The energy shock is going to crash houses, the economy and Labor. I can’t put it any more simply than that.
So why is silly Jim Chalmers saying this:
While in opposition, Anthony Albanese called for former prime minister Scott Morrison to pull the trigger on capping gas exports by invoking the Australian Domestic Gas Security Mechanism, which limits producers from exporting when there is a shortfall in local supply.
“There is no simple mechanism that would immediately take this pressure off the gas price,” Dr Chalmers said.“This spike in the price has a number of causes, and it does not have a single solution. If there was one, somebody would have reached for it.
“There is a whole process and I would not want to pre-empt those discussions, but there is no single solution, whether it is liquid fuels, whether it is the gas price, the electricity price – each of these are concerning on their own, but together, potentially extremely challenging to the Australian economy.
“I will discuss with the regulators and with Chris Bowen and Madeleine King in resources to make sure that we are managing this the best that we can and that we are monitoring developments.”
The answer could not be more simple and Silly Jim better hop to it or he is going to oversee a one-term Labor government blamed for a historic recession.
Yesterday I received a number of phone calls that I have never had before. They fell into two broad categories.
The first were about unprecedented energy price spikes.
The second were about the parlous state of housing markets and how “the big one” is upon us in terms of an unprecedented price bust.
What was most disconcerting was that nobody in either group understood the other.
In short, as things stand, the best house price forecasters I know are saying house prices are about to crash by one quarter to one third as the RBA hikes above a 1% cash rate.
But they had not factored in the local energy market crisis so they had no idea of the kind of inflation and rate hikes that that might entail.
The energy group didn’t understand the broader macro implications of the energy price hikes. That they will corner the RBA into hiking more than Australia’s indebted households can handle and, if left unchecked, will trigger a house prices crash and recession.
Silly Jim Chalmers reminds me of both parties. He appears to have no idea whatsoever about the juggernaut hurtling towards the economy and government.
So, here’s your heads-up, Silly Jim.
- Pull the trigger on the ADGSM and force gas prices below $10Gj (recalling that the policy is bipartisan and can be altered any way the government likes).
- Extend domestic reservation to coal as well using an export levy and rebate system to motivate sellers.
Taking on a fight with miners may be your worst nightmare but the alternative is worse.
The energy shock is going to crash houses, the economy and Labor. I can’t put it any more simply than that.
