Calombaris is a victim in one way

Via the AFR comes ALP boffin Tony Burke:

Some bosses deliberately under pay their workers. Some do it by mistake. But either way, bosses who rip off their workers are not victims.

He bears responsibility for failing to pay his staff properly. He bears responsibility for the reputational damage the scandal did to his company. And he bears responsibility for the ultimate failure of that company.

It’s devastating for the hundreds of workers now out of jobs. But Calombaris bears responsibility for this too.

It’s not the fault of the unions that campaigned to make sure workers got what they were owed; it’s not the fault of the media who wrote about the scandal; and it’s not the fault of the regulator that ultimately held him to account.

Quite right. This is a response to yesterday’s egregious AFR apologist piece:

The hospitality sector is blaming the Fair Work Ombudsman’s “name and shame” campaign for driving the collapse of George Calombaris’ restaurant empire with warnings more jobs are at risk.

Administrator Craig Shepard said the $7.8 million wages underpayment scandal was a big factor in the collapse with the number of diners “50 per cent down on where they were expected to be” in the wake of the scandal.

“The industry is facing a perfect storm: business inability to raise prices while wages, rents and food and beverage costs, utilities have all skyrocketed,” Restaurant and Catering Association chief executive Wes Lambert said.

Burke does not mention the one excuse that does add up:

utilities have all skyrocketed

Every business in the eastern economy is a victim in this regard. Skyrocketing utility prices were neither necessary nor inevitable. They have been allowed by the Coalition Government which has debauched Australian energy markets for its own gain. How?

They’re in bed with the gas export cartel. Since 2014, it has exported massive quanitities of cheap Aussie gas while drip feeding the local market with disciminatory pricing.

This has directly resulted in much higher electricity prices as gas sets the marginal cost of power.

Centre Alliance forced the Coalition to finally address this last year when it swapped approval for massive tax cuts for putting a price trigger into the Australian Gas Domestic Security Mechanism (ADGSM). The review came down a few weeks ago and agreed:

The review recognises that price is an important indicator in establishing whether the domestic market is functioning effectively and considers that the ACCC’s forward LNG netback price series is the most applicable prices when estimating the likelihood and extent of a potential shortfall. As such, the review recommends amending the ADGSM’s guidelines to include referencing the ACCC’s LNG netback price series in estimating a potential shortfall.

This amendment clarifies the relevance of the ACCC’s LNG netback price series to considerations under the ADGSM and strengthens the ADGSM’s ability to deliver on its objective of securing domestic gas supply.

The ACCC net back price today is $2.70Gj. 95% of volumes on the east coast are still being sold at $11Gj. Gas and power bills are much higher than they should be as a result.

But, then, along came the bushfires and an exposed ScoMo needed a climate policy so what did he do? He can’t use a carbon price or an emissions cut. He’ll lose party room support. So he turned to gas. Rather than deliver on his promise to Centre Alliance, he made gas a giant poitical wedge. Instead of pulling the trigger on the ADGSM, he campaigned for more gas supply. And so, yesterday, we got this from the new Resources Mininster, Keith Pitt, at Domain:

“I think we should use every opportunity to utilise the common wealth for the common good,” Mr Pitt said in an interview with The Sydney Morning Herald and The Age in his first days in the position.

Mr Pitt backed the vast Santos project to extract gas from the land around Narrabri in northern NSW, saying it could supply more than half the state’s gas demand and in doing so could support manufacturing jobs and lower gas prices.

“Of course with any new gas development we must ensure that our precious water resources are protected, that high value farm land is protected and that local communities and local business get real benefits and real jobs,” he said.

Mr Pitt also slammed the Victorian government’s moratorium on onshore gas exploration as a threat to jobs.

“If we don’t explore and develop new gas supplies, we are consigning a lot of our manufacturing sector to outsourcing overseas and making families and businesses pay more for energy supplies,” he said.

This is not about delivering cheap gas. It’s about giving gas cartelier, Santos, a win at everybody else’s expense. Narrabri gas is NOT cheap at $7-8Gj and delivered more like $9-10Gj. So if it lowers prices at all it will be by a little.

Meanwhile, all we have to do to crash the gas and power prices is trigger the ADGSM reform agreed with Centre Alliance. Because the global glut is vast and unending for a decade at least, the net back price that governs the ADGSM will remain low, very likely much lower than Narrabri can deliver for many years.

Not doing so means businesses across the eastern seaboard will continue to have their margins squeezed by the Coalition and its good mate the gas cartel.

Forcing them to do all sorts of dodgy stuff like good old George.

David Llewellyn-Smith
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Comments

  1. It’s incredible that this gas price rort has not brought this government down years ago. what a country we are. This and excessive immigration are destroying everything that used to be good here and the population either don’t know don’t care or are such good little sheep they just accept it as the new normal. pathetic.

  2. utilities have all skyrocketed………………along with the cost of most essential items necessary for a basic standard of living. This country continues to suck the life blood out of its population who struggle on a daily basis just to make ends meet, while making sure our monstrous mortgage repayments do not get us into further trouble. Inflation in this country is everywhere if you care to open your eyes, add in stagnant wages and our gooses continue to be cooked.

    But according to MB, inflation is not a concern, it keeps pulling a donut, another nothing burger. Move along folks, nothing to see here at all, not even a little bit.

    https://www.macrobusiness.com.au/2020/01/australian-inflation-another-nothing-burger/

    Slight headline beat on stuff that is already collpasing in price, holidays and oil. Fruit is fire related. Tobacco is tax-related. Core inflation going absolutely nowhere.

    Nothing here to stop the RBA if it wishes to move.

    Chortle……..

  3. Some do it by mistake

    That statement is not true, and we can prove it mathematically!

    If payment errors were a mistake then there should be as many cases of OVER-PAYMENT as underpayment. But there seems to be NO cases of over-payment. Hence ‘I made a mistake’ must just be an excuse – when the real excuse is ‘I made a mistake in getting caught’.

  4. Is there a class action here against the government apropos reticence to pull the gas reservation trigher