy altogether," Mr Tehan said in a statement.
Asked by reporters in Melbourne whether the government should consider means-testing the program, Shadow Treasurer Tim Wilson said: "Our focus is getting rid of government programs that are stoking inflation right now; that's why we've put $31.3 billion in savings before the Albanese government."
Senator Watt accused the opposition of blocking "$10 billion of savings" currently before the Senate. "On their logic, if they're saying that increased spending means higher inflation, then they are driving inflation higher by refusing to back in those savings that we've put forward," he said.
Analysis
Why This Matters
- The outcome of the savings review could directly affect households considering home battery installations, potentially reducing the subsidy or introducing means-testing.
- The debate reflects broader political pressure on the government to address inflation after a series of rate rises, with the opposition framing the scheme as inflationary.
- The mid-year budget update (MYEFO) will be a key test of the government's fiscal strategy, with decisions on the battery scheme likely to signal its broader approach to cost-of-living measures.
Background
The Cheaper Home Batteries Scheme is a $7.2 billion federal program that offers an up-front discount of about 25 per cent on home battery systems. It began in 2025, and by November 2026, 600,000 installations had been reported. The scheme was adjusted in May 2026 to slow spending and ensure it did not run out of funds prematurely. The Reserve Bank has raised interest rates five times in 2026, pushing the cash rate to an 18-year high, adding pressure on the government to cut spending in the upcoming MYEFO.
Key Perspectives
Environment Minister Murray Watt: Praised the scheme as "phenomenally successful" but confirmed all ministers are looking for savings across government. He accused the opposition of blocking $10 billion in savings in the Senate, arguing that by their logic they are driving inflation higher.
Energy Minister Chris Bowen: (via social media) Celebrated 600,000 installations and said batteries are putting downward pressure on prices for everyone.
Shadow Energy Minister Dan Tehan: Called the program "unsafe and unaffordable" and said it must be scrapped entirely to address inflation.
Shadow Treasurer Tim Wilson: Said the opposition's focus is getting rid of government programs stoking inflation, noting they have put $31.3 billion in savings before the government.
What to Watch
- The MYEFO release, expected in December 2026, which will reveal any changes to the home battery subsidy.
- The Expenditure Review Committee's decisions on where savings will be made across portfolios.
- Further rate decisions by the RBA and their impact on the government's fiscal position.
Checked
12 claims in this story checked against 1 source: 12 supported.
Show each claim
- SupportedWatt praised the Cheaper Home Batteries Scheme as “phenomenally successful”.Just In: “Senator Watt said where savings could be found was still under review through the Expenditure Review Committee [ERC], but lauded the Cheaper Home Batteries Scheme as "phenomenally successful".”
- SupportedWatt said every minister had been asked to find savings in their portfolio.Just In: “"Every single minister in the government has been asked to find savings in their portfolios, just like we've been asked to do so in every budget update."”
- SupportedThe RBA lifted interest rates for the fifth time that year, bringing the cash rate to an 18-year high.Just In: “The RBA this week lifted interest rates for the fifth time this year, bringing the cash rate to an 18-year high”
- SupportedThe prime minister told the ABC that means-testing home battery or electric-vehicle subsidies was not ruled out.Just In: “the prime minister telling the ABC that means-testing home battery or electric vehicle subsidies was not ruled out.”
- SupportedThe Australian Financial Review reported Treasury was drafting options to cut back the battery scheme, including lowering its up-front subsidy.Just In: “On Saturday, the Australian Financial Review reported Treasury is drafting options to cut back the home battery scheme, including lowering the subsidy available on the up-front cost of a unit.”
- SupportedThe scheme provides an up-front discount covering about 25 per cent of the cost.Just In: “The home battery subsidy scheme provides an up-front discount that covers around 25 per cent of the cost.”
- SupportedBowen celebrated 600,000 home-battery installations since the program began in 2025.Just In: “Mr Bowen took to social media on Friday to celebrate 600,000 home batteries being installed since the program began in 2025.”
- SupportedBowen said the batteries were putting downward pressure on prices for everyone, including people without a battery.Just In: “"They are also putting downward pressure on prices for everyone, whether or not you have a battery," he said in the post.”
- SupportedChanges to the rebates took effect in May to help prevent the $7.2 billion scheme from running out of money too quickly.Just In: “Changes to home battery rebates came into effect in May this year, in a bid to ensure the $7.2 billion scheme did not run out of money too quickly.”
- SupportedTehan called the program “unsafe and unaffordable” and said it must go.Just In: “Shadow Energy Minister Dan Tehan said the program, which he labelled "unsafe and unaffordable", must go.”
- SupportedTehan said Labor should scrap the subsidy if it was serious about addressing inflation.Just In: “"If Labor were serious about addressing inflation, they would simply scrap the subsidy altogether," Mr Tehan said in a statement.”
- SupportedWatt accused the opposition of blocking $10 billion in savings before the Senate.Just In: “Senator Watt accused the opposition of blocking "$10 billion of savings" currently before the Senate.”