to burn. Flooding. Pandemic. War. And now an energy crisis
Times are tough for our communities as households and businesses grapple with rising inflation and higher interest rates.
As a small business operator in my Goldstein headquarters pointed out this week, this makes COVID look easy. Meanwhile, another struggle with operating costs for his small restaurant is rising so quickly that he’s considering closing two or three days a week.
A wheel of saganaki cheese has gone from $140 to $280 in just a few months and is still rising. “How many times can you reprint the menu,” he asks? And that’s if he chooses to pass the costs on or, the stark alternative for a small business owner, suck them up.
This little Greek place made $22,000 last week. He says that gross would have represented about $8,500 in profits a year ago. Now it’s just breaking even – if it is.
Energy prices could be the last card that collapses small businesses like this unless they can, they say, find security. Even if the price is high, you can plan for what to see. Price volatility is the enemy.
Electricity, in particular, is a problem because companies and households only know what they will pay after using it.
So, what can we do?
This new Labor government, elected on a platform to end the ‘Climate Wars’, faces an immediate crisis that presents an opportunity to fix several shortcomings in the energy market.
In doing so, I say, as independently elected on a climate and integrity policy platform, there should be no backsliding or indulgence for powerful fossil fuel interests.
I try to be an honest broker. In doing so, I come to the role unencumbered but keenly aware of the challenges of influencing the habits of the major parties, guided through generations of behavior and relationships.
It is a troublesome legacy that Scott Morrison’s indolence has left Anthony Albanese, along with the negative global ramifications of Vladimir Putin’s criminal decision to go to war against Ukraine.
It wouldn’t have had to be if the coalition hadn’t fought for more than a decade and denied the science of climate change.
We could have had clean, green, and cheap energy to protect ourselves from the shocks of a global energy market whose vagaries we cannot control, and a power grid fit for this purpose.
But we are where we are.
Mr. Albanese has a major crisis and a great opportunity to jeopardize his claim to distinguish between past foolishness and future energy security. Problems have their costs, but they also present opportunities.
Businesses can manage slightly higher costs if they fit them into their budgets. What they cannot handle is uncertainty.
The government and regulators are trying to solve that by imposing a cap on energy prices and ensuring the national energy market is fit for purpose, meaning producers and retailers can’t play the market.
A tax worthy of applause
But that’s only part of the story. At the same time, we can fixate on the market, which benefits the consumer in the long run.
It’s not often you hear applause when a new tax is proposed, but that’s exactly what happened when I suggested on Thursday night’s ABC Q&A that we should tax multinational gas exporters for the unexpected gains they are receiving from Putin’s invasion of Ukraine.
It seems common sense.
Any argument about the sovereign risk of the windfall is a furphy. No one had foreseen a major European conflict at this point. This is not the money they had anticipated; it shouldn’t affect the condition of their businesses.
We must look at what these multinationals earned before the war and what they make now and impose a price equalization tax on the difference.
The proceeds can be used for three purposes:
To isolate the neediest individuals, families, and businesses in our community from the impact of skyrocketing electricity and fuel prices to make up for lost time upgrading the grid to manage wind and solar power and to increase storage capacity turbocharging to move households gas, transfer of supply to business
I was encouraged to hear Industry Secretary Ed Husic say yesterday, when asked about taxing gas exporters, “everything is on the table”.
Never waste a crisis, especially if the political capital is on your side.
Zoe Daniel is an independent member of Goldstein’s Melbourne seat.