Evil gas cartel feminises the subject

What is wrong with everybody? Canberra need not have any inflation problem. It could be cutting interest rates. It could be rescuing real incomes from an historic shock.

All we need to do is break the gas and coal export cartels which are going to be by far the major contributor to the CPI in the next year.

Australian energy prices should be falling as we enter Spring. But they are not. The relief experienced over the last month derived from the closure for maintenance of one of the six LNG export trains in QLD. It is now reopened and the gas price is climbing again, striking a new high of $25Gj across the east coast on the weekend. Electricity prices will follow in due course.

This will add 3.5% to the CPI over the next year and 6% over two. This is the vast bulk of Australia’s inflation challenge.

Instead, RBA captain Phil Lowe went to Parliament and ignored the issue. This is as close as he got:

In contrast, the second change since February – the increase in inflation – is an unwelcome one. When the previous Committee met in February, underlying inflation in Australia had just reached the midpoint of the 2 to 3 per cent target range for the first time in many years.

Seven months on, we are in a very different position. Inflation has very quickly gone from being too low, to being too high. Over the year to June, the headline inflation rate was 6.1 per cent. It is expected to increase further over the months ahead to peak at around 7¾ per cent later this year. Inflation is then expected to start declining, to be back around 3 per cent late in 2024.

Global factors explain much of this increase in inflation. Russia’s invasion of Ukraine resulted in major disruptions to energy markets, increasing retail energy prices around the world. And COVID-related interruptions to global production are still rippling through global supply chains, pushing prices up. The demand for goods in global markets has also been very strong over the past few years as people switched their spending from services to goods. The result of impaired supply and strong demand has been higher prices around the world.

And this:

In his central banker way, Lowe noted problems in the regulation of the energy system. “[We] probably haven’t nailed that,” he said deadpan.

And then added this:

The RBA boss also told the committee in Canberra that the persistent federal budget deficit was a “significant issue” that needed addressing this term of Parliament to afford the extra spending the community expected on disability support, aged care, defence, health and infrastructure.

“What we haven’t worked out as a community is how to pay for it,” he said.

“And this is why we kind of got these budget deficits despite full employment and the record terms of trade.”

We have worked it out. The evil gas cartel lied about having enough gas when it built its export plants. It has no right to gouge the local market, nor to profiteer from global wartime prices.

The Albanese Government is shockingly delinquent in so far failing to impose a fixed-price domestic reservation regime or an export levy on the coal and gas export cartels benchmarked to pre-Ukraine prices. This would add scores of trillions of dollars to the budget even as it crashes the local price of the same commodities and wipes out inflation.

After all, what good are record terms of trade if:

• real incomes are smashed;
• there is a disproportionately small rise in the tax take, and;
• household wealth is demolished simply to make room for war-profiteering by foreign energy cartels?

Global high gas and coal prices are not going away. Ahead is more Putin economic war and the European winter. The export cartels will keep pressing local prices higher. All Australians east of WA will keep getting poorer at astonishing speed.

Where is the fiscal policy response? Where is the Coalition? Where are the Teals? Where is the media?

Oh, here they are, at the AFR and The Australian, visiting the new head of the evil gas cartel lobby:

Strangling Australia’s gas industry beneath a wave of activist policy intervention will not only slam domestic households and businesses but hamper the decarbonisation efforts of allies across the Asia-Pacific region, says the new head of the nation’s peak petroleum industry body.

In her first interview since taking up the reins a month ago as chief executive officer of the Australian Petroleum Production and Exploration Association, Samantha McCulloch hit back at suggestions the industry is running out of friends, citing support from the Prime Minister and communities directly benefiting from its investment, such as Dalby in Queensland.

“The reality that we face in Australia and globally now means that we actually do need new supply, new investment in gas, and this will play a fundamental role in supporting emissions reductions,” she told The Australian Financial Review at APPEA’s Canberra HQ.

Allow me to mansplain to you, young lady, why your sector is out of friends (except at the AFR and with Albo’s cowards). The east coast gas cartel:

• lied about its reserves when it build the Curtis Island plants;
• siphoned off third-party gas ever since and gouged Australia mercilessly on price;
• is now war-profiteering to boot;
• sends 71% of east coast gas to China while pretending it is supporting Australian allies;
• bribes, bullies, lies to, and captures government;
• undermined and trashed the NSW Chief Scientist’s guidance on safe Narrabri extraction;
• has failed to develop CCUS completely on cost and project delivery.

Neither Australia nor the world needs more of the east gas cartel. Not do we need a pretty young face covering up the bloody war-profiteering, massively regressive class warfare, treason, and the greatest theft of a national resource in global history.

What we do need is a price trigger in the ADGSM or, even better, a pre-Ukraine war price benchmarked export levy. If you can make CCS work then great but so far it has been a complete failure.

Doubtless, the gormless ABC will love you.