We Need the Government to Do What?!

When TMR is not busy being a private lawyer, relishing sledge on a basketball court or tending to his fruit trees, he can be found cooking up culinary delights – such as his ridiculously tasty chicken and prawn curry laksa (using plenty of goodies from the yard such as coriander, Vietnamese mint, Thai chilli, Kaffir lime leaves and Tahitian lime juice).

Regrettably, TMR made the mistake last night of attempting to consume his laksa while resident ‘conservatives’ Peta Credlin and Cory Bernardi attempted to debate the parlous state of Australia’s energy market with resident economic imbecile leftist Nicholas Reece on Sky’s Paul Murray Live.

By now, you may be aware of the small matters of:

  • federal Energy Minister Josh Frydenberg’s attempt yesterday to wrap a steaming pile of dung in foil  convince the public that their energy bills were going to magically go down before the end of this year – because he’d given the big bad power companies a good talking to.

Unbelievably, TMR actually heard someone looking and sounding exactly like Cory Bernardi saying words to the effect that:

  • there were too many energy retailers in the market ‘gaming the system’; and
  • the government should consider taking all these players and speculators ‘out’ and becoming the only purchaser in the market – so that we could then watch them all scramble to lower household energy prices.

One can only speculate whether this idea will make it to Bernardi’s ‘weekly dose of common sense‘.

Shortly after, someone looking and sounding exactly like Peta Credlin said that it may be necessary for the government to ‘step in’ and sort things out (when it comes to the AGL and Liddell situation).

After composing himself from what must have been quite a shock, resident leftist Reece had little option but to:

  • applaud Bernardi and Credlin for admitting that the free market has failed (TMR: FMFD);
  • speculate that they must have had a recent moment of enlightenment; and
  • suggest that they should come and join the Labor Party – so that they could continue to work on getting the government to intervene in more things that ‘put people first’.

Excuse me?

What just happened here?

(Hang on a minute while I go and rewind the recording and double check…)

(…)

(…)

(…)

(FMD…)

No Cory, that’s a bad Cory.

No Peta, that’s a bad Peta.

Here’s a tip: if what you’re suggesting satisfies the WWJWD criteria (what would Jay Weatherill do?), then whatever it is you’re suggesting is wrong.

Seriously wrong.

In the worst possible way.

Contrary to the views of Bernardi, Credlin and Reece, the correct answer to this government created energy debacle (and my word is it government created) isn’t for the Federal Government to double down, get more ‘involved’ and try to beat Jay Weatherill (and Daniel Andrews) at the game of ‘what’s the most outrageous and hilarious way we can grind the economy to a halt and wreck people’s everyday lives’. (Yes you want to read this link and, yes, you’ll need a sedative).

PS: if you’re wondering why the Federal Government’s current energy policy – along with Credlin, Bernardi and Reece’s above thoughts – seem harrowingly familiar, you’ve got very good reason:

Weatherill’s ‘six point plan’ includes:

BUILDING a State Government-owned, fast start gas-fired power station that can come on when the market does not provide enough energy to keep the lights on [TMR: don’t ever forget that this was all ‘the market’s fault’!]. It is expected to cost about $360 million. No site has yet been selected. It would be 250MW, enough to deliver close to 10 percent of SA’S peak demand.

SUPPORTING construction of Australia’s biggest battery as part of a $150 million spend on a new renewable technology fund.

ENCOURAGE the construction of a new privately-owned power station using a Government bulk buy power contract.

INCENTIVISE the extraction of more gas for use in SA power stations, through a taxpayer-backed exploration fund. [TMR: gas isn’t something that you buy off the shelf. At best, the final product might start flowing from this in about 5-10 years].

GIVING the SA energy minister powers to over-ride other regulators and force power stations to fire up in times of need. [TMR: sounds very democratic].

CREATING an “energy security target”, which requires retailers to buy 36 percent of their power from baseload sources in SA.

The only reason AGL is even considering the possibility that wind ‘farms’, solar ‘farms’ and batteries may be more ‘profitable’ is because they are all heavily subsidised by the government (in the name of global communism and Marxismsaving the world from ‘climate change’). Without these subsidies, which have artificially and massively distorted our nation’s energy market, nobody in their right minds would even think about:

  • generating wind or solar energy – because it’s too expensive and unreliable at the moment; or
  • building the world’s largest battery – which is barely capable of storing enough energy to power an Adele concert (for about the same price as a gas station which is capable of generating enough energy to power 5-10% of a whole state).

