War-profiteering energy shocks Australia towards recession

The Albanese Government had better look up the history of the Labor Scullin Government of 1929:

James Henry Scullin (18 September 1876 – 28 January 1953) was an Australian Labor Party politician and the ninth Prime Minister of Australia. Scullin led Labor to government at the 1929 election. He was the first Catholic, as well as Irish-Australian, to serve as Prime Minister of Australia.[1] The Wall Street Crash of 1929 transpired just two days after his swearing in, which would herald the beginning of the Great Depression in Australia. Scullin’s administration would soon be overwhelmed by the economic crisis, with interpersonal and policy disagreements causing a three-way split of his party that would bring down the government in late 1931. Despite his chaotic term of office, Scullin remained a leading figure in the Labor movement throughout his lifetime, and served as an éminence grise in various capacities for the party until his retirement in 1949.

…After Scullin had won a landslide election in 1929, events took a dramatic change with the crisis on Wall Street and the rapid onset of the Great Depression around the world, which hit heavily indebted Australia hard. Scullin and his Treasurer Ted Theodore responded by developing several plans during 1930 and 1931 to repay foreign debt, provide relief to farmers and create economic stimulus to curb unemployment based on deficit spending and expansionary monetary policy. Although the Keynesian Revolution would see these ideas adopted by most Western nations by the end of the decade, in 1931 such ideas were considered radical and the plans were bitterly opposed by many who feared hyperinflation and economic ruin. The still opposition-dominated Senate, and the conservative-dominated boards of the Commonwealth Bank and Loan Council, repeatedly blocked the plans.

With the prospect of bankruptcy facing the government, Scullin backed down and instead advanced the Premiers’ Plan, a far more conservative measure that met the crisis with severe cutbacks in government spending. Pensioners and other core Labor constituencies were severely affected by the cuts, leading to a widespread revolt and multiple defections in parliament. After several months of infighting the government collapsed, and was resoundingly defeated by the newly formed United Australia Party at the subsequent 1931 election.

The analogy today is between Scullin’s progressive macro policy and Albo’s progressive energy policy.

Scullin aimed to use a series of excellent proto-Keynesian policies ahead of their time but failed to implement them as he was run down by an economic crisis.

Albo has a series of excellent progressive energy policies ahead of their time (or, at least, on time) but he is about to be overwhelmed by an economic crisis that will make them impossible to implement.

And make no mistake, he will be blamed for it and entrench the Labor moniker of “poor economic manager” for another generation.

The crisis I am referring to is the most ridiculous case of self-inflicted economic harm I have ever seen. More unnecessary than tits on a bull. And entirely resolvable with the stroke of a pen.

It is the unabashed war-profiteering by a gas export cartel and coal producers on the east coast.

Since the Ukraine war began, Australian coal prices have risen by around 300%. Australian gas prices have risen by around 700%.

This war windfall is now threatening to plunge the entire economy into recession via massive demand destruction and runaway interest rate hikes. To wit:

The cost of living pressures come as NSW household customers of power retailer Electricity in a Box have been told of a 95 per cent increase in their bills. Gas prices have surged four-fold for two textile manufacturers in Melbourne as the global energy crunch finally slams home.

The extraordinary price increases provide evidence that the regulated rise in electricity tariffs of up to 18 per cent announced this week is only a pale shadow of the dark energy price crisis starting to grip Australia, which has been described by one energy user as “frightening”⁣.

They have dashed hopes that homes and businesses will escape the crisis that has plagued European markets, pushed homes into energy poverty and closed energy-intensive manufacturing plants.

The crunch also increases the complexity of the emissions reductions task for Australia’s new Labor government, already under pressure on climate commitments and which had promised before the election – as had the Coalition – lower energy prices under its watch.

…The wholesale electricity price went from $48.90 a megawatt-hour in September to $77.17/MWh by January, then to just more than $100/MWh by March, according to Schneider Electric. But this month, they are running at more than $300/MWh, and forward prices have also surged.

Spot gas prices on the east coast have gone from less than $10 a gigajoule at the start of the year to average about $16/GJ in April, but were at $50/GJ in Sydney on Friday.

