National Cabinet has agreed on an assistance package to help households and business combat soaring electricity prices.

NSW and Queensland will cap the price of coal, and the federal government will cap the price of gas.

But it could be months before the changes filter though, so Australians will be offered a discount on their electricity bills, rather than a cash handout.

Neil Breen broke down the four elements of the announcement, including the Commonwealth working with NSW and Queensland to introduce a temporary 12 month coal price cap of $125 per tonne. 

The major aspect for Australians is the targeted bill relief.

Press PLAY below to hear Neil explain more

Federal Parliament will be recalled next week to deal with the legislation.

In announcing the measures, Prime Minister Anthony Albanese said the government was taking urgent action for Australians.

“Extraordinary times call for extraordinary measures,” Mr Albanese said.