SRAP 5004 Op Ed
The Politics of Power: Who is Accountable for a Decade of
Failed Energy Policy?
By XXXXXX for The Guardian Australia
Vales Point Power Station on Lake Macquarie Source ABC News: Ben Millington
The Eastern States of Australia are enduring a once in a generation power crisis.
Soaring electricity prices, gas shortages, and the suspension of the national electricity market all point
to a complete breakdown of the status quo in Australia’s electricity network.
Who then is to blame for this policy failure? At whose door does the responsibility for disaster lie?
And how are they held accountable for the failure of their duty to the Australian people?
Unfortunately, thanks to the convoluted and complex nature of our semi privatised electricity
network, the blame lies at too many doors. A whole raft of current and former politicians, energy
company executives, regulators and advisors are to blame but unfortunately, we are rarely able to hold
them accountable for their decisions. Our system provides accountability for illegal, corrupt, and
unlawful decisions but can it provide accountability for purely bad policy?
Relinquishing Power
Any discussion of the current electricity balagan cannot be complete without analysing the effects of
the privatisation of electricity resources across Australia.
Beginning with Jeff Kennett in Victoria, and carried by a tide of neoliberalism, state and territory
governments began an orgy of sales of all aspects of the state-owned electricity networks. This was a
fault of Labor and Coalition Governments who saw it is a chance to raise capital to replace declining
state revenues, fuelled by relentless and often needless tax cuts at state and federal levels.
While initially raising billions of dollars for the respective state governments, the long-term effects of
the electricity privatisation became apparent in the form of higher prices, failure to invest in
infrastructure, and a stuttering National Energy Market.
The ideological obsession with selling power stations was exemplified by the 2015 sale of Vales Point
Power Station for $1m, less than a house in Sydney’s CBD, and said to be above its current value
according to future Premier Gladys Berejiklian. A short two years later it was valued at $732m, an
increase per year of 36000% value for the private shareholder.
The privatisation agenda took the electricity outside of the hands of government and out of the
institutions of government accountability. Despite investigations and condemnations from the auditor
general, the ACCC, and other institutions, little was done to change course.
Retail electricity prices rise Source: ABC News 16 Oct 2017
The Fish Rots From The Head Down
The politicisation of climate change and internal Coalition decisions effectively delayed any
substantial reforms of ailing infrastructure and the energy market. The climate change wars,
precipitated by the successful 2010 Liberal Leadership challenge by Tony Abbott, wreaked havoc on
the forward planning of Australia’s energy policy.
Despite sweeping into power on a pledge to abolish the carbon tax, the Coalition struggled for 9 years
to implement a coherent energy policy. The attempt to lock in a national energy policy cost Malcolm
Turnbull the Prime Ministership and Scott Morrison was happy to absolve himself of any
responsibility over the area to his inactive Minister, Angus Taylor.
Reporting from the SMH shows that Morrison’s signature energy policy, a $1bn fund to add power to
the national electricity market, didn’t add a single watt to the grid and none of the money has been
spent on any of the 12 projects named.
Now the Coalition has begun cooling its heels on the Opposition benches they have resurrected they
have failed to articulate a policy beyond raising the spectre of nuclear policy, an unpopular and
extremely expensive alternative that they never proposed when they occupied the Treasury Benches.
Accountability was to be found when the failure to articulate or implement a key energy policy was a
factor in the Government losing hitherto safe seats to Teal Independents. Vertical accountability from
the voting public was finally able to hold the Morrison Government to account when other institutions
such as the media, auditor generals and others where unable to change the Government’s course.
Hot Air
Finally, Australia’s attitude towards gas exemplifies its short sighted and laissez-faire attitude towards
energy policy. Currently, the Eastern seaboard of NSW is suffering through a gas shortage, despite the
fact that Australia was in 2020 the world’s largest exporter of LNG, beating hydrocarbon giants such
as Qatar.
