What a rent-seeking dog the Business Council of Australia is:
The Business Council of Australia is urging Anthony Albanese to abandon aggressive intervention into the energy market amid warnings it will drive up energy prices and lower energy security in the long term.
In a new submission to the federal government’s consultation on its proposed mandatory code of conduct, the peak business group urged the government to immediately implement a formal trigger for the removal of the code as soon as practical and implement a long term gas strategy.
…Big business is concerned that Labor’s market intervention to impose a wholesale east coast cap on cas and a mandatory code of conduct governing market behaviour could stifle investment, put upward pressure on energy prices and risk energy security into the future.
If I were a BCA member in anything other than the gas sector I would be livid. This proposal is transparently insane.
The east coast gas market is not stifled by public interference. It is controlled, root and branch, by a foreign-owned, China beholden, cartel.
New supply will do nothing to change this dynamic. The cartel controls 90% of the reserves. We could dig it all up right now and there would still be a shortage because the cartel will not sell it. Or, it will sell it overseas.
Basically, what the BCA is proposing in unshackling the gas cartel is to drop an energy atomic bomb on the east coast economy via an inflation shock so large that it will make the Ukraine War look like Christmas.
This is already happening. There is a mandated $12Gj price cap in place (under which all gas reserved return huge margins) that the cartel is roundly ignoring:
Which is driving electricity prices mad, already at levels that will add 3-4% to inflation over a year:
This has nothing whatsoever to do with a lack of investment. The price caps have only been in place for five months. Foreign capital just bought cartel member, Origin, for a cool $18bn.
It has only one cause: the cartel is using economic coercion to get its way and every other BCA member will suffer immensely as a result.
Including a smashed financial system as house prices crater to “make room” for gas cartel gouging under the RBA 3% inflation target.
Contrary to the BCA’s utter lunacy, the only answer to economic coercion is greater coercion. The cartel must be broken to restore a functioning market.
Frankly, any and all options should be on the table to do it:
- massive export levies;
- use it lose it laws;
- huge fines for restraint of trade;
- tar and feather cartel executives;
- nationalisation.
Whatever it takes must be done to break the stranglehold of a gas cartel that threatens the very lifeblood of the economy upon which every other BCA member depends.
As for the BCA, its management should be summarily sacked and probably committed as well.
