MB’s own David Llewellyn-Smith gave an interview on ABC Radio (starts from 16.30) where he discussed the Albanese Government’s energy price caps and comprehensively destroyed the energy cartel.
Below are some key extracts:
“[The price caps] will flow through to lower electricity prices in due course, and energy futures markets are falling sharply”…
“We don’t have an energy market in Australia, in gas at least… What we have is a cartel – an export cartel that sits on 90% of reserves and for years has exported immense volumes of gas in part to manage the local price to profiteer. That all went into overdrive with the arrival of the Ukraine War when international prices all went a bit bonkers and gave them the cover to bring those prices back to Australia despite the fact that we bring this gas out of the ground down the road for some $3 [per gigajoule]”…
“They [the cartel] has been investing vigorously into $8 gas… $12 [price cap] is very generous. This is a high cap… They’ve actually been treated with kid gloves here. There were lots of people calling for $7 [cap], including myself. At $12 we’re talking 100% mark-ups, so they’re actually locking in huge profits. And it’s a small minority of the actual production… their exports are making an absolute motza, which is 80% of their production. This is where they have been left alone. They are not actually entitled to those profits. Those profits belong to the owners of the gas, which are Australians. And they never invested for them; they’re based on a war. That’s war profiteering”.
“So, the Albanese Government has been hands-off on that basis, and if the gas cartel pushes back too hard, it has the popular support to actually go after those windfall profits as well”…
“The counterfactual is that if this is not done, then the results are catastrophic, which is why the state governments have ultimately cooperated with the federal government”…
There is also a discussion on coal, which I encourage you to listen to.
Already Dave’s analysis has resonated with the punters, who have used his arguments to fight back against captured economists like Richard Holden:
Well done ABC for showcasing Dave. Now give me a shot on immigration (spoiler: it will never happen).
