Get ready, according to the AA, for petrol at $3 a liter for Christmas.
Taxes make up about 43% of the cost. Anti tax petitions are circulating.
We also need to get ready for James Shaw’s Zero Carbon bill, with its measured impact on electricity and petrol prices.
Six weeks ago ago I noted how Australian PM Turnbull was rolled due to carbon pricing and offsetting: the politics of climate change decapitating our most important international relationship is a very serious development.
When Turnbull fell, the new Morrison government suggested its sole focus for energy would be “price price price”; emissions reduction with lower household bills. This focus was to be complemented by the government acceptance of recommendations from the ACCC. That included a default safety net for retail prices so customers can easily understand what they are paying and how claims about percentage reductions translate into real dollars.
The most the Australian Federal government can now hope to achieve is to persuade enough voters that Labor’s promise of a much higher percentage of electricity renewables will lead to higher prices and less reliability. Which is as stupid as claiming that electricity from the sun or wind is somehow coming “free”.
Energy is a big complicated issue to fix both in Australia and New Zealand. Those industrial customers like BHP or Fonterra are reliant on gas and coal being available at what they consider reasonable prices (I find it hard to believe their sustainability promises).
Regrettably so far such large consumers have more clout than the tens of thousands of households who in April this year were screaming in the dark from Vector’s insecure network or pensioners shutting down their one bar heater in Otago and Southland through another winter.
Minister Shaw has astutely focused his Zero Carbon bill engagements near-exclusively at the powerful, not at the householder. The same tactic was used to introduce the new fuel taxes.
Summer 2018 is I fear the final window before New Zealand electricity generators start pricing in Shaw’s bill. But it’s also the moment where taxes get questionable when petrol is at $3 a liter when your disposable holiday dollar is stretched hard for the family holiday.
Who decides what’s fair? Certainly not the Electricity Commission who merely seek justification for wholesale prices. And there is no petroleum price regulator so the state can extract what it likes from this near-monopoly product. We have no price protection for energy.
With now no future local petroleum supply we have total vulnerability to international oil prices and to government taxes, for ever.
Between petrol price increases, electricity price increases, and Shaw’s impending carbon emissions bill, is one almighty policy collision.
With 15,000 submissions, the bill will enable households to connect all their energy costs to government intervention. They aren’t yet. But they will.
It’s going to be the big end of town supporting the bill, versus consumers screaming.
The aim is to pass this legislation by mid-2019. Hopefully Shaw and Ardern will land it better than Turnbull did.
Happy winter 2019.
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