The consequences of this twin energy war-profiteering are five political economy shocks that will crash the economy and the Albanese Government.

Demand destruction for business

As things stand, gas bills will rise 500-1000% over the next few years. This is going to wipe out what remains of Australian manufacturing.

The Albanese Government has a mandate to repair manufacturing owing to the fragility exposed by China and the pandemic in the past few years. We will see the opposite as the post-2014 trend shutdown of industrial gas users dramatically accelerates:

Even worse, gas-fired power stations often set the marginal cost of electricity, especially in VIC and SA.

Add that coal plays a large role in NSW and QLD for wholesale electricity prices and what we get is a scenario in which every business on the east coast is going to see energy bill increases from 100-200% in the next two years. Swathes are going to shut, sack workers, and wind back investment.

Demand destruction for households

Utility bills make up only 3% of the CPI but if they double or triple then that is a corresponding income shock to every household east of WA. In effect, this is a 4-6% real wage cut over the next two years.

This will come straight out of discretionary spending budgets and hammer the entire consumption sector which is 55% of GDP. Roughly speaking it is a hit of $20-33bn a year in spending and double that in year two.

It will smash growth.

CPI crisis, rate hikes and house price crashes

3% of the CPI does not sound like a lot. But if that price doubles or triples then it is gigantic. The RBA will have…wait for it…an additional 4-6% of inflation over the next two years to deal with.

But that’s not even the worst of it. Every business east of WA will have to pass on the new cost. So, the 60% of the economy that is non-tradable will add another 1.5-1.8% to the CPI each year. Tradable may add it too. A total of 7.5-9.8% extra inflation over two years.

This will deliver the runaway interest rates that futures markets have been forecasting as the RBA is forced to tighten enough to “make room” for an economically empty war-profiteering price shock.

A house price crash will follow which will, in turn, crater the banking system. And drive the AUD to the moon in the middle of a recession triggering even more hollowing out.

Obviously enough, such a destroyed economy will entrench Labor as the greatest economic mismanager of all time.

Budget demolition and inequitable distribution

The federal budget will be hammered on multiple fronts.

First, the recession will gut income and radically lift outgoings.

Second, interest rate payments of the huge natiaon debt wil balloon.

Third, the poorer you are, the higher the proportion that utility bills make up of your outgoings. So much greater compensation will be paid to low-income households.

Fourth, there will be some benefit from coal profits but the gas cartel pays NO TAX. So, unbelievably, there is no upside from its increased export earnings.

Energy transition wreckage

Throughout the gas cartel gouge since 2014, the Coalition mischievously blamed rising power costs on the rollout of renewables. In truth, it was the rise in the renewable capacity that was holding down the gas-fired power price rises.

With the Albanese Government having adopted aggressive decarbonisation targets, the twin war-profiteering energy shock is a political double-whammy brewing that will be a gift to these same LNP fossil fuel interests.

Renewables will require sustained gas peakers for dispatchable power for many years yet. Indeed, as the coal fleet shuts, the grid may become more reliant on gas-fired power as batteries and other firming power are built out.

And coal is still the dominant baseload power source in NSW and QLD so, there, the price rises will be relentless as well.

The LNP is obviously going to blame any and all power price rises on renewables and, as we’ve seen time again in energy politics, the details are too complex for punters to grasp for the centre to hold (not even the MSM has a clue or is corrupt).

This has within it the seeds of a spectacular LNP revival and one-term Albanese catastrophe for Labor.

What should the Albanese Government do?

The Ukraine war is not ending any time soon and, more importantly, the Russian sanctions regime that inhibiting the flow of gas and coal to Europe is all but permanent. The European ban on Russian coal does not even start until August.

Gas and coal prices will come down eventually as the supply of global supply adjusts and renewable investment skyrockets, but not swiftly enough to prevent the above economic disaster for Australia. For the time being, the European war is the marginal price setter for both gas and coal prices globally.

In these circumstances, the Albanese Government should apply a 100% export tax to all coal and gas exporters on the east coast, benchmarked to pre-Ukraine war prices. The producers should not be allowed to war-profiteer. This is a classic windfall and belongs to the owners of the assets, the Australian people.

