The federal government will extend its energy bill subsidies until the end of 2025 as it frames its re-election pitch to voters around the cost of living.

From July 1 every household and about 1 million small businesses will see another $150 in rebates automatically applied to their electricity bills in quarterly instalments.

“We are going to take a further $150 right off your power bill because helping your family budget is our number one priority,” Prime Minister Anthony Albanese said in a statement.

Labor had pledged to reduce power bills by $275 a year at the 2022 election, but the average Australian household’s energy costs have risen largely due to the fallout of a global energy crunch raising the prices of coal and gas.

With the federal election expected to be called within weeks, the Albanese government has been under pressure to ease cost-of-living pressures.

Mr Albanese has named his government’s new round of energy rebates as a major reason for voters to reject the Coalition at the ballot box, given the Liberals and Nationals voted against it when parliament approved an initial package of relief at the end of 2022.

“Peter Dutton opposed the $300 energy bill relief to households,” Mr Albanese said.

“His only plan for energy is a $600 billion nuclear scheme that he will cut Medicare to pay for.”

Opposition Leader Peter Dutton had previously criticised the government’s use of one-off payments, arguing they could be inflationary and did not resolve the long-term challenges.

The Coalition will campaign to build a fleet of government-owned nuclear generators across Australia if it wins the election, starting with two plants in 2037 and reaching seven by 2050.

Treasury estimates Labor’s energy rebate will directly reduce headline inflation by about half of a percentage point in 2025, and reduce household bills by 7.5 per cent on average nationally, compared to bills without the extension.

The extension of the rebates will cost taxpayers $1.8 billion over the forward estimates.