The Australian government has unveiled a $3.5 billion energy bill relief package aimed at reducing the financial burden on households and small businesses.

A $300 rebate will be provided off electricity bills for all 10 million households and 1 million small businesses during the next financial year.

The relief measure will deliver a $75 reduction on quarterly bills, which will be automatically applied by energy retailers.

While the rebate is intended to ease the cost-of-living for a broad range of the population, it will also benefit wealthier Australians.

Economists warn that the rebate's effect on inflation is complex, possibly fueling demand and affecting the economy in various ways.

Some states are supplementing the federal government's initiative with their own energy bill relief payments.