Greens force Labor’s hand on gas

The Australian Greens, never interested in saving taxpayers’ money, have turned what should have been straightforward measures to relieve power bills for householders and small businesses into an expensive climate change policy measure. Anthony Albanese needs the Greens’ support to get the government’s energy market intervention through the Senate. And under a deal announced by Greens leader Adam Bandt on Wednesday, the Prime Minister would be forced to use taxpayers’ funds to push Australians towards replacing gas with electricity in their homes.

Mr Bandt confirmed his party would vote for the gas market bill after negotiating a package that would see low and middle-income earners, renters and public housing residents offered concessional loans to help them “get off dirty and expensive gas” by replacing gas ovens, heaters and other appliances with electric appliances.

No costings were attached to the deal, which raises the question of how carefully, if at all, the Greens costed the proposal.

Mr Bandt estimated on Wednesday that households could save about $1900 annually to switch from gas to electrical appliances and almost $3500 to “fully electrify” their home.

“For too long, too many people have been barred from making that switch and enjoying those savings because there is an upfront cost associated with that,” he said.

Earlier this year, billionaire Mike Cannon-Brookes’s Grok Ventures estimated that converting the average Australian home to 100 per cent electric power would cost about $100,000 each.

The government now will begin designing the package. Depending on the details, even at concessional rates, the loans would be a heavy impost for renters and low-income households to repay. But if the package is overly generous, taxpayers will be badly out of pocket as interest rates and living costs are rising.

With renewables set to make up a greater share of the nation’s electricity, the Greens are eager to turn consumers away from gas, which is the logical energy source in Australia during the transition from coal-fired power to renewables. The government’s energy market intervention includes a $12-a-gigajoule, 12-month cap on gas, a $125-a-tonne cap on coal and $1.5bn in direct support to lower the electricity bills for welfare recipients and small businesses. On Tuesday, Mr Albanese flagged a national gas reservation policy. But the package does not address supply, which has prompted the Business Council of Australia to warn it risks “kicking the energy can down the road”.