This would instantly return local prices to pre-war levels and deliver an immense budget windfall to Australia that could be saved or distributed as the economic cycle and politics demand.

In effect, this is similar to the policy now underway in the UK. Albo unwisely ruled it out on Friday.

What the Albanese Government is capable of doing

We all know why Albo was so quick to rule out a war-profiteering is “super-profits” tax. Labor is deeply scarred by its mishandling of the Rudd super profits tax episode which ultimately cost it government via relentless infighting.

There is also the issue of press capability and bias. The former has declined materially over the past decade as the latter increases. LNP stooges now occupy Murdoch, former Fairfax turned Nine, and the ABC. Any attempt at national interest policy over private sector gouging will send them into an anti-tax frenzy.

But the Albanese Government MUST do something very serious, and it will almost certainly send the Minerals and Gas lobbies into meltdown so the politics of it matter.

The answer for gas

NSW has begun subsidising utility bills for consumers. More will surely follow everywhere. Without any new and fiscally sterilising tax take tax, this is a terrible idea. Such bill subsidies are essentially recycling the wider tax base as a war-profiteering subsidy for the gas cartel.

It will be a huge budget drain, can’t possibly be large enough to backfill the growth shock, and will only make the inflation consequences worse.

Thankfully, Australia is not trapped by such terrible policy choices. As the above chart shows, the east coast economy has a staggering amount of gas production. The problem is that three-quarters of it is being exported to China.

The answer for the east coast is so blindingly obvious that the longer Labor leaves it the more idiotic it is going to look. We need to keep 5-10% of those export volumes at home to force the gas price back to $7Gj.

Holding back gas volumes for Australia’s east coast economy does not even require policy innovation nor is it a political risk. It is already bipartisan. The Coalition created the Australian Domestic Gas Security Mechanism (ADGSM) in 2017. At the time it was written, gas prices collapsed from $20Gj to $10Gj. And that was achieved only by PM Turnbull threatening to trigger the Heads of Agreement.

All the PM needs to do is trigger the ADGSM and call in the gas cartel executives for a polite chat in which he makes clear that the local gas price will either fall below $10Gj in the near future or he will trigger the ADGSM, as well as toughen it with explicit price targets as necessary.

If the cartel resists then Albo can recount the history of the LNG boom and the broken promises of the cartel which assured Australian authorities that there would be plenty of gas for Australia despite the new exports.

It may result in a few LNG cargoes declaring force majeur and piss off China. But who cares if their prices rise a bit, meaning that it costs the gas cartel nothing to hold back volumes anyway.

In selling this to the Australian public, all Albo needs to do is to point to WA where gas reservation has held the price at $5.5GJ, 1000% lower.

The cartel will fold like the very expensive suits that they are.

The answer for coal

The answer for coal is more complex but can be couched in the same way. Given export taxes are likely beyond Albo, he should create a domestic reservation facility for coal that is analogous to and works in tandem with the ADGSM.

The coal industry is more fragmented, with more mines, many different arrangements in contracts, captured output etc, so it will need a different mechanism.

I suggest a Domestic Coal Security Mechanism which applies a 100% levy on all domestic sales above $100 per tonne. To drive compliance, $20 per tonne of this levy is returned to those mines that meet the sales price criteria.

The tandem reservation policies can be bundled together as a single Domestic Energy Security body governed directly by PM&C.

Conclusion

There are plenty of ways of doing this. The point is it must be done.

Either Albo’s dream economic team of Andrew Leigh, Andrew Charlton and Jim Chalmers act to cut domestic energy prices off at the knees or the Albanese Government will be stillborn into a crisis so large that it will stamp Labor as economically inept for living memory.

To put it bluntly, does Albo want to be Bob Hawke or Jim Scullin?

Houses and Holes

Comments

  1. How can you get this message direct to them? Don’t know that they read Macrobusiness.

  2. If only there were independent members of parliament (House or Senate) that understood ADGSM and held the govt. to account. But this is not the remit of the current crop of independents and is not what their representative demographic understands or wants.

    • Maybe Simon can bring the so called teals around, he was in large part responsible for their success after all.

