In the below detailed weekend interview with Luke Grant at Radio 2GB, I discussed Australia’s energy failures and what they mean for the economy.
I also discussed the latest migration numbers and the record collapse in Australian household disposable income.
Edited Highlights:
Australia are the equivalent of a Middle Eastern oil country when it comes to natural gas.
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We have an unbelievable amount of natural gas in this country. We are one of the world’s biggest exporters. Until last year, we were the world’s largest exporter.
We export at least 80% of our gas. Yet we have somehow engineered a domestic gas crisis and shortage. When really, Australians could have very abundant cheap electricity and gas if we just reserved gas for domestic use and made it cheap.
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The whole notion that we need to do boondoggle energy projects is absurd when we could have gas turbines generating electricity, doing it relatively cleanly and delivering Australians very cheap power.
Doing so would ensure that our manufacturing is competitive because we would have low input costs.
Instead, we have done the complete opposite. We export around 80% of it and then we create a fake domestic gas shortage, which jacks up gas and electricity prices, sends our manufacturers broke, and creates cost of living issues for Australian households, who have then got to pay huge amounts of money for their gas and electricity.
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In response, our politicians then end up devising these boondoggle energy projects to solve a problem that they themselves have created. It is absolutely absurd.
As a comparison, the United States is now the world’s biggest gas exporter. But it also has incredibly cheap domestic gas. They pay about $4 Australian dollars per gigajoule for their gas and we pay more than $12 on the East Coast.
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So, we are paying more than triple the price domestically for gas. Yet the United States is the world’s biggest gas exporter. And their cheap domestic gas is purely because they have a domestic reservation policy whereby they basically say, “you have to look after United States citizens first and then you can export the rest”.
What we do in Australia is say: “let’s look after everyone else in the world first,” and then we gouge ourselves domestically and create these sorts of problems, where the solution then becomes all these boondoggle side projects to try and paper over the problem that they themselves have created.
It is just absurd.
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