On 30 April, less than a month before the election I penned this piece, about the foreshadowed spike in energy prices, about to hit Australian consumers: Coalition promises higher electricity costs!
I wrote it because it was quite clear that the Coalition were not going to come clean before the election and it was a known major factor that was going to hit Australian businesses and consumers as winter came on.
The prices for coal, gas and petroleum products are all being hit largely due to the Ukraine war, the sanctions placed on the Russians, profit gouging by OPEC and, in the domestic context, a complete malaise on energy policy over the ten years of Coalition rule.
Clearly, we can’t do much about the supply of petrol and diesel products as we are wholly reliant on offshore producers and refiners and OPEC have told the world that they will not be increasing production to ease the shortages. However, we could start by accelerating the transition to electric vehicles now that we know that the man, who said they wouldn’t tow your boat or get you and your family to your favourite camping spot, was lying.
In the meantime we still need petroleum products to get us through the transition.
Interestingly, Venezuela holds the planet’s largest reserves of untapped oil but that won’t help us as the US have sanctions on the Venezuelan government – evidently they don’t like President Nicolás Maduro. Another fun-fact: Iran holds the world’s fourth-largest oil reserves but their exports are also under US bans and sanctions for much the same reasons.
As regards coal and gas, we are major producers of both and we have the ability to reserve or hold back a portion of our production for domestic consumption at prices that are not determined by world market fluctuations. Something that is obviously necessary until we can break the grip of fossil fuels and replace them with price-stable renewable resources – Vladimir Putin does not control the supply of sunlight or wind although he may think he does.
In the UK the conservative government has imposed a twenty-five per cent ‘windfall profits tax’ on oil and gas companies. A windfall tax being a one-off tax imposed by a government on producers and suppliers who, through no effort on their part, were lucky enough to benefit from something they were not responsible for – in other words, a windfall profit.
Our gas and coal producers are also in the fortunate position of being recipients of these windfall profits due largely to geopolitical happenings in other parts of the world: the question is, should they reap these windfall profits and should we be funding them?
The former Coalition government knew that this supply and demand price crunch was coming, it’s been forecast for over twelve months, but they suppressed the release of information because it didn’t fit with their election narrative and apart from that they love to see ‘can do capitalism’ in action. From comments made by the new leader of the Coalition, they will now be using these price spikes to attack the new Labor government for incompetence in office even though, you will note, the new government were only installed a matter of days ago – that’s Voldemort for you.
You may recall that the Gillard government enacted The Minerals Resource Rent Tax (MRRT), a tax on profits generated from the mining of non-renewable resources in Australia. It was a replacement for the proposed Resource Super Profit Tax (RSPT). The tax, levied on 30% of the “super-profits” from gas production and the mining of iron ore and coal was introduced on 1 July 2012.
The Coalition, led by Tony Abbott, went to the 2010 and 2013 elections promising to repeal the tax. They considered the tax to be the actions of a socialist regime and when they won office at the 2013 election the tax was repealed. I wonder what they now think of Boris Johnson’s actions with his windfall profits tax which, is essentially the same thing?
Surely it is time that we had some coherent taxation laws governing the extraction and sale of our non-renewable resources until such time as we can put in place reliable renewable energy infrastructure, which will not be subject to geopolitical price manipulation. We need to ensure continuity of price-stable energy rather than pandering to the multi-national mining conglomerates.
I have a great deal more confidence that the new Albanese government will do this contrasted with the flashmob we have just cartwheeled out of office – don’t let us down, Albo!
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