      • I think he/they will be cheering this all the way home.

        Will be a big spur for renewables investment

  3. Higher interest rates will be welcomed.
    We don’t need to protect housing FFS

  4. ErmingtonPlumbingMEMBER

    I think everyone should Tweet this article or post it on Facebook or whatever other social media they use.
    This is one of the most important issues of the day and yet our mainstream media remain silent on it.
    I hope it’s not locked for non-subscribers Dave

    • It’s unlocked!
      Everyone should post this to every social possible, house prices demand on it!!!
      THAT’LL GET THEIR ATTENTION😜

      PS, get ADGSM trending

  5. Thanks for keeping this open to all.

    Are you 100% that Albo etc (or their close reports) read MB?

    Be good to see this in the Herald Sun/news.com.au

    Wonder if RN breakfast would cover this

    • bolstroodMEMBER

      Good that it is open.
      I am posting it to 200 active political people right now.
      Well done MB , a great article and very timely.

      • Hanabeth should start campaigning on this locally for next election

        I emailed her and Deegan about it before the election / be good to get a response to hear their thoughts

        Reckon Labor need someone else

    • The Wizz of Ozz

      Swampy must be like milo he started with plastic toy mower and worked he’s way up to the biggest push mower calf to bull lolol keep mowing

  6. Part of me hopes they don’t implement ADGSM or windfall tax (given they are paralysed by past events, it’s quiet likely) and Australia has an epic meltdown that will scar us for generations.

    Albo & Labor do likely seem to have the choice to either set Labor on a new course or be crushed forever next election. So far they have shown nothing that makes me think the former (though some of the bits & pieces published about Albo’s early days might suggest he has a revolutionary streak) so I’m expecting tinkering. Going hard could be their only chance of survival, assuming things play out as above.

    • DingwallMEMBER

      This is the very scary thing about the current state of Australia politics and leadership. Charting and guiding us on a new course to somewhere better seems to be just too hard for either party…… so we just get 3-6 years of sh!t while the equally sh!t opposition do nothing waiting for the incumbents to explode. No dynasties, no strategy, no progressive, innovative and delivered solutions, ………….. their only KPI seems to be property prices.

    • hareebaMEMBER

      Jim Chalmers, Albo and courageous on policy. No.
      I am going long on firewood.

  7. Scullin was the one brought in tariffs to set up and protect manufacturing industry?
    Here’s my annual plug for Power without Glory…still reads remarkably fresh. With a slight change from Keith to Rupert in the modern era.
    https://www.goodreads.com/book/show/500740.Power_Without_Glory
    “This is a tale of corruption stretching from street corner SP bookmaking to the most influential men in the land – and the terrible personal cost of the power such corruption brings.”

  8. DingwallMEMBER

    This is going to wipe out what remains of Australian manufacturing
    Seems to have been the plan all along. I guess the aim is to assume commodities will always keep the poo over 70c and we just import pretty much everything we need. Cross fingers and hope is the usual plan…………..

  9. There are forces starting to operate that are beyond Australia’s control,,,,,,,,,in the background is the fact that the way we built our civilisation is no longer fit for purpose…..we need to reduce our energy intensity all around or the self-organising economy we have now will do it for us.

    https://consciousnessofsheep.co.uk/2022/05/27/the-complexity-trap/

    And then there is the suspicion that for geo-political reasons the Fed and the deep state behind it may have decided that to cope with the challenges of a multi-polar world the cost of capital will have to rise again like the 40’s and 70’s …….say 2% this year and 4% next year and so on over the next decade. This is to drive re-shoring of production and with zombies comprising nearly 30% of US companies now the world will turn on its head.

    https://twitter.com/CT_Osprey/status/1530909425204076547

    I can’t see NATO receding from their maximum pressure campaigns in any reasonable time frame so the geo-political drivers of supply induced inflation can’t go away……what proportion of overall inflation that is we will know when our economies slow noticeably.

