This week, the need for the new Albanese government to fix the mess it has inherited became personal for millions of Australians at the mercy of a failed energy market. The threat of blackouts and of freezing in their homes in the middle of one of the worst winter cold snaps for years brought with it an unexpected urgency. Senior ministers are well aware that any gratitude the nation may have at being under new management would be scant consolation.
How an energy rich nation exporting billions of dollars’ worth of coal and gas can be left short with no guarantees of assured supply for the domestic market is, in political terms, criminal. We now have a crisis, which this week pushed the national regulator to take the unprecedented step of suspending the wholesale electricity market. It has been building for years – the previous federal Labor government can share the blame for not insisting on a reservation policy for gas producers as they began exploiting our vast resources. But that short-sightedness and craven indulgence of these multinational giants was more than a decade ago – and it has only worsened under the Coalition government that was in charge for the past nine years.
The prime minister identified the failure of energy policy as one of the main reasons we have a change of government. The same vested interests that drove the climate wars and held the Coalition government in their thrall have been exposed as culpable for the present parlous situation.
South Australia’s new premier, Peter Malinauskas, says the privatised energy companies are acting “rationally”. They are looking after their own bottom line, gaming the poorly designed system to enhance their profits. This, after all, is their duty to shareholders. Of course, it is also the very flaw at the heart of the privatisation of essential utilities.
Here we are, and wishing otherwise is no answer. It takes a certain chutzpah for Opposition Leader Peter Dutton to attack Energy Minister Chris Bowen for having “trainer wheels on” and flailing around. It’s a clear misrepresentation of the facts and some of Dutton’s more seasoned colleagues believe he is extremely unwise to go in so negatively and aggressively this soon, after what was a decisive rejection of the Coalition.
In fact, with 58 seats in the 151 seat parliament, it is proportionally the Coalition’s worst result in 76 years. For that they can thank the emergence of the teal independents taking six of their blue-ribbon seats, adding to the toll taken by Labor and the Greens.
According to a report in The Australian, Scott Morrison is now privately suggesting setting up a progressive Liberal movement-type party to run in city seats while the Liberals and Nationals amalgamate elsewhere along the lines of the LNP in Queensland. This urban party would then become the junior partner in a coalition with the LNP. “It’s fucking crazy,” was the reaction of one New South Wales Liberal. “It would do more harm than good,” was the reaction across the border in Victoria.
It’s not hard to see that Anthony Albanese has much more credibility on his side when he explains the energy emergency as the result of “a decade of neglect”. Dutton, his naysaying opponent, can’t avoid the fact he was a senior minister in government over three terms when decisions were made or, more pointedly, not made.
Albanese and Bowen are now working on an energy policy that will give investors the certainty they have been denied while the Coalition slugged out its internal conflicts. When Malcolm Turnbull actually hit on a credible solution in the shape of the national energy guarantee, Dutton and Morrison despatched him for his trouble.
Little wonder the corporate world has breathed a sigh of relief at their demise. An indication was in The Australian Financial Review, where a survey of its top-end-of-town subscribers found 74 per cent thought Albanese had a “good or very impressive start” and found it “refreshing”. One remarked, “It’s good to have the adults back in charge in Canberra.”
The latest Guardian Essential poll found Albanese is experiencing a post-election boost not seen since Kevin Rudd was elected in 2007. The prime minister’s net approval rating is up 40 points since the election a month ago.
That suggests Albanese and his team are well placed to deal with the enormous challenges facing the country. Reserve Bank Governor Philip Lowe has taken to personal appearances in the media to warn inflation is on the march and could hit 7 per cent this year. He is determined to slay this dragon, foreshadowing that interest rates will continue to be ratcheted up and could hit 2.25 per cent.
We are left with rising gas and electricity prices and petrol price relief ending in September. These cost-of-living pressures, along with falling property values, all spell trouble for Albanese. “No government can survive the middle class feeling poorer,” is the view of one newly marginalised Liberal MP.
Maybe, but with three years to go until the next election, some in Labor are counting on things improving. Albanese and his treasurer, Jim Chalmers, are not rushing to offer voters more relief in the meantime – although the estimated $7 billion cost of the low- and middle-income tax offset is still due next month, with 10 million Australians estimated to be eligible. There was also relief on Wednesday in the form of the Fair Work Commission raising the minimum wage by 5.2 per cent, slightly above the level Morrison and Josh Frydenberg warned would destroy the economy. Albanese welcomed the vindication of his “absolute” support for the rise during the campaign, saying it would make a big difference to these struggling families.
Of course, the government still has one eye firmly on the need for budget repair. The fantasy both sides of politics indulged in during the election – that there could be bigger and better services without tax rises – was utterly disabused by the secretary to the Treasury, Dr Steven Kennedy, last week. He spelled out the costs of unfettered debt for the next decade or more, which is the legacy left by the nation’s previous “champion money managers”.
Chalmers won’t be following Boris Johnson’s Conservative government in Britain, where gas producers have been hit with a windfall profits tax – even though it is more than justified and would safeguard programs such as the National Disability Insurance Scheme.
The lesson of Tony Abbott and Joe Hockey’s 2014 horror budget, which broke every promise made in the previous year’s election campaign, has been well learnt. Neither lasted in their jobs until the next poll. Chalmers says he and the prime minister will not be breaking any campaign undertakings.
Labor hardheads are under no illusions that if there were an emerging consensus among economists and even business on the need for budget repair – say, by modifying the stage three tax cuts – the Dutton opposition would mercilessly attack it. And it would do so supported by feral coverage from the Murdoch media.
The government’s assessment of its opponents and their media allies is bolstered by Dutton’s unscrupulous use of previously classified security information to launch a political attack on his successor in Defence, Richard Marles. Dutton wrote an opinion piece in The Australian revealing a secret plan he had in the dying days of government to fast-track nuclear submarines built in the United States.
Dutton claimed the incoming minister would have been briefed on this plan by the department. He wrote that the new minister’s “early comments on the topic are alarming” – a reference to Marles talking about prolonging the Collins-class diesel-electric submarines or building a few more pending the arrival of nuclear subs in 20 years.
Dutton tried to cloak his political attack in his superior national security credentials and his inside knowledge. The former head of the departments of Defence and Foreign Affairs, as well as ASIO, Dennis Richardson, was not alone in being appalled.
Richardson told RN Breakfast, “there were aspects of what Mr Dutton wrote in The Australian which had previously been classified”. He added, “So I suppose it’s a matter for the government and Mr Dutton to sort that out.”
Labor insiders would be very surprised if the matter is let slide when parliament resumes.
Former prime minister Malcolm Turnbull was also scathing, describing Dutton’s outburst as the same “belligerent bluster that destroyed a submarine contract”. Turnbull doesn’t mince words on Dutton and Morrison’s lying incompetence, which “deceived the French president and misled the American president” and ultimately left Australia without a submarine program.
Turnbull said Morrison and Dutton “did enormous damage to Australia’s national security. Shameful, actually.”
Richardson is full of praise for the way the new government leadership has set out to repair crucial relationships in the South Pacific, with China as well as with Quad partners the US, Japan and India.
He says he thinks the “prime minister, the Foreign minister and Defence minister have managed that superbly well”. He says they have the advantage of being new and without the “baggage and barnacles” of the past 10 years or senior ministers always talking up conflict with China.
The former senior bureaucrat stresses it will get harder from here, but the tenor of Richardson’s comments suggest he is impressed by the stark contrast between the new and old regimes. Like the rest of the country, he welcomes the promising start.
This article was first published in the print edition of The Saturday Paper on June 18, 2022 as "Under new management".
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