The Poms are doing the right thing:
Businesses have been given an emergency package of government support including a cap significantly reducing the price paid for energy from 1 October to help them get through the winter.
The UK government has stepped in to discount wholesale power prices for companies, charities and public sector organisations, including schools.
Under the plan, they will be given support for six months to protect them from soaring bills. Further help will be offered to companies in vulnerable industries after that.
When announcing her energy support package for households earlier this month, Liz Truss said the government would also “launch a new scheme for all non-domestic customers”.
The price caps will be funded by temporarily lifting green subsidies. The irony of this is that the UK has little in the way of indigenous fuels but they are doing it anyway.
Meanwhile, in the land of super-cheap and abundant energy, Treasurer Jim “Chicken” Chalmers is refusing to lower the Australian gas price with domestic reservation or an export levy despite the price still being at crazy highs around $25Gj.
Even though it is dug up for $1Gj up the road.
Even though, as a direct result, power prices are up 200%.
Even though 71% of the gas is going to China which does not even need it.
Even though, this will add 2.5% to the CPI over the next year and more like 4% over two:
Alas, instead of a fighter for a treasurer, we have a coward. Today he dives under the doona while trying to drag everybody there with him. He writes at The Australian:
The economies of the US and Britain are in reverse; China’s has slowed markedly; and the war in Ukraine sparked an energy crisis that shows no signs of abating. This is why the International Monetary Fund won’t rule out another global recession.
…Our challenges are primarily, though not exclusively, global, but a wasted decade of missed opportunities and warped priorities has made us more vulnerable to these shocks. This is the hefty price Australians are paying in the form of wage stagnation, flatlining living standards, weak business investment, poor productivity and now skills shortages too.
So our task is to make the budget, our economy, our people and communities more resilient.
That means focusing on areas where our policies and sensible investments can make a meaningful and realistic difference without making life harder for the independent Reserve Bank.
It means responsible cost-of-living relief; investing in our people, their skills and their future; and beginning the hard task of longer-term budget repair.
It means trying to deal with the issues in our clogged supply chains that are forcing up inflation, and providing relief from rising prices that delivers for the economy and doesn’t force the RBA’s hand on further rate rises.
It means getting wages growing by training people for higher-wage opportunities; childcare changes to make it easier to earn more; and supporting pay rises in the care economy.
We know it’s unusual to hand down a second budget this year, but this is a new government and these are unusual circumstances. It made no sense to us to wait 13 months between budgets when the tasks are so urgent, the challenges so confronting and the needs so substantial.
Chicken Chalmers’ failure to address the energy cartels makes all of the above one big lie:
- We are less resilient by the day as real incomes are smashed and trillions in wealth is transferred from households to foreign energy cartels.
- Manufacturing is being destroyed leaving us more reliant upon China.
- Reined energy cartels would end Australian inflation and rising costs, end rate hikes, and restore economic growth, all with the stroke of a pen.
- Real wage growth would resume more or less instantly.
In this context, Chicken Chalmers’ article is one long excuse for doing nothing because:
A Labor source said Dr Chalmers was still “scarred” from the failed “super profits” mining tax in 2010 when he was a senior adviser to then treasurer Wayne Swan, and that he did not want to revisit the idea.
If the budget contains no new measures to crush gas and coal prices then Chicken Chalmers will have failed more materially within six months of taking office than any treasurer since Jim Scullin and The Great Depression.
Perhaps we should put this bloke in charge of Treasury:
Tiwi Islanders have won a landmark case against drilling for gas by Santos in their traditional waters after complaining that the company failed to consult them about the impact of the project.
On Wednesday, judge Mordecai Bromberg set aside approval for the drilling, part of Santos’s $4.7bn Barossa project and gave Santos two weeks to shut down and remove its rig from the sea north of Melville Island.
He said the offshore oil and gas regulator Nopsema failed to assess whether Santos had consulted with everyone affected by the proposed drilling, as required by the law.
The case was brought by Dennis Tipakalippa, a senior lawman of the Munipi clan, the traditional owners of the northern Tiwi Islands.
That’s how easy it is. Energy cartels are just people masquerading as an objective force. Punch them in the face with policy and all of their plans to gouge Australia will evaporate.
And so will most of the economic dangers Chicken Chalmers is terrified of.