  10. If Labor had a clear majority then ADGSM would be a no brainer, but that’s not reality.
    Over the next 3 years Labor will need to have the support of the Greens and at least some of the Teal’s to be able to govern effectively. With this in mind
    -Which of the Teal’s values Aussie Manufacturing? (I don’t know either)
    -Can the Greens embrace a sensible Fossil fuel policy? (Policy that keeps Aussie manufacturing alive at least for a few more years. (Hydrogen transition period))
    If Albo can’t get Teal and Green buyin then he’s F’ed, so it seems to me our modern day “Industrial Policy” (Gas / Coal reservation) needs to start by acknowledging this political reality.

  11. Grand Funk RailroadMEMBER

    All good stuff and perfectly true, and Scullin is a likely comparison.

    But the real teeth gnashing hostility is likely to come from food price inflation which is also being baked in by the Ukraine war.

    Currently Russia and Kazakhstan have banned grain exports, Ukraine cannot harvest circa 40% of its current crop (notably wheat barley and mmaize) and cant sow.

    The largest chunk of the Middle East gets its grain from Russia or Ukraine. As that pressure starts to really build in the coming Northern autumn (our spring) we will see Australian grain in big demand, and that will have some flow onto local food prices (although Australia should have no sense of ‘crisis’ as much of the Middle east will know it.

    Putin is effectively holding a chunk of the world to ransom for its food. The Lithuanians are floating the idea of a force to somehow open up Ukraines grain ports. One wonders how much of a goer that is likely to be – starting from would the Turks even let a force into the Black sea?

    It is all looking uglier by the day inside Ukraine, with the Ukrainians running lower on numbers to actually give the Russians a belting, and the Russians, while still ostentatiously profligate vis leaving kit alll over the country in various states of disrepair, showing some tactical ability and a bit of focus.

    There should have been some deals done years (or at least a year) ago…….but suggesting that makes one a Putin lover.

    • ErmingtonPlumbingMEMBER

      I reckon All the West had to do was authorise Putins seizure of the Crimea and the Russians wouldn’t even be in the Ukraine now.
      Does my opinion make me Putin lover?

      • Grand Funk RailroadMEMBER

        Well therein lays the problem.

        Russian did certainly militarily seize and annexe Crimea, but the locals are certainly pro Russia – I was chatting with a friend in Yalta this morning in the small hours.

        The Ukrainians – presumably fired up by a sudden supply of quality arms and lots of quality PR – are talking the pre 2014 boundaries as ‘non negotiable’, and walking that back to anywhere within sight of doing a deal with the evil Russians, and the evil VVP, isnt going to get off the ground at the moment or for the foreseeable. From the Ukrainian point of view why should it? It is their country, and VVP is stealing it from them, and now the bastard has invaded them, and bumping off and committing atrocities against their civilians, they are calling in the box and dice. They also have the prospect of circa $350 Billion in ‘reparations’ or ‘damages’ in play, and an ongoing stream of fresh kit at any any point they look like running out. One of the Australian Bushmaster vehicles ScoMo gave them ended up as a piece of roadside debris in Eastern Ukraine too.

        Of course the Russians, they won’t be walking anything back either. They have militarily invaded their next door neighbours, slaughtering and raping civilians, and are getting up towards maybe 30 thousand casualties they havent actually said all that much about to their people. And they have wheeled out the Chechens and blown an awful lot of kit. They are now handing out their passports to people who a few months ago had Ukrainian passports. Word on the street is that there are plenty of takers for those too. They are slowly telling their people about an existential struggle, and have dropped references to Nazis, and although they don’t come out and say it all that much every man jack of the punters on the streets of Russian knows that it is those evil threatening bastards in NATO fronted by the evil Joe Biden who are behind all this.

        That Putin loving idea from a year ago about doing a deal to say no Nukes aimed at Moscow from Ukraine – that isnt going to get a look in either.

        So those big Putin loving ideas – a bit of real estate horse trading, easing off on the missile placements – they were doable back as far as late January, but they arent now.

        Everyone is in it for the ’win’ now and everyone has couched a ‘win’ as the other side losing – and the other side losing isgoing to be very very expensive all round. And while everyone is in that frame of mind the daily bread across much of the world will become a touch more expensive, and the fuel dynamics – especially later this year in Europe – are worth keeping an eye on.

