Name-calling in the energy debate
One minute into his Monday news conference to warn the nation that the looming energy crisis would be much worse than previously thought, Malcolm Turnbull launched into Bill Shorten. Over the next 10 minutes, he called the opposition leader “Blackout Bill” three times. The recurring theme is that, because Shorten was a minister in the Gillard government, he is responsible for any gas shortfall. It is a transparent attempt at blame-shifting and a distraction from an inability to overcome divisions preventing Turnbull from landing a coherent energy policy.
Dragged into the name-calling is Labor’s shadow energy minister Mark Butler. The South Australian is now “Brownout Butler”. The children’s rhyme comes to mind: “Sticks and stones may break my bones but names will never hurt me.” The rhyme is wrong, of course: just ask any child who has been called nasty things. But in the supposedly grown-up world of politics, you wipe away the tears and get on with it.
Being called the “Mad Monk” didn’t stop Tony Abbott from a clear election win. The sarcastic “Honest John” didn’t stop John Howard from winning four terms. The name-calling reeks of desperation, especially coming from a prime minister leading a government into its fifth year of office.
The fact is, if electricity prices continue to skyrocket or if there are blackouts this summer, it will be the incumbents, state and federal, who will be held to account. Some Liberals worry that Turnbull has strayed too much into the states’ sphere of responsibility, making himself even more vulnerable to blame for anything that goes wrong.
Still, he presses on. The role of gas in power prices can slip below the radar. Turnbull says it’s the single biggest factor in current electricity prices: “For every dollar increase in gas per gigajoule is $10 per megawatt hours in the wholesale price of electricity.” In play is the law of supply and demand. Australia has plentiful gas, but exports most of it, leaving a domestic shortfall that pushes up prices well beyond global market prices. If we want to get into the blame game, it could go all the way back to the days of the Howard government in 1997, when export controls on gas were lifted. Howard did this to facilitate long-term gas contracts to China. It was hailed at the time, but is not looking so wonderful now.
Neither Shorten nor Butler were responsible for energy or resources in the Gillard government. Martin Ferguson was. His good mate across the aisle, Ian Macfarlane, Howard’s resources minister and now Queensland Resources Council chief executive, says they were both aware of the long-term threat to domestic gas supplies at the time. But if they were, there was no appetite for government intervention. LNG exports from the giant hub built at Gladstone in Queensland were like a sacred cow.
In the run-up to last year’s election, Turnbull and his energy minister, Josh Frydenberg, were still worshipping at the same altar. Frydenberg attacked Labor’s policy for a domestic gas reservation as a threat to exports. He called on the Labor Party to “reconsider its attack on the successful policies that have attracted over $400 billion in investment into Australia’s resources and energy industry, which has helped make Australia the largest exporter of LNG in the world by 2019-20”.
What a difference a year, and very ugly internal politics over energy policy, makes. In the whole discussion surrounding gas, the PM and his ministers kept going to the worst-case scenario. They painted a picture of Labor-governed Victoria running out of gas tomorrow, blithely ignoring that the state exports Bass Strait gas to Queensland. The Victorian budget allocated $42.5 million for research into gas reserves in preparation for when its moratorium is lifted in 2020. No one – who is not playing politics – is predicting the state will run out of gas before then.
It is completely disingenuous for Turnbull to accuse Labor of not heeding warnings eight years ago on how the intense export drive could affect domestic supply and prices. Those warnings were offset by assurances from the exporters that it would not happen. Hollow assurances as it turns out. Sound familiar? These same gas majors are giving similar undertakings to the Turnbull government. They have succeeded in staving off use of the Australian domestic gas security mechanism. Turnbull says he will meet again with the companies next week to hammer out a signed agreement. The force of it, just how much gas is involved, and what price guarantees there might be, is still to be detailed.
Butler says it’s not good enough. What is needed is the force of law. And that law would need to be triggered by acting resources minister Barnaby Joyce. Indeed, that seems to be the problem. In a revealing interview on Radio National’s RN Breakfast on Tuesday, Joyce had no doubts the gas companies would fiercely resist government impositions. He said, “the gas suppliers will use every mechanism at their disposal once it becomes overt, then they’re going to use everything at their disposal and try and fight you”.
He attempted to brush aside suggestions that doubts over his eligibility to be in parliament and to be a minister were in play. But it’s clear that if the companies did not like the domestic gas reservation being retrospectively applied by him, they could challenge his legitimacy in the High Court in light of section 64 of the constitution.
Joyce didn’t appear with Turnbull, Frydenberg and Treasurer Scott Morrison at the news conference held after Monday’s gas emergency meeting. He denies it was to avoid press questions about his status. He says Turnbull called it at short notice and he had a prior lunch commitment at the Tamworth Chamber of Commerce. He didn’t want to anger people who had paid to hear him. Labor says it’s because he is already pre-emptively campaigning in case the High Court strikes him out of parliament and he has to face a byelection.
Joyce is proving a trouble magnet for Turnbull. He is also battling conflict-of-interest claims over a half-million-dollar property in the vicinity of the Narrabri gas project. That project is being held up by state environmental assessments that have earned the ire of Joyce and Turnbull. Gas giant Santos, the stalled developer, also has exploration licences in the region, including around the Joyce property. Tony Windsor, who ran against the Nationals leader at the last election and is challenging his eligibility in the High Court, told Fairfax Media it was well known “there’d be gas under all that country”.
Joyce, along with Tony Abbott, is a powerful advocate for the coal lobby in the government party room and part of the problem rather than the solution for Turnbull landing on a credible energy policy. Already the ground is being laid for abandoning the 42 per cent clean energy target that chief scientist Alan Finkel modelled. Turnbull’s name-calling of Shorten is outdone by his stridency attacking Labor’s willingness to accept the target. He railed on Monday, “The Labor Party, its approach to energy, is not just a product of ideology – you know, left ideology – it is a product of complete idiocy and incompetence.”
Really? And that despite Turnbull having praised the Finkel report as “eminently doable” when he received it – before the environmental troglodytes in his own party attacked it. Incidentally, expert assessments collated by The Australia Institute have found that target to be well short of what is needed to achieve our Paris emissions reduction commitments. Turnbull says he is still up for these commitments.
The week began badly for the prime minister, with the 20th Newspoll in a row showing a deterioration in support for the government. The 54-46 per cent result would see 20 Coalition seats tumble. At his two gas news conferences, Turnbull didn’t get any questions about the result, which is inexorably getting closer to his 30 losing polls benchmark for leadership failure.
The poll came at the end of a week dominated by Abbott. He threatened to cross the floor over the Finkel clean energy target and last Friday had played an assault on him for all it was worth to attack the “Yes” campaign in the same-sex marriage postal survey. How a drunken yobbo wearing a “Yes” sticker is an argument against equality before the law for all Australians defies logic. The man involved denied any political motivation, beyond a deep dislike for Abbott.
There’s no doubt the survey is a proxy for the Abbott–Turnbull wars, a conflict that is certainly undermining the government’s credibility. There’s real anger in Turnbull’s office over the dumped prime minister’s calculated sniping. The fact is, Abbott’s mere presence in the parliament is enough to remind voters of the tension at the heart of the government. Name-calling opponents, as Newspoll demonstrates, can’t fix that.
This article was first published in the print edition of The Saturday Paper on September 30, 2017 as "Sticks and stones may break my bones but coal is still quite dirty".
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