There’s a strong incentive for both the government and the opposition to work out a solution on energy policy, and it’s the same incentive that Tony Abbott has to campaign hard against it. Consumers face a wave of big power price increases in coming months — partly due to the lack of investment in energy capacity, but partly also because power companies, including government-owned companies, have been gaming a wholly inadequate regulatory system and the hapless regulators supposedly overseeing it. Power companies stand to make a killing at a time when consumers have endured two years of stagnant wages and, more recently, declining real wages.
It’s another potent demonstration that the economy isn’t working for average consumers, but instead helping corporations, who benefit from declining wages and the ability to gouge consumers for what people see as a basic utility.
This is the biggest problem the major political parties face currently: a deep anger within the electorate that corporations are winning and they’re losing, that companies can do what they like but the average worker is stuck without a pay rise as power bills go up by hundreds of dollars — a they’ve been doing for years now.
Meanwhile, we’ve done zip about climate change, so there hasn’t even been an external benefit for thousands of dollars more we’ve all paid to keep the lights on over the last decade.
Don’t underestimate how toxic this is. Any politician promising business as usual will get short shrift. And politicians promising policies that would have been laughed off the agenda even last year are suddenly seeing their ideas embraced.
Just ask the Greens, who’ve been pushing a bank tax for years.
So the major parties have to get this right — the government, in particular, given it came into office claiming that repealing the carbon price would lead to cuts in power prices. But if Labor — even though it has been quicker to respond to the electoral mood — is seen as standing in the way, it will earn the wrath of voters. It’s not just for altruism that Bill Shorten has extended the hand of bipartisanship on a Clean Energy Target.
And while Tony Abbott’s socialist coal fetish means, inevitably, even higher costs than under either an emissions intensity scheme or a low/clean energy target, the resentment about rising power prices offers a rich vein of discontent for him to exploit — especially if his goal is simply to get rid of Turnbull, rather than restore himself to the prime ministership. The latter would entail offering a coherent policy, something that has long proved difficult for a man whose strength is very much in tearing down what others put forward.
While the energy policy debacle of recent years is primarily the result of the actions of a group of denialists within the Liberal Party, the entire political class (including pro-market Canberra commentators like me) bears responsibility for an energy market that has become badly dysfunctional. Voter tolerance for unreliable, expensive power would be limited at the best of times. When business has been pushing down wages growth for years, it becomes a political powder keg that politicians need to prevent from reaching ignition point.