        • ErmingtonPlumbingMEMBER

          If Putin really does find himself in a losing situation,
          Not just getting kicked out of Ukraine but actually seeing a western lead Orange Revolution style of overthrow in Russia, then watch the Nukes fly.
          If the West destroy him then a bunch of cities in the West are gunna get Nuked before he goes down.
          That’s what’s at stake,…all for the sake of stopping the Crimea (arguably Russian territory for almost 300 years) being ceased by Russia after the Ukraine joined the West.
          In retrospect a fair trade compared to the disaster that is now unfolding.

          • You’re not entirely wrong. It was Khruschev’s whim to gift Crimea to Ukraine. It seemed to matter little in the Soviet days,
            having only admin borders inside the USSR. But Crimea and large parts of the SE Ukraine were previously Turcic Tatar’s territories,
            conquered by the Tsarist Russia… My point is: every square inch of Eurasia has seen hundreds of rulers come and go. So who can draw the line
            in history and say this is the time that matters? Well, VVP thinks he can. But, it goes against the International Law, since Yeltsin recognized Ukraine’s borders in 1991. Anyway, if you believe you would have satisfied his appetite with Crimea, you’re right… for a year or two, Then he’d move to seize Odessa (a Russian speaking port), then move onto “Transnistria” (in Moldova), then the rest…
            Chamberlain and you could have made great pals.

          • ErmingtonPlumbingMEMBER

            Chamberlain wasn’t up against a Nuclear armed state with the power to destroy all human civilization.

          • That’s exactly the attitude the bully was banking on.
            Thankfully, there are still people who will stand up to the bully.

          • I don’t disagree, but I don’t think it will ever get to that point, and if it does I reckon they will at least try to put him down before he pushes the button. Hopefully the rumours of his imminent demise from cancer have some truth (I note the UK Sun has come out today saying that an MI6 source reckons Putin is already dead and his body double is being trotted out for public appearances)

            Mutually assured destruction is not in the interests of Russia on the whim of an autocratic tyrant.

          • ErmingtonPlumbingMEMBER

            The Nationalistic (Fascist) government he has built up around him will leave plenty of individuals ready to push the button in the name of Mother Russia and her Honour.

            Like Nikolai Patrushev,…who like Putin, is a rabid anti-American propagandist, who recently accused the United States of planning to drop a nuke in Ukraine and then blame Russia for it. On Wednesday, he also blamed the West for seeking to destroy Russia.
            https://nypost.com/2022/05/07/nikolai-patrushev-putins-right-hand-man-is-even-more-barbaric/

            or how about this Guy,
            Sergei Shoigu “a servant to the tsar and a father to soldiers”
            https://www.france24.com/en/europe/20220304-shoigu-and-gerasimov-masters-of-putin-s-wa

            or that Valery Gerasimov bloke,

            “His international fame (Valery Gerasimov) is based on a misunderstanding. He is said to be the inventor of Russian “hybrid warfare”, which combines the use of conventional weapons with non-military methods – such as disinformation or cyberattacks – to prepare the ground for soldiers. There is even a “Gerasimov doctrine” named for this military approach.

            But the inventor of this term, Mark Galeotti, a British expert of Russian military issues, has repeatedly tried to correct the record. He emphasises that there is no such official doctrine in Russia and that Gerasimov is not a war theorist.

            The misunderstanding stems from a speech Gerasimov gave in 2013, in which he said the “border between war and peace had become increasingly blurred” and that “non-military means of achieving strategic goals had gained in importance”.

            The speech seemed prophetic to observers following the annexation of Crimea, where such unconventional means (pro-Russian propaganda, false-flag operations to justify wartime goals) were used.

            According to the “Financial Times”, the “Gerasimov doctrine” gained traction and the speech of the chief of staff was studied very closely in Washington. But Gerasimov’s analysis “did not describe how the Russian army should act, but how he thought the West operated”, Ruslan Pukhov, director of the Russian Centre for the Analysis of Strategies and Technologies, told the paper.

            Gerasimov thought hybrid war was what the US had used to foment the Arab Spring uprisings and that Washington was trying to use it against Moscow.

