Anthony Albanese called it an unjustified act, while Opposition Leader Peter Dutton claimed it was proof of the government’s lack of influence over the US government.
Yet only a few days later, when our energy regulator confirmed that in the coming year, the benchmark east coast electricity price would rise by up to 9 per cent – bringing to $1300 the increase in the average energy bill since 2022 – our leaders’ response was starkly different. Energy Minister Chris Bowen, channelling his inner Marie (“let them eat cake”) Antoinette, blithely told consumers to “shop around” for the best price, while not saying a word about his contribution to higher costs.
Dutton’s response was little better, claiming his seven future nuclear reactors would bring relief, even though he supports a continued wind and solar rollout.
In truth, there was nothing the Albanese government could do – or indeed a Coalition one, were it in power – to persuade Trump not to hit us with tariffs.
Yet our ever-rising electricity prices are a direct and entirely foreseeable result of the two major parties’ commitment to achieve net-zero carbon dioxide emissions.
This policy is a self-imposed monster tariff on our entire $2.7 trillion economy, dwarfing Trump’s hit on our steel and aluminium sales to the US, which account for less than 0.2 per cent of our exports overall.
And it is not a one-off shock, but a ratcheting up of energy costs that started more than a decade ago and must – if the share of wind and solar in our grid is to grow, as both major parties want – continue for the next quarter century.
Bear in mind that our electricity grid is still largely a fossil fuel-based one, with coal accounting for 60 per cent of output.
That more wind and solar energy will result in higher power prices is not an idle theoretical prediction, but what we have seen in every jurisdiction – including Germany and California – that is further down this path than we are.
This reality is denied by Bowen and the bureaucrats that advise him, who maintain the fiction that wind and solar are the cheapest form of power.
Make no mistake, this is economic illiteracy on steroids. Yes, the marginal cost of renewable energy is zero, but only for the 30-40 per cent of the time when the wind is blowing and the sun is shining.
When the weather does not bless us in this way, the cost of renewable energy is infinitely high – regardless of what price you offer, it simply cannot be supplied.
This unpredictable intermittency of renewable energy – which renders it worthless from the point of view of consumers, who value dispatchability of power above all else – is its fatal flaw. It explains why wind and solar factories need massive subsidies to be viable (since they do not provide reliable cash flows for their operators). The CSIRO’s deeply flawed costing methodology pays no attention to this.
It explains why, once these subsidies are in place, all forms of competing dispatchable power (including coal- and gas-fired generation, and one day nuclear) become unviable, because they cannot compete with renewables at the times when they are available. This is why we see persistent coal power station outages, as Bowen must surely know.
And I haven’t even mentioned the entirely new transmission network wind and solar energy requires. Our self-imposed energy tariff is a constantly growing negative supply shock to the economy, raising prices, reducing output, undermining productivity and squeezing living standards.
Not for one or two years, but for decades to come. It is deeply regressive, hurting low-income Australians more than those on higher incomes in exactly the same way an increase in the rate of the GST would. But unlike the GST, it delivers not a cent of revenue to government for hospitals and schools, but instead requires billions to be spent on subsidies each year for everyone harmed by it.
So as the economy progressively weakens, the net-zero fiscal sinkhole must grow each year: a recipe for future financial collapse.
What possible environmental benefit will we get for this mounting economic, fiscal and social trauma? The answer is none. With China, India, Russia and now the US not committed to cutting emissions, our paltry efforts are being swamped by the rest of the world.
In the annals of Australian public policy disasters, our climate folly has to take the cake. Yet our political leaders and public service oligarchs tell us that net zero – far from being a multi-trillion-dollar economic deadweight and threat to our standard of living – is the key to our future prosperity. This is doublespeak that would make Orwell’s Big Brother blush.
With Donald Trump rewriting the global rule book, now is the time for our political leaders to abandon their green-tinged dystopia. Of course, the Labor government will not be for turning.
Chris Bowen, the Chemical Ali of Australian politics, won’t come to his senses. Jim Chalmers, who lacks the courage and smarts of his hero, Paul Keating, is either too weak or to too clueless to call an end to this madness.
In fact, he has been in Bowen’s and Tony Burke’s policy slipstream since day one of the government. Then there is Anthony Albanese. Let’s just say leadership is not his strong suit.
So that leaves Peter Dutton. I think he knows net zero should be dropped. But he is afraid of upsetting the denizens of Warringah and Kooyong, who seem to derive their sense of moral superiority from the pain suffered by the battlers.
But his hand might be forced by the government in next week’s budget.
With no economic agenda or vision to offer voters, Chalmers will likely announce a further round of energy bribes – taxpayer-funded relief for harm the government has itself inflicted. This will be Dutton’s chance. If he opposes these Band-Aids and pledges to abandon the net-zero policy that made them necessary, he may start to look like the alternative prime minister he wants to be.
David Pearl is a former Treasury assistant secretary.
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