The Federal government has just wrapped up its national cabinet meeting in Canberra where the prices of gas and coal have been capped with the aim to reduce electricity prices.

New South Wales and Queensland have capped the price of coal at $125 a tonne, with the Federal government capping the price of gas for at least a year at $12 a gigajoule.

National Political Editor at Nine, Michael Pachi, spoke to Oliver Peterson on Perth Live to discuss what this means for households and small businesses.