*Published in the West Australian, 17 December 2022
It’s economics 101. If you want to lower the price of goods or services, you increase supply higher than the demand from consumers. It’s an economic principal that even high school students can appreciate.
Labor’s Energy Relief Price Plan has left many scratching their heads as to how exactly this legislation will lower energy prices. The Bill only passed yesterday and already industry is ceasing talks about new investments that would have seen an increase in our domestic supply of gas.
During these uncertain times it is crucial that we keep all of our energy options on the table, old and new, to ensure we can keep power prices down and firm up our sovereign capabilities.
Labor, on the other hand, are hellbent on scrapping any form of energy that isn’t generated by renewables. This is ideology over sensible policy and Australians will be the ones to pay from this colossal misstep.
Renewable energy plays an important part in our energy mix, and I look forward to seeing it play an increasingly more important role as the technology matures. But until then, limiting our supply in gas or coal will only hurt already struggling Australians by driving up the cost of energy.
Further to hindering future investment in gas, Labor’s Energy Relief Price Plan is just bad policy. Plain and simple. It leaves more questions than it provides answers. Closer to home, the McGowan Government will need coal from Newcastle to keep our lights on over the summer period. Another failure in energy policy.
Here in Western Australia, we are still unsure as to whether the gas cap or the targeted cost of living relief will even apply to us. The PM himself said at a press conference last week that WA’s share of the $1.5 billion relief package will be different from other states, given our domestic gas reservation policy.
We don’t know who will receive assistance, how much they will receive and through what mechanism they will receive it. With National Cabinet not set to make a decision on the relief package share until next March, it is clear that Labor have no answers for Western Australians as to how they will help them get through this difficult period.
What we do know is that Western Australian families are struggling with the rising cost-of-living NOW. Labor have promised us that we’ll be $230 better off on our electricity bills because of this legislation, but why should they be believed? They’ve already broken one election promise when they sold the Australian people on the idea that under Labor they would be $275 better off on their electricity bills.
As for the gas cap? It is not clear as to whether WA will be included as a ‘target market’ as set out by the legislation. The consultation paper on the Treasury website says the Western Australian gas market will be excluded from the price cap. Yet, there are two clauses of the primary legislation that directly conflict with each other which puts this claim into doubt.
Even if WA is excluded from the price cap, this brings about the possibility of constitutional challenges that may lead to legal action against the government. This is just messy.
If the process around the bill hadn’t been a chaotic mess from start to finish, and if Labor had actually taken the time to consult with industry and key stakeholders, these issues may have been worked through BEFORE passing through Parliament.
Instead, we are now left scrambling to figure out exactly how this legislation will provide relief and drive down the cost of electricity without destroying new investment in our domestic gas supply.
It is clear that Labor have really cooked the books on this one. I can assure you it wasn’t using gas.