State Governments Must Act on Energy Prices to Avoid Economic Crisis

Now we have had time to discuss our national energy price crisis, it’s time to take action.

State Governments, in particular, need to show leadership and support a 12-month

moratorium on increasing power prices.

 

Let me first acknowledge the many that support taking immediate action including Josh

Frydenberg, Federal Minister for the Environment and Energy who will be speaking at the

Vodafone National Small Business Summit this month in Melbourne. Through Minister

Frydenberg, the Turnbull Government commissioned Australia’s Chief Scientist, Dr Alan

Finkel, to undertake a study into the energy sector and complete a report with

recommendations. The report was presented to the Government in June 2017 with the

results widely accepted and indeed praised by majority of Australians and nearly all industry

and business groups. It is also supported by Bill Shorten and the federal opposition so we

have momentum.

 

Australia normally is good at dealing with crisis. We dealt very well with the Asian financial

crisis created by poorly managed financial markets among our northern

neighbours. Similarly, we dealt well with the Global Financial Crisis created by lazy

regulators and greedy money merchants in the United States. Now we have an Australian

economic crisis looming – an emergency of our own making – and our Governments must

act now to avoid disaster.

 

The best way to manage this crisis is by classic change management techniques. What

change is needed? How do we limit any negative impact while we create the change

needed? How fast can we take action? What are the roadblocks to achieving the change we

need?

 

We have a Government that wants to take action, and an Opposition in support of action.

So, what is holding Australia back? There is only one bump in the road which we cannot

allow evolving into a full roadblock – and that is a few recalcitrant, but powerful, Liberal

backbenchers who need to move on and focus on other issues.

 

In addition, we need State Governments to show leadership. Not only do they need to

release gas reserves and promote renewables, but also declare a 12-month moratorium on

power price rises. They need to sit down with the electricity retailers and assist with

subsidies to maintain power supply at the current price. Businesses, large and small, and

consumers will have more confidence in their business plans and in managing household

budgets.

 

We need to focus on building renewable power sources which are faster and cheaper to

build than a power station. A coal-fired power station may be part of a long-term solution,

but it would take years to build. We need to support immediate solutions which are

renewable energy and releasing gas reserves.

 

Several states are running budget surpluses built on tax paid on profits and tax collected by

business people on behalf of consumers and workers. It is important the surpluses are well

invested – and if we can stop power price rises for twelve months while we start the process

of fixing the energy crisis – then we should do so! State Governments, you can’t wait – act

now.

 

Josh Frydenberg and Bill Shorten will speak at the Vodafone National Small Business

Summit, Australia’s premier small business policy event shaping the future of small

businesses at Events Centre Collins Square, 23-25 August 2017.