A failure to implement a gas reservation policy by the federal government and most states, an
opposition to gas exploration by state governments, the failure of the Southwest Qld fracking boom,
and the Russian invasion of Ukraine has sent prices skyrocketing as producers seek to cash in on the
global demand for non-Russian LNG. The goal with the foreign owned companies is, of course, profit
and not reliability of supply to their host country. They are fundamentally accountable only to their
shareholders and not to the Australian people.
Our gas policy remains barely able to arrest skyrocketing prices without massive market intervention.
Only in Western Australia, with a gas reservation policy of 15% of its exports, has gas prices a
fraction of the record prices of those in the Eastern seaboard. This sensible policy has yet to be
imitated by any other Australian state or territory.
Despite the trumpeting by the Coalition Government of a gas fired recovery, soaring gas prices are
now a handbrake on the economy and threatening the viability of Australia’s remaining
manufacturing sector.
The failure to deliver certainty of gas supply is at the feet of the former Liberal/National Government
and the 7 states and territories that failed to embark upon a gas reservation strategy and adequately
prepare for this eventuality. Yet who can hold them to account for this failure?
Who is to blame?
Neoliberal policies, failing markets and a decade of political combat have left Australian energy
consumers in a terrible position. We have ageing or retiring infrastructure that has seen 3.1 gigawatts
of power taken out of the grid in the last decade.
Australia is the world’s largest coal exporter and the largest exporter of natural gas but our craven
refusal to stand up to foreign energy companies and false cries of sovereign risk dampen any real
attempt to use our vast bounty for Australians.
The crisis is not caused by lack of resources, complicated supply chains, and a global energy shortage.
This is a failure of public policy and political courage of epic proportions.
The fractal nature of our privatised energy system means that accountability for this crisis is also in
short supply. Angus Taylor, the energy minister for the last four years should also take a leading role
in the blame game. His fecklessness and non-existent leadership in the space for four years ensured
that the national energy policy remained rudderless for the years needed to head off this crisis. He is
to blame for a significant portion of this crisis and held to account. Instead, he has become the
Shadow Treasurer and one of the leading figures in the contemporary Liberal Party.
Ludicrously, rather than accepting a share of the blame for the crisis, Coalition figures are now
pushing discredited forms of power like nuclear energy, conspicuously absent from any energy policy
advanced in nine years of government. It will take further election defeats for the Coalition to finally
come up with a credible alternative energy policy.
How can they be held to account?
The real responsibility is at the feet of three decades of retired politicians, premiers, state treasurers,
energy company executives and their advisors who have collectively constructed this failed market.
We cannot pull them all before a tribunal and short of a royal commission into the last three decades
of privatisations and energy policies, we are unlikely to see them receive any contemporary scrutiny
of their roles. Many of the central players are now long gone and beyond the reach of parliamentary
scrutiny.
The conflict is between the ability of Ministers to exercise discretion in the management of the
portfolios and the enactment of effective policy is eventually arbitrated by voters and the fifth estate.
The ability for energy ministers and treasurers to operate or sell state electricity assets was
unfortunately not balanced with a proper reckoning about the long-term effects of their policies or a
vigorous attempt to overhaul and balance the national electricity market. Statutory institutions like
audit offices can and should make recommendations on public policy but should never be the ones
ordering elected Ministers how to do their jobs.
Fundamentally, vertical accountability from voters who could have seen the short-sighted nature of
the privatisation and horizontal accountability from the media should have stopped the plans in their
tracks.
The Way Forward
The chance for reform can come at moments of greatest crisis.
Some economists are now arguing for a renationalisation of the national grid and the transition to
renewables presents the opportunity to create a new state-owned generation system that provides
cheap, green energy to Australian businesses. The vigour of new Energy Minister Chris Bowen gives
us hope that the new government is treating this crisis with the attention it deserves.
It was once said that a society grows great when old men plant trees in whose shade they know they
shall never sit.
Australian energy policy over the last thirty years has instead seen a contrary lack of foresight and
selflessness, yet we may still end up in darkness all the same.