Albo’s cowards grovel as China destroys Aussie economy


Albo’s cowards would have you think that they are not taking a backward step on China in terms of Australian national interest. Here is Foreign Minister Penny Wong as she groveled her way to a meeting with her Chinese counterpart:

“We believe it’s in the interests of both countries for the relationship to be stabilised. I look forward to an open discussion with my counterpart,”

“It’ll be an important opportunity to engage on bilateral issues … we all know we have our differences, there are challenges in the relationship.”

“We’re clear, we won’t be making any concessions when it comes to Australia’s national interests.”

“You would anticipate that there are a number of issues raised … We will do so diplomatically and directly.”

Sadly, nothing could be further from the truth. While Albo’s cowards are busy distracting Aussies over a few banned lobsters from WA, China is busy crashing the entire economy east of that state via the wholesale plundering of Australian gas resources.

Here is the Gladstone Port LNG shipments total for the FY21/22. China took 71% of eastern gas exports:


Chinese state-owned enterprises, CNOOC and Sinopec, are equity partners in two of three LNG export facilities, making them card-carrying members of the east coast gas export cartel.

The consequences of this are plain to see. Since the Ukraine war began, this cartel has been war-profiteering to the tune of a 900% rise in prices. The only reason it’s not a lot higher is the price has been capped by AEMO at $40Gj (traditionally $4Gj) but even that is slipping higher:


Because gas sets the marginal cost of electricity in the NEM, this has delivered an immense electricity price shock of around 600%. This has also forced the regulator to suspend the NEM:


Every single household and business east of WA is now subsidising the foreign-0wned, tax-free, China-beholden gas cartel to the tune of $50bn in annualised energy costs. This is flowing directly into inflation by adding a 3-5% to the CPI over the next year and more. As the RBA reacts, this will obviously crash house prices more than otherwise. Who knows by how much? $1 trillion, $2 trillion? Just pick a very large number.

Let me put it this way. The Aussie economy derives income by selling dirt to the world (and mostly China). Our banks leverage that income in global markets and use it to inflate house prices. This supports demand growth in the vast services sectors that have no endogenous investment driver.

If you reverse this mechanism and pay the world (mostly China) to take our dirt. Then the banks are able to borrow less from the world and at higher interest rates. This deflates house prices and the demand for services falls because they have no endogenous investment driver.


So long as you allow this to go on then the affected areas of the Aussie economy will shrink.

In short, Albo’s cowards are currently supporting the absolute trashing of Australian standards of living by China so that we can “reset” relations and be friends:

Sky News Political Editor Andrew Clennell says we have certainly seen some “interesting re-engagement” between the Australian and Chinese governments since Labor won the federal election in May.

“Richard Marles secured a meeting with the Defence Minister of China, Labor’s national secretary Paul Erickson met the Chinese Ambassador, as did the former prime minister Paul Keating,” he said.


I didn’t think it was possible for Canberra to sink lower than serial sexual assaults in parliament. But if Albo’s cowards do not apply super profits taxes, export levies or domestic reservation to end the war-profiteering of a Chinese-sponsored gas cartel then the rape of every household and business budget east of WA qualifies.

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.