Forget the $275 cut, worry about the lights

It’s just a wild guess, but I’m assuming that the 97 statements prime minister Albanese made through the election campaign, promising a $275 cut in all your electricity bills, are now, all of them – in the famous word of Nixon’s press secretary Ron Ziegler – “inoperative”.

As far as I can judge none of the trio who now own – and I mean capital-O capital-W capital-N, OWN – not just the gas and coal price-capping package, but the catastrophic wider and deeper energy future it will rush us towards, have actually said as much. Indeed, the now ‘inoperative’ nature of the promise certainly didn’t find its way into any of the press statements, issued by our leadership trio since last Friday. Maybe they still cling to the promise remaining, well, operative.

That after the average electricity bill soars anywhere between $800 and $1000 through 2023-24, oodles of ‘free’ electricity will then come pouring out of wind turbines and solar panels and deliver a magical $1075 to $1275 cut in 202425. So, ‘just in time’, we will get what’s needed to end up with an averaged $275 cut by the end of 2025, relative to electricity prices before the election.

In broad terms, of course; I can’t give you a more precise figure, as I lack Treasury’s fine grasp of utter statistical ineptitude and idiocy. Now, before the clearly utterly undeliverable promise – even if PM & Co won’t admit it’s now ‘inoperative’ – disappears into the political miasma, it is important to emphasise that it was made well after the Russian invasion of Ukraine. The invasion was in February, the election was of course in May, with the campaigning – and the promise stated 97 times, and probably counting – through April-May.

So, none of the trio could claim the government was ambushed by unforeseen left-field events in the gas and coal markets. If Russia’s responsible for soaring coal and gas prices in Australia and ultimately it’s not: we are – then it was all out there and visible well before the promise was made.

Furthermore, the promise does actually remain entirely deliverable, if the government wanted to keep it. It would simply need to write out a – true, JobKeeper-level gi-normous – cheque, to all electricity users. That is to say, everyone. That would of course also be an exercise of such fiscal vandalism and economic madness, it would finally top the 1974 Whitlam budget – which has stood for nearly half-a-century as the absolute and un-matchable, far less top-able, exercise in fiscal lunacy in our history.

Clearly the government is going to reject that option; it’s made that clear in the structure of the current package. But is what it is proposing really any better?

It started as a dangerous interference in the market – a merging, as I wrote yesterday, of short-term stupidity and long-term lunacy – and is now cascading into broader and really seriously dangerous energy chaos.

We now learn that the 12month price cap on gas will actually be permanent. That producers will have to offer gas at “reasonable” prices, and with such prices consistent with a mandatory code.

Further, free-basing, PM Albanese mused Tuesday that the government might actually move to a policy of gas confiscation.

He said “reservation” – forcing gas to be sold into the domestic market at those “reasonable” prices.

But if it walks like confiscation and quacks like confiscation, it is banana republic-style confiscation.

And it’s taken barely six months for the PM to get there. Indeed, if we adjust the time-frame for all the weeks our peripatetic PM has spent overseas, it’s really more like three months, ‘peripatetically adjusted’.

Woodside CEO Meg O’Neill, was restrained but devastating; actually suggesting, in print, that the policy could lead to the lights going out. In a fundamental sense, they already have.