(PS: don’t you love it how wind and solar plants are called ‘farms’ and not ‘power plants’? Sounds wholesome doesn’t it?)

real-electricity-prices-

But don’t just take my word for it – go and have a look at the insane amount of coal fired power plants being built by China and India.

Or perhaps you’d prefer the ‘research’ of Australia’s favourite left-wing idiotthink tank, the Grattan Institute:

One consequence of these changes must be recognised. Whatever mix of wind, solar and gas power begins to replace our coal-dominated supply sector will cost more. Without a carbon price, electricity is generated from existing sources at less than A$50 per megawatt-hour, while wind, solar and gas all cost at least more than A$80 per megawatt-hour.

Australia’s energy market isn’t an example of a free market failing. It’s an example of a market failing because it wasn’t allowed to be free in the first place.

If you over-fertilise a fruit tree, it will die.

The only answer to the nation’s energy problem is to remove all handouts and arbitrary taxes given to or imposed on energy providers – whether coal, wind, solar or otherwise. Unless and until this is done, our problems will only continue to worsen.

 

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33 Responses to We Need the Government to Do What?!

  1. a happy little debunker

    I am certain that Morrison claimed the other day that the time of government energy subsidies were over – whilst spending $6-$9 Billion to deliver less electrickery via the pumped hydro debacle – to make both peak and off peak power more expensive.

    He still hasn’t put forth his plans to remove the RET.

  2. Rossini

    Stupid Forkin Liberals

  3. Speedbox

    That these people run the country beggers belief. Is this the best we can do from an adult population of 15 million? Really?!

  4. Iampeter

    The only answer to the nation’s energy problem is to remove all handouts and arbitrary taxes given to or imposed on energy providers – whether coal, wind, solar or otherwise.

    Yes but since conservatives have primarily lead the way in setting this mess up I’m not sure why you are suddenly surprised that they are not on the side of free markets.

  5. struth

    Yes but since conservatives have primarily lead the way in setting this mess up I’m not sure why you are suddenly surprised that they are not on the side of free markets.

    I ask you again to please stop calling the Liberal party conservative.

  6. Why is that none of these so-called intelligent people are unable identify the only solution to this problem: End Renewable Subsidies?

    Then we’ll see some scrambling.

  7. nemkat

    Wen Peta Credlin was destroying the Abbott Government from within, Ministers wondered who she was really working for, because it sure wasn’t the Liberal Party.

  8. Follow the money!

    Then prosecute them.

    Corruption rules. OK.

  9. Infidel Tiger

    Unfortunately Marcus, sometimes when government has completely fucked everything up, there isn’t a free market solution straight away and government intervention is necessary.

  10. manalive

    The only answer to the nation’s energy problem is to remove all handouts and arbitrary taxes given to or imposed on energy providers – whether coal, wind, solar or otherwise …

    Agreed but it won’t happen under the present PM, if the government can go to the next election with a plan to build a new HELE coal plant it has a show, once operating it can be put on the market — it makes more sense than the Snowy ‘Big Battery’.

    … nobody in their right minds would even think about …. generating wind or solar energy – because it’s too expensive and unreliable at the moment

    That qualification is used a lot by those who are bit shy about coming out as renewable energy deniers implying that at some time in the future the sun will shine 24 hrs a day 365 days a year with a constant optimum wind speed of 30 kmh, or an enormous proliferation and cost because any advances in individual generator capacity of wind and solar will necessarily be marginal.
    Solar and wind energies are far too dilute ‘hit or miss found’ energy sources (… imagine that government mandated that 20% of all air transport be in the form of gliders, which is what it is doing in the electricity sector …).

  11. H B Bear

    Only someone as fundamentally stupid as Nicholas Reece and the Lieborals could regard the legislative dogs breakfast of the NEM as a free market failure.

  12. How profitable would be apple suppliers, if every time you purchased an apple you were forced to buy two rotten oranges?

    There you have the RETs.

  13. Tel

    http://www.cleanenergyregulator.gov.au/RET/About-the-Renewable-Energy-Target/History-of-the-scheme

    The RET was started in 2001 and involves MANDATORY purchasing of a certain amount of renewable energy, together with a system of tradeable compliance certificates (that’s not quite carbon trading but pretty dang close). It was increased on 2009 which is about the time prices turned upwards. It was adjusted again in 2011 when it got split into the small and the large (SRET and LRET).

