In the first days of the election campaign, an aspirant Albo was caught out by a cunning journo who asked him to name key economic data:
At the time, much of the media rallied to Albo’s defense because everybody hated Scott Morrison. In retrospect, it is starting to look like Albo’s blundering was an insight into the man’s mind and priorities.
Labor keeps telling us energy is a crisis yet it keeps doing nothing about it. Friday’s Energy Minister palavering produced a grand total of nothing:
Ministers expressed concern that elevated international coal and gas prices, caused by Russia’s invasion of Ukraine, continue to drive unacceptable increases in electricity and gas prices in east coast energy markets, affecting millions of Australians, businesses and contributing to inflationary pressures across the broader economy. Energy Ministers committed to consider all options to take strong action as a matter of urgency to bring down power prices for Australian households and businesses.
Ministers agreed that this crisis makes the energy transformation even more important. A transition to renewable energy not only reduces emissions but also increases our resilience and protects consumers from such global price shocks.
So, it’s a crisis with a solution taking 30 years? What nonsense.
But wait, there’s less:
“I genuinely don’t want to limit our options or narrow them down excessively,” Chalmers says on ABC’s Insiders when asked how it might seek to tackle high energy prices. “I said that regulation for us in the near term is a bigger priority than using the budget to deal with this substantial challenge and the code of conduct is a good place to start.”
“We are contemplating the kinds of steps that perhaps governments wouldn’t have contemplated a year or two ago and I think that’s important.”
…”There’s a code of conduct that applies to this industry and we have said that we will work to make that code of conduct mandatory,” he said on ABC Insiders.
When asked if a price cap will be part of the mandatory code of conduct, Mr Chalmers said: “that’s something that we are considering”.
Mr Chalmers said he would not “put a date” on when Australians could expect to see solutions and a halt to rising energy prices.
The Code of Conduct is the very definition of nothing. Especially one with no deadline. But wait, there’s even less:
“Treasury has been commissioned by my predecessor and by his predecessor to do some of this work around the taxing point in the PRRT.”
“There’s been a couple of reviews. The second one hasn’t finished yet. The Treasury has restarted that work.
“I will obviously take their recommendations really seriously. We do want to make sure Australians get a good return for their resources. We need to balance that against the investment that’s been made into the sector. When I get that advice from I will engage in it a meaningful way and I will listen to it.”
And less:
“State and territory ministers agreed today together with me that we will not stand by and watch this flow through to the Australian people without taking action,” Mr Bowen said after a ministerial meeting in Melbourne on Friday.
…Ms D’Ambrosio took aim at big gas producers, saying they were making “obscene profits” in the current energy crisis.
“We know that the cost of gas production, the actual cost to make gas to bring it to market, has not increased, yet gas producers have doubled the cost of it, of selling it to consumers,” she said.
And? As nothing is done, the price shock is already flowing seamlessly “through to the Australian people“:
Average wage earners will be $5000 a year worse off – and mortgage holders up to $13,000 a year out of pocket – as a combination of surging inflation and rising interest rates eat into household budgets.
Anthony Albanese on Friday reaffirmed his promise to “get wages moving again”, but Jarden chief economist Carlos Cacho warned an invisible inflation tax could see real pay continuing to slide until 2024. “Middle Australia is feeling the pain,” Mr Cacho said.
…Taken together, the $5000 hit in real wages and a $7800 increase in mortgage repayments driven by rising interest rates would reduce the purchasing power of the median income household from $90,792 to $77,998 – a drop of about 14 per cent.
Let’s not forget the 20-30% crash in wealth from tumbling asset prices, either.
In short, Albo’s Labor will wipe out twenty years of economic gains in two years with their mass immigration obsession and energy cowardice. Half of this is already locked in and all of it will be in short order:
Believe it or not, this is a conservative analysis. Electricity futures are at least 50% higher than Budget projections for 2023:
Which comes with a massive second blow to Albo’s head:
Australian Energy Regulator chair Clare Savage told a meeting of energy ministers on Friday that any gas and coal cap would need to be implemented within weeks.
Ms Savage told the ministers that coal generators and gas users were starting to purchase their contracts for the next 12 months on the expectation prices would surge next year.
As the government has cowered in fear of the miners, even the plodding doyens of the Canberra bubble are onto it at last. Paul Kelly:
Events have upended the assumptions on which Anthony Albanese campaigned and won office just five months ago. Labor’s destiny now is to confront a complex economic challenge that suggests one of two scenarios – either this will become a great Labor reforming government or it will fail.
…The Prime Minister must reinvent his government for challenges on a scale he never expected. It means a new political narrative. Blaming the Morrison government has hit the exhaustion point. After the Chalmers budget, Labor cannot duck responsibility for the condition of the country. Peter Dutton has got a rich script to weaponise against Labor.
…Acting to limit gas prices, not just expand supply, is fraught with risk but the slogan that renewables “are the cheapest form of energy” is worthless before this problem. Without action Labor risks having its credibility ruined given its $275 energy price reduction campaign pledge has become Dutton’s weapon of choice.
And Peter Hartcher:
The Coalition knows it’s on a likely winner here. Its polling firm of choice, Crosby Textor, would be telling the Liberals the same thing it told its corporate clients this week. In summarising the hopes and fears of two Western Sydney focus groups that it convened on budget night, Crosby Textor reported to clients: “There remains significant goodwill towards the Albanese government and a sense that it is still too early to judge their economic performance.
“We expect that goodwill to remain largely intact after the budget as the fiscal repair measures are unlikely to be keenly felt by the community yet. But as interest rates continue to climb, electricity bills keep rising, infrastructure lags, and fiscal repair rhetoric meets reality – that goodwill cannot last forever.”
…What could it do? “The near-term shock is huge,” observes the former Treasury secretary and policy guru Ken Henry. “But it’s got nothing to do with Australia,” a direct result of the global shock created by Russia’s invasion of Ukraine. How to explain the problem and solution to Australians? “It’s our gas – Putin doesn’t have his arms around our gas,” Henry tells me. Therefore, it’s Australia’s to control.
…Henry also has a tip for the government when it encounters the inevitable screams of protest from the gas producers about “sovereign risk”.
“What is the precise sovereign risk that investors worry about? That whenever Russia invades Ukraine, prices go through the roof? They’re trying to beat an egg white into a blood souffle.”
Henry’s four options are domestic reservation, price caps, moral suasion, and an export levy. Of the four, domestic reservation won’t work without price caps so they are the same thing. Moral suasion has already failed. Export levies are the best option because they drop the local price and collect huge revenue. Combining price caps and super-profit taxes achieves the same end but is messy.
Otherwise, the phrases that Dutton will use in the election write themselves.
“You should not have trusted Labor with the economy”.
“Labor has wrecked the economy”.
“Labor still can’t manage money”.
So on and so forth. These lines will be trotted out to footage of Albo slurring over an unemployment rate that he can’t recall. Or an electricity price cut that he could have but refused to deliver.
Such an attack will work because it is true.
