Chicken Chalmers soothes on cost-of-living as gas cartel gouges
Following yesterday’s national accounts release, Treasurer Jim Chalmers warned that rising interest rates and cost-of-living pressures will dampen economic growth in coming months. He added that there is little scope for additional cost of living relief in the October budget on top of those that have already been announced, arguing that doing so would result in more aggressive interest rate rises:
The Treasurer said there was little capacity to fund any extra income support in the October 25 budget, beyond planned measures such as cheaper medicines and childcare. “The task in providing responsible cost-of-living support is to make sure that you can do it in a way that doesn’t put extra pressure on the Reserve Bank and risk being counter-productive,” he said.
“And so the cost of living relief that you will see in the October budget – childcare, medicines, electric vehicles, TAFE fees, and our efforts to get wages moving again in a sustainable way, strongly but sustainably – are all about easing the cost-of-living pressures on Australians, and dealing with some of the constraints that are in our economy and which are preventing the economy from growing at a greater capacity.”
Take a look at the next chart, which shows that East Coast gas users are paying some of the highest prices in the world, while Western Australians – which has a domestic reservation policy – are paying the lowest. Similar applies to electricity prices, where gas is the marginal price setter:
Dr Chalmer’s answer to the cost-of-living crisis is to ramp immigration to sink benign wage pressures while driving rents even higher.
Moreover, his government refuses to do anything about East Coast energy prices (gas and electricity), which will soon add a staggering 6% to the CPI over the next year or more. This will smash real incomes to smithereens.
The inaction on energy is especially egregious when one considers the risks.
The weekend news that Russia has now cut Nord Stream gas flows to Europe completely means international prices will take off again. As we know, one LNG export terminal has been idled in Australia for the past month for maintenance but resumed operations this week. These two developments mean the gas cartel will immediately pressure the local gas price higher again.
What looms as we move into summer and Europe into winter is another shock so severe that it will send East Coast energy prices into the stratosphere, sending cost of living and inflation soaring.
All of this is entirely avoidable with simple domestic reservation, export levies, or super profits taxes for the gas and coal export cartels. Heck, all the Albanese Government needs to do is copy Western Australia. Yet they continue to fiddle while Eastern Australian energy users burn.
Meet new Labor: the protectors of capital and the enemies of working Australians.