    It got reduced a bit in 2015 (gosh, that’s when the price went down).

    Now it’s totally dodgy to draw the retail price without putting the GENERATION price on the same chart because electricity markup is huge, but tricky, tricky the RET certificate exchange price does not show up in the generation price. Also there was the huge “poles and wires” investment that went into the distribution systems, for reasons we probably will never know about.

    Anyway, get rid of RET and you solve the generation price problems. After that we can look at where all the middle-man markup is going.

  14. Macspee

    Surely to Heaven there is corruption about! The stench of grovellers grasping for money from government at the same time as claiming their projects are economic send in the public interest is surely over the top.
    The way out?
    Stop ALL subsidies and favoured policies, get government the hell out of the way and let real people do what they do best – provide at their own expense services people want at prices they can afford.
    A few class action by shareholders and investors in companies and super funds that waste investors’ money on uneconomic investments might go down well. Breach of trust would be a good start.
    Won’t happen of course – too many snouts in the trough.

  15. Percy Porcelain

    someone looking and sounding exactly like Peta Credlin

    You sure it wasn’t Dolly Shorten in a wig, lippy and frock?

  16. Dr Fred Lenin

    Have weatherill and musk been arrested for fraud yet? If not. Why not.? Seems like SA has no government never heard of them doing anything yet ,there must be lots to be done to undo the reds mess they left . Be a good place to privatise government out to able companies and eliminate the polliemuppets class .

  17. BoyfromTottenham

    Unfortunately we have been saddled with an insane and damaging Bi-Partisan ‘energy policy’ in Australia, a sort of ‘deadly embrace’ that is preventing either major party from rationally analysing the situation and acting to correct its pernicious effects on the whole power generation and reticulation system. Like two powerful magnets stuck together, its going to take an almighty effort to break them apart. So what sort of calamity must befall us (for I’m sure that is what it will take) before things change? Hell if I know. But it won’t be good for the country, and as ever seems to be the case, we benighted taxpayers will bear the burden of fixing the results of this multi-billion dollar political brain fart. All I can hope for is that it gets included into a new chapter of Charles Mackay’s excellent book ‘Extraordinary Popular Delusions and the Madness of Crowds’. It was first published in 1841, so its about time it got updated!

  18. A Conservative Viewer

    Why is it that a reasonably intelligent laksa loving lawyer can’t get the basics right.

    Bernadi has always argued to get Govt out of the electricity market and that removing all subsidies is the only way to have the market operate efficiently. The point he made last night, was not ideological but a practical and rational one. If you want to make an immediate difference in the electricity pricing racket then you can do so by preventing the generators from also being the major participants in the buyers and sellers market. Stopping manipulation of the current marketplace by those driven to make prices higher is entirely rational and consistent with a free market.

  19. Why is it that a reasonably intelligent laksa loving lawyer can’t get the basics right.

    Hey! Keep the Laksa out of this, Laksa is great, Laksa doesn’t discriminate.

  20. Tel

    Stopping manipulation of the current marketplace by those driven to make prices higher is entirely rational and consistent with a free market.

    There’s no market manipulation happening, RET requires mandatory purchase of renewables which adds to the cost of running any fossil fuel generator. It’s designed to do that. This is the whole purpose of the policy, and of course it necessarily must also drive up the price of electricity because it forces the coal generators to pay a sizable overhead.

    Suppose you need to move house and you have at your disposal a truck, and a tricycle. However, every time you use the truck to make a journey you are (by law) forced to hand over 100 certificates. The only way to get one of these certificates is to carry something across with the tricycle. Then some skanky bystander laughs at you for making a trip in the tricycle and says “Look at this free market moron.”

    Until we are talking about how RET works, we aren’t talking about anything at all.

  21. Iampeter

    I ask you again to please stop calling the Liberal party conservative.

    OK but then how are you going to keep evading when it comes to Bernardi and The Australian Conservative Party?

    I’m pretty sure if conservatives were capitalists we would’ve seen something resembling a rights-protecting policy at some point over say thirty years or so.

  22. mh

    A conservative government would recognise the whole idea of wind and solar energy should be left to hobbyists who want to live green, and they must fund their hobby through their own pocket and leave the taxpayer alone.

