We will all pay for coal, gas subsidies
ONE of the great gifts of Australian politics is watching a political issue take on a life of its own. What starts as tying a policy bow to solve a problem can quickly become an avalanche which takes out all and sundry.
Sometimes, it’s even beyond the creative realms of Yes, Minister. Here, I’m referring to the aftermath of the Albanese government’s move to cap coal and gas prices.
Sure, there are economic consequences, but there might also be political consequences for more than just the Labor party.
Much of this happened over the Christmas break, so you’re forgiven for being otherwise occupied eating leftovers, watching the cricket and sunning your guns at the beach.
Now, one of the long-standing progressive tropes is that the Liberal Party is terrible because they pay subsidies to fossil fuel companies, though no detail is ever given about what they actually mean by that.
To be frank, I have a longstanding gripe with subsidies as a matter of principle, regardless of who they are paid to and what for.
While the principal purpose of the government’s scheme was to cap prices on coal and gas, it also announced a $1.5 billion rebate on energy bills from April 2023 targeted at lower-income households and small business to offset part of the expected 63 per cent cumulative increase in energy costs over the next two years.
The bill was ultimately passed with support from the teals and the Greens, despite earlier objecting to
compensating producers. Except it appears the government does intend to compensate producers and this is where it gets a bit politically dicey for the self-anointed purists.
We got wind of this just after Christmas when it was reported that Queensland producers were expected to receive $450 million in compensation.
Climate 200-backed Senator David Pocock said he didn’t know about the proposed $450 million compensation prior to backing the bill. The next day Albanese said the compensation would be “nothing like” $450 million. The following day, Annastacia Palaszczuk waltzes in with a doozy confirming she knew of the $450 million ahead of the legislation being passed.
Then the new year brought news that NSW producers would be paid
approximately $500 million in compensation under the scheme with total compensation to be approximately $1.25 billion.
It appears that the Greens and teals have either willingly engaged in the most rampant hypocrisy known to modern Australian politics or they were not across the detail and got played like a fiddle.
Either way, it tilts their tiara when it comes to opposing all things fossil fuel related because they’ll be perceived to have done the unthinkable: subsidising fossil fuel companies.
North Sydney MP Kylea Tink said compensation shouldn’t be payable and that Australians would ultimately be paying for this through their taxes.
Senator Pocock referred to it as “perverse”. I agree with Ms Tink that
we will end up paying for all of this through our taxes, so let’s consider how we got here and do the maths on the cash.
Prior to the election, the Albanese opposition said 97 times that it would reduce energy costs by $275. But the incontrovertible fact is this: energy prices are not going down.
At best, prices will rise by less than is otherwise expected.
So, in an attempt to potentially take the tip off already increasing energy prices, the government is spending a total of $2.75 billion on rebates and compensation.
That’s a bloody big Band-Aid for so little economic and political return. All the while, the assemblage of teals and Greens hanging off this Labor government have been shown for the fools they are in propping up high-emotion, low-return politics.