By Dominic Giannini and Rachael Ward

Labor has used an energy rebate announcement ahead of the federal budget to ask supporters for donations to help sell its economic message.

Australians will save $150 on their power bill across two instalments from July 1, extending a previous $300 rebate to cover the rest of 2025.

The pre-election sweetener will cost about $1.8 billion and forms the centrepiece of Labor’s pre-election budget to be handed down on Tuesday.

“(The rebate) recognises that even with all the progress we’ve made together on inflation, people are still under pressure and the budget is designed to respond to that,” Treasurer Jim Chalmers said, denying it was a pre-election bribe to voters.

“More hip pocket help for households because we know people still need it.”

Labor’s fourth budget will return to the red after it posted two surpluses but the deficit is lower than predicted in previous budgets.

The rebate would slash household bills by an average of 7.5 per cent and bring down inflation by half a per cent, according to Treasury estimates cited by the government.

The Australian Energy Regulator recommended an 8.9 per cent increase to the maximum amount customers can be charged in certain parts of the nation.

Labor used the rebate announcement to rattle the tin, sending an email to supporters on Sunday asking for a $50 donation toward advertising its economic policies.

It would help fend off the Liberals who would be “desperate to re-write this story”, the email said.

The treasurer ruled out fixed childcare rates in the budget while Labor spruiked its three-day childcare subsidy as families call for more help.

“The budget will have that money for new childcare centres, it will have money for the three-day guarantee … there won’t be the fixed-fee model,” he said.

The opposition is attacking Labor for increased living costs and the need for subsidies but will support the $150 rebate.

“We will not stand in the way of that energy relief but the aim has got to be to sustainably bring down energy prices”, opposition finance spokeswoman Jane Hume said, pledging to pump more gas into the energy grid in the short term.

The Liberals have promised a better budget bottom line and lower taxes, and forecast sacking more than 30,000 public servants to make up some of the cash.

Shadow treasurer Angus Taylor says the coalition opposed $100 billion of Labor’s spending but this includes cash already out the door, meaning the Liberals would need to find spending cuts elsewhere.

The coalition has also announced tens of billions of dollars in new policies.

“We’re making promises we know we can afford but we’re going to see what’s in the budget and how much headroom there is,” he told the ABC’s Insiders program.

Senator Hume marked the National Disability Insurance Scheme – one of the biggest costs to the budget – as a target, saying growth had run out of control.

She stopped short of announcing any cuts.

Asked about the NDIS, Mr Taylor said spending shouldn’t outpace economic growth but this target was for aggregate spending rather than each program.

Opposition Leader Peter Dutton will deliver his budget reply speech on Thursday and is under pressure to announce a key election pledge, after the Liberals lost momentum in the polls in recent weeks.

Mr Dutton accused Labor of excessive migration, saying it impacted housing and rental affordability, although experts warn the housing crisis is multi-faceted and includes the supply side being choked.

“Australians are been forced out of houses, it’s meant that people are lining up for longer and paying more for rental properties, it means that Australians have just given up on the dream of home ownership,” he told reporters.