  23. Robber Baron

    Nick Reece is being groomed for bigger things. He was a Gillard advisor. Yet that stint did not destroy his career.

    His next gig was with the school of government at Melb Uni. He does not hold a PhD and is not published. So he got parked there earning some good coin. Then he bobs up at the Melbourne City Council despite living in the city of Yarra.

    Methinks he’s in line for ALP federal pre-selection when his turn arrives. He is just biding his time and improving his profile.

  24. Robber Baron

    Australia does not need a conservative party or even a libertarian one. Australia needs a capitalist party.

  25. Muddy

    they are all heavily subsidised by the government

    Being corrected by a dribbling redneck such as myself must be humiliating, but the GOVERNMENT isn’t subsidising anything. The TAXPAYER is. We, the Mute, Medicated Clowns of Conformity (MMCoC) are.
    Have I got that right?

    Drop and give me 50!
    OK, you can do them on your knees.

  26. RobK

    Also there was the huge “poles and wires” investment that went into the distribution systems, for reasons we probably will never know about.
    A regulator guaranteed 10% return on investment in a subdued market is one reason. Doing some groundwork to boost transmission for surging intermittants was prudent forward planning.

  27. gowest

    What do you expect when there are more tax-takers than taxpayers.

    You F#cked It, You Fix It comes to mind.

  28. Iampeter

    A conservative government would recognise the whole idea of wind and solar energy should be left to hobbyists who want to live green, and they must fund their hobby through their own pocket and leave the taxpayer alone.

    Except as we know for a fact that consecutive conservative governments did the exact opposite. They built the green bureaucracy in this country and they started this almost a decade before “climate alarmism” was even a mainstream issue.

    Australia does not need a conservative party or even a libertarian one. Australia needs a capitalist party.

    Exactly.

  29. struth

    A true conservative party is a capitalist party.
    A true conservative party is a small government, free market party.
    Politicians can call themselves conservative.
    It doesn’t make them conservative.
    Their actions do.

  30. Andrew Deakin

    Amusing debunk of the policy ineptitude visited upon the electricity sector.

    In defence of Credlin & Bernardi, the latter did remark close to the end of the discussion referenced in TMR’s comment that the best way to handle AGL was not to intervene in the market, or lean on AGL’s board Telstra/3 amigos style, but simply remove the subsidies for renewables, thereby undermining AGL’s business case for replacing Liddell with wind and solar.

    Credlin, to her credit, immediately endorsed this economically rational option.

    Note that the graph of electricity prices in the TMR post shows a steep increase in prices before the carbon tax, and before renewables began to materially affect supply costs. The sharp rise from 2008 – 2012 is largely attributable to the gold plating of networks, which was another federal energy policy misfire, when the national regulator (the AER, a division of the ACCC) took over network regulation from the states under seriously deficient rules. The NSW networks substantially rorted the rules. It is interesting to note that the Victorian networks had been independently regulated since the mid 1990s, under a relatively efficient regime, which reduced network prices by 15 and 10 per cent in the two 5 year regulatory period which preceded the work of the AER. These productivity benefits ceased under the national regulator.

    One lesson from this is that the intervention of the federal government in the management of electricity assets, which was meant to deliver substantial productivity benefits under national competition policy, was poorly handled and deficient even before the poorly thought through national climate change policies were imposed. The consumer has been struggling ever since.

    Not for nothing do people generally agree that national energy policy has been one of the federation’s most disastrous exercises.

  31. shady

    Marcus, you don’t sledge on a basketball court you talk trash.

  32. Peter Evans

    What a straw man this whole post is – enough to make virtue-signallers, even from the left flank, blush.

    Have a look at the whole Paul Murray Live segment on this – it goes for about 20 minutes. The above post hasn’t even got the context right.

    Then have a look at the energy policies of the Australian Conservatives on their website – those policies have been there for over half a year.

    Then never be led by this buffoon Catallaxy Files blog poster again. Seriously embarrassing.

  33. Fifth Column Hunter

    What a straw-man post, Marcus – you didn’t understand what was being said.

    This website, for over half a year, makes it crystal clear what Bernardi knows and stands for re energy policy.

    Go and have another look at the full 15-20 minute segment of the PML show from Wed night – then consider updating this post, for the sake of the credibility of this fine blog site which I’ve followed since the noughties.

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