Labor ignores gas cartel plundering


He may end up as energy minister so here’s Chris Bowen on the energy shock rising across the east coast:

Labor frontbencher Chris Bowen says the release of the Australian Energy Regulator’s final default market offer for the next financial year represents bad news for households.

While there are international factors at play, Bowen blames higher prices on what he describes as nine years of policy failure under the former Coalition government.

“The fact of the matter is higher energy prices are bad news. The fact of the matter is higher energy prices are very much the Liberal legacy,” he said.

“Nine years of delay and denial comes at a cost, and this cost is being paid by Australians. Tragically today, this cost will be borne by Australian households.”

The default market offer acts as a safety net for electricity customers who haven’t shopped around for a better deal. Bowen encouraged people to look at other offers to save money.

He said Labor would drive an increase in investment in renewables as well as transmission to better equip the electricity grid to cope with a rising proportion of renewable energy.

“The fact of the matter is the lack of energy policy, the lack of investment in new energy, the lack of investment in renewable energy, and the lack of transmission over the last nine years means that Australians are paying more for electricity than they should be.”

Errr…sure…but what about the primary driver, mate? The gas cartel gouge has Australia paying $35 for its own $1Gj gas:


This is the same price that Europe is paying for Russian gas with whom it is at war. The same Aussie gas is cheaper in China at $31Gj.

And gas sets the marginal cost of electricity.

This outright theft of Australian income by a vehemently anti-competitive gas export cartel can be stopped with the stroke of a pen by triggering the Australian Domestic Gas Security Mechanism (ADGSM).

How can the likely incoming energy minister possibly fail to observe any of this?

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.