It is almost incomprehensible to the average voter. Given the very significant increase in power prices in recent years, to the considerable detriment of households and businesses, large and small, it is extremely hard to understand why the Government and Opposition simply haven’t got together to “fix it” in our national interest.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
Indeed, it is particularly hard to understand how our political leaders can so easily ignore the wishes of voters, and for so long now. Almost every survey or poll has recorded the significance of “cost of living “ issues in general, and power prices in particular.
Moreover, there is widespread support for a significant and urgent response to the challenge of climate change, with majority support for a managed transition to renewables over time.
Yet, our politicians are consumed, and self-absorbed, by playing their own short-term, political games, scoring points on each other, and attempting to shift the blame to the other side, rather than solving the problem – the so called “climate wars” of the last 10-15 years.
The significant increases in power prices are the direct result of bad politics and bad policy. Governments encouraged the “gold plating” of the power distribution network, a major direct influence on the cost of electricity.
They encouraged the development of the offshore gas industry, without adequate reservation for the domestic market, and some state governments have banned or constrained further on shore gas exploration and development.
They have also allowed power generators to also be retailers, leaving them free to ”gouge” both the wholesale and retail markets.
In terms of overall policy development, the focus has been on attempting to “patch up” the old National Electricity Market (NEM), originally developed as a copy of the UK system that they have since jettisoned, rather than start with a blank sheet of paper to design a new system to meet our specific requirements.
In terms of emissions reductions, we finally agreed to the modest objective of 26-28% reduction by 2030 under the Paris Agreement but, in terms of the policy to achieve this we have drifted through a number of alternatives – from an emissions trading scheme, to an emissions intensity scheme, to the Finkel Clean Energy Target, to now the National Electricity Guarantee (NEG).
Unfortunately, while the NEG is the “fourth best” policy response to achieve lower priced and reliable power, and meet our Paris commitments, it is appalling that our pollies are still at it, still scoring points on each other, both within the Government, and between the Government and the rest – Turnbull v the Abbott “rump”, LNP v Labor, State v Federal, Extreme Greens, and so on, almost incessantly.
What is even more disturbing is that this point scoring is riddled with misrepresentation, exaggeration, false claims, basically “fake news”, all leading to mass confusion in the media (where some too are running an agenda), among households and businesses. Basically, voters are just being “ripped off”, and they know it, and will vote accordingly in the future.
The outcome is a national tragedy. As a country with enviable, world-class, natural endowments of sun and wind, and the Australian technologies to convert this to electricity at the world’s lowest costs, as well as to store the power to ensure its cost effective distribution, the lack of leadership and effective policy has really cost us in terms of lost economic growth, by losing billions of dollars of investment, and hundreds of thousands of jobs.
Businesses in major industries that were built on cheap power are now becoming non-viable – for example, those built when the gas price was $3-4 per gigajoule, are now facing prices at least three times that. Similar disadvantage is evident in those reliant on electricity.
Households are struggling to meet the daily costs of living, in many cases running down their savings, and running up their debts. Our household debt is now the highest in the world, nearly 200% of disposable income, and 120% of GDP – real “cost of living stress”.
Yet our pollies offer no effective, near-term, solutions – just promises of lower power costs over the next decade or so.
More disturbing, they are just really kicking the energy/climate challenge “down the road” for our kids to live with, and try to solve.