Labor’s shrewd move on price caps saps all Christmas cheer from the Coalition

Whatever criticisms can be made of the Albanese government, you can’t doubt its sense of political theatre. It is recalling Parliament on about the last day before Christmas it could get away with, without looking nerdy and weird, in order to do its bidding. 

The battered opposition, the House crossbench and the rabble Senate — hauled back to vote up a law that combines emergency price caps on gas with a future system for permanent price guidelines and a $500 million bung to “compensate” the gas companies for their “losses” — all know that the fix is in. 

This is a law designed to make everyone except Labor squirm. With the gas companies portraying it as the Bolsheviks’ Law No. 1, nationalising, well, everything in Russia, the opposition is under vast pressure to oppose it, and with it, any consumer relief on heating and power prices. The Greens and independent Senator David Pocock have to swallow a half-billion gift to big gas in order to vote up the first measures of state control of fossil fuels. The two-person Jacqui Lambie Experience has to maintain its client status to the Coalition, but reduced heating prices will be huge for many Tasmanians.

Only Labor can combine the corporatist glow of laying down the law to big companies while stuffing them full of taxpayers’ money, a fraction of which it can’t find for basic benefits or mental health, and argue that this is coordinated national development. 

You’d have to be a true believer indeed to think that was not to some degree reverse-engineered from political optimisation back to actual policy. As Michael West notes, the price cap sets the price substantially above the level of profitability: gas used to trade at $5 a gigajoule before the LNG cartel ramped prices to export parity. It was $10 less than two years ago. Cost of production is roughly $5GJ now, but spot prices are up to $25GJ. So why cap at $12GJ? 

So, rather than stripping big gas, it locks in excess profits — just not ludicrous, war-profiteer profits. Big gas keeps up the spurious threats of pulling out of production, long enough to get the half-billion in direct payments. Nice little earner. 

But it’s the politics that matters. This is Labor’s chance to really establish its dominance as the party of the nation, and the Coalition as the client party of interests, subject to hysteria, and disregarding the needs of the public. If the Coalition really does stumble into opposing cheaper energy prices — whether or not they eventuate — it will be identified with the most-hated corporations, against the public. 

That is a great image for Labor to end the year on.

The possibility that the Coalition may wander into this punch arises not only from its fealty to big gas, but also the residual presence of ideologues, opposed to state control of price “signals” at any cost. 

This is the problem every centre-right party is facing at the moment. In the second half of the 2010s, they all rushed away from austerity budgeting and the small government ethos that underlay it and embraced various forms of populism and lip service to economic nationalism. The bill has now come due, and genuine economic nationalism is demanded, and the right can’t deliver. 

It is cracking them apart, as in the UK, with the 44 days of the Truss government. In the US, populist Republicans suggested that the party should support the US national railworkers’ strike, and outflank the Democrats. And in Australia, we have the right blathering on again about Robert Menzies and the “forgotten people” speech (FPS hereafter). 

You think the right had said everything it could about the notorious FPS? Ha ha, you wish. After the Victorian election debacle, it was stung back to it, with a bit of a sob-a-thon on the Sky coverage, then a mention in various op-eds, and then the centrepiece, yet another speech by Tony Abbott to the Menzies Research Centre, published in the Oz. 

The frequency of this has become bizarre now, a form of ancestor worship and necro-frotting. Abbott’s article is self-parodic, giving a Mincusian retrospective justification to current policies. Ming would have opposed emissions reductions, etc etc.

The right keeps invoking Menzies because it now doesn’t know who the “forgotten people” are, or what they want. Menzies’ “forgottens”, he judged, wanted a bit more room to move, a bit less pressure from big forces. But he appealed to them in the midst of the total war reorganisation of World War II when the hand of the state lay hard. 

Now the people being crushed are being crushed by corporations and uncontrolled profit rates, and their number includes benefit recipients and small businesspeople, precarious workers and lower-paid rural families, and so on. Labor can reach across, and respond to, all these groups; the Liberals are hamstrung by the division between large and small capital, and the fact that the division no longer runs down the capital-labour division. 

The smart move for the Coalition in this Christmas showdown would be to tuck in behind Labor, support the price cap, and let the Greens attack Labor cleanly from the left. Indeed, the Greens should go very big. They should propose the nationalisation/socialisation of what is a de facto monopoly gas cartel, in a phased process using compulsory purchase, through compelled share issues to government.

The gas cartel would retain some minority shareholding, and get some cash compensation, and the industry would then be managed by a public board, steered by the principles of lowered costs for ordinary consumers, surplus for reinvestment (steadily shifting from gas to renewables), combined with a steady phasing out of the product altogether. For the “forgotten people” choosing between household power and other expenses, that would be a very attractive idea indeed.

Will the Coalition get smart about who the real “forgotten people” are? Odds are it won’t and can’t, and it will go down defending oligarchic windfall capital against the Australian people, against a measure that may make no difference at all. Christmas theatre, a real naivete scene. 

God bless us one and all!