            “Unfortunately, like a creature in a horror movie, this idea of a ‘hybrid warfare’ doctrine has taken hold in Washington analyst circles. There have been entire theories in which the ‘Gerasimov doctrine’ is a central piece of ‘chaos theory’ of political warfare against the West,” wrote Michael Kofman, one of the leading US specialists on the Russian army.

            As Galeotti wrote, Gerasimov and his mythical doctrine embodied the return of the Russian military villain, “even though he probably didn’t even write the damn speech himself”. ”

            It doesn’t take much confusion for a limited Nuclear exchange to turn into a major one.

  12. NSW has begun subsidising utility bills for consumers.

    this is a terrible idea. Such bill subsidies are essentially recycling the wider tax base as a war-profiteering subsidy for the gas cartel.

    Unless foreign “students” are excluded.

    • ErmingtonPlumbingMEMBER

      It’s grounds for market failure so I’d like to vote for Nationalisation of our Gas extraction and distribution.
      Where can I place my vote to have that happen?

      • Nationalise it and ban LNG exports.

        Some Democrats in Congress have likewise urged the Biden administration to limit LNG exports in response to high natural gas prices and climate concerns.

  13. Fishing72MEMBER

    And that’s why I subscribe to MB.

    Not just for the fact they keep myself informed but that they provide initial pressure to address issues such as the above mentioned sh1tfight.

    Well done and much appreciated. Without wanting to gush too hard or overplay it , I genuinely believe you are doing your nation and country folk a great service.

  14. …a spectacular LNP revival and one-term Albanese catastrophe for Labor
    Ah, of course, who could resist Dutto’s charm!
    What’s far more likely to happen is a grand-coalition between the centre-right ALP and far-right LNP
    with an unassailable primary support of ~55% maintaining the status quo in the foreseeable future.

    • ErmingtonPlumbingMEMBER

      I found an offhand comment on the “talking pictures” segment of Insiders funny last Sunday.
      They said that until cartoonist stop colouring Dutton a pasty grey to cold blue in their caricatures and colouring him a more humane Pinky beige then the LNP don’t have a chance with him as leader.
      I loled

    • bolstroodMEMBER

      I think that is where we are heading a LIB / LAB coalition without the Nats. as you say , ‘55% percent majority ”
      Both sponsored by the Fossil Fuel Industry.
      It would not last past 2 election cycles , but that is enough for the FFI to squeeze the last profits out of Coal and Gas.

  15. If only we had a govt with the cajones to introduce a super profits tax – to divert windfall gains to stressed households and businesses, and a Carbon price mechanism to fast-track investment in renewables. Oh wait…..thanks 3D1K!

  16. I just called my nat gas supplier here in Perth and my daily connection fee and cost per unit just dropped by about 20%… and I didn’t even ask! Good times in the West, its great having a domgas reservation policy in place

  17. I think our pro-market governments are afraid to execute the reservation mechanisms, new or existing.

    The politico-market key (and justification) to implementing reservations is to understand that the current events aren’t really market events: they are event markets caused by the market regulators themselves, the governments – that is, Covid restrictions and lockdowns (though justified) and war.

    It’s therefore justifiable for governments to intervene in various fashions to ‘correct’ government-precipitated events such as these. Just invoke similar notions, and get on with it, then let markets function from there, much more healthily.

    My 2c

  18. I’m sure Labor already has sufficient political capital to implement ADGSM. How many voters/consumers will complain about lower utility bills? Effectively zero.
    The real challenge is whether the Labor economic team has thrown off the market-knows-best shackles of orthodoxy. Plenty of positives for Treasury (tax revenue) and Finance with budget bottom line as well. Do it.

    • If they can’t do it on $ alone and inflation dampener then Chalmers will reallly have earnt the name Dim Chalmers one gave him months ago

  19. So good thing we sent those Bushmasters to try and prolong the Ukraine war rather than promote a diplomatic solution, which should have happened back in 2014-15?
    BTW, latest images on Telegram show them reduced to bombed out scrap.

    Hitchens on the money here.
    https://www.youtube.com/watch?v=La-lxK4_JQw