The collapse of the National Electricity Market continues today, remarkable for both its causes and the total lack of reporting about it.
NEM prices were only up 900% yesterday. You beauty!
Is anybody doing anything to fix it? Nope. This means a 100% utility bill shock for all households and businesses east of WA, 3-5% added to the CPI over the next year and more, plus much higher interest rates and much lower house prices than the counterfactual.
This is why all of our commodity customers can see what is coming even if Albo’s cowards cannot:
Japan, India and Germany have warned that the global energy crisis is worsening and have called on Australia to step up with replacement supplies as fears grow that big-consuming nations face a harsher crunch ending their dependency on Russian fossil fuels.
Thanks to Albo’s cowards rushing off to support everybody other than Australians, the government is increasingly boxed-in in terms of moving to protect locals from the Ukraine war energy shock.
How can Albo tour Ukraine one day and then cut Germany off Aussie gas and coal the next? The moral suasion is deliberate and, given the timorousness of Albo’s cowards, effective.
This does not mean that the problem is not fixable. It means that Albo’s options are being rapidly cut down.
The politically easiest answer to lower local prices was domestic reservation for gas and coal, given it would do little harm to mining profits. Reserving 5% of volumes for home use may have even lifted export profits as global prices reacted.
But that option implicitly entails reducing export volumes to allies. Unless China is specifically targeted, which Albo’s cowards clearly do not want to do as they aim for a kowtowing “reset”.
That leaves Albo’s cowards with only two alternatives to prevent economic wipeout.
The first is to apply export levies to the gas and coal export cartels. This is a great idea. If benchmarked to pre-Ukraine coal and gas prices – $8Gj and $100 a tonne – then local prices will crash. As well, all war profits above these levels will instead go to the Australian Treasury in a tidal wave of revenue. It is, equally, a huge political winner, clearly illustrating the Albanese Government’s national interest credentials.
The second option is much more clunky but achieves the same end. Super-profits taxes that are recycled as energy subsidies.
But note. Both of these options entail wiping out mining war profits and will trigger a battle with Big Dirt unseen on the home front since the Rudd Government RSPT debacle. The darkest fear that stalks Albo’s cowards in the dead of night.
By failing to act decisively, Albo’s cowards are rapidly limiting their options and 25m Australians are about to get very pissed off.
