04-06-2023: Working people across Australia were hit with the news that from July 1, power bills will be slugged with price rises of up to 25%. In releasing its final determination of the 2023-24 Default Market Offer (DMO) the Australian Energy Regulator (AER) forecast that power price increases for residential users will range from 20.8% to 24.9% depending on the region in which they live.[1] The DMO is the maximum limit an energy retailer can charge. AER Chair Clare Savage told ABC (Australian Broadcasting Corporation) radio that the increases could have been 50% (!) without government intervention, such as the federal imposition of price caps on gas and black coal.[2] The gas price cap, implemented by the federal government on the 23^rd of December last year, is supposed to be $12 a gigajoule (GJ).[3] However, Bruce Robertson, an energy finance analyst, told the ABC that in practice, there is no price cap on gas, as the price per GJ in Sydney is $19, while in Melbourne it is $21.

No gas reserves

Mr Robertson explained that gas sets the price of electricity in the national electricity market, and the price that Australians pay for gas is “insanely high”, given that Australia is a major gas producer.[4] Currently only the state of Western Australia (WA) has a policy of gas reservation, which was put in place in 2006. This means that 15% of gas produced in WA must be kept in reserve for local users.[5] However, there is no gas reservation policy in the rest of the country, including the eastern states (Queensland, New South Wales, Australian Capital Territory, Victoria and Tasmania) which comprises 81% of the national population.[6] Australia is in fact the world’s fifth largest gas exporter, behind Russia, USA, Qatar and Norway, and in 2021 exported some 108 billion cubic metres.[7] Working people in Australia therefore should have access to affordable gas, in comparable terms to the gas consumed in the Russian Federation and the US, which should flow on to affordable electricity prices.

Instead, the profits from gas production flow to the energy giants such as Woodside Energy, which in June 2022 completed a merger with BHP. The other largest oil and gas companies are: Santos, Origin Energy and Caltex Australia.[8] While it is the case that gas is a fossil fuel, and a switch to zero carbon energy sources is vital to combat accelerating climate collapse, gas will be needed for a transition. Due to decades of privatisation, electricity prices are made up of wholesale energy costs (coal and gas plants production), network costs (charged by companies that own the ‘poles and wires’) and retail costs (electricity retailers charging for issuing bills, marketing themselves and making a profit).[9] In other words, each stage of the production, generation and distribution of power has their own incentive to charge as much as possible for their “services”. In the case of the electricity retailers, they are mostly issuing a bill, charging outrageous prices, then debt collecting from those who are struggling.

Cost of living out of control

The basic costs of living for working people across the Western world are out of control and are pushing some over the edge. In some countries such as the United Kingdom (UK), they have never been higher. In Europe the main culprit is the self-defeating sanctions applied to Russia as part of NATO’s proxy war via Ukraine. Despite Germany’s unfortunate history with the original Nazis, Germany is now in recession partially as a result of assisting Washington funding and arming the Nazi infested Ukrainian armed forces. Even in Australia, the government fantastically blames “the war in Ukraine” for power price rises. Rather, deliberate price rises are a result of Canberra, Washington and London waging multiple proxy wars against Russia and China PLUS supply bottlenecks still unravelling from two years of nonsensical “Covid” lockdowns, border closures and deliberate implosion of whole sections of domestic economies. The pre-mediated shutdown of economic activity, which involved throwing hundreds of millions of workers out of employment, had nothing to do with “public health” and everything to do with attempting to “re-set” floundering casino economies.

While capitalism has historically led to some progress, a terrible human price is paid for its rise and development, and its current state of decay is a plain catastrophe for the working class. Capitalism in the West has been largely financialised, as it has long since been unable to make an adequate profit on the manufacture of goods and services. It must draw profits from places which it originally left to the state – such as the provision of utilities. If it must do this through deliberate price gouging, then that is what it will do, aided and abetted by capitalist politicians of all stripes. Yet it is not just plain old corporate greed which drives them to extort money from the sections of society least able to afford it. It is being eclipsed by the vast productive capacity of the socialistic People’s Republic of China (PRC) combined with its partnerships with semi-nationalised economies in some Eurasian countries, such as Russia and Iran. State or semi-state control of such economies means at the very least independence from Washington and the European Union (EU) – something which imperialism cannot tolerate.

Essential services, such as electricity, gas and water, should not operate for the benefit of the obscenely wealthy power corporations. All energy sources should be nationalised and taken into public ownership. However, nationalisation of energy sources must be linked directly to the demand for a workers’ republic. The nationalisation of energy production and distribution can lead to significant and much needed economic recovery and growth – but only when they are in the hands of a proletarian state. Hence, the enormous growth of the PRC, which drives knock-on development in its neighbours and even in the West – as long as the West continues to keep trade with the PRC open.

The collapse the so-called left and the Union officials on “Covid” means they are essentially unable to oppose new wars against Russia and China, nor take action on elementary working-class cost of living issues. Nor will plaintive demands for “nationalisation” suffice, as calls on a bourgeois government to come to the rescue are profoundly disorienting and disempowering. Instead, workers must demand: public ownership of energy and infrastructure, overseen by a workers’ government! No one will deliver salvation. Workers must forge a leadership which can inspire their class to achieve public ownership of the means of production, and end to forever wars, and affordable living conditions for all.

WORKERS  LEAGUE

www.redfireonline.com       

E: workersleague@protonmail.com

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[1] www.smallcaps.com.au/australian-electricity-prices-set-to-surge/ (31-05-2023)

[2] www.theguardian.com/australia-news/2023/may/25/power-bills-to-rise-by-up-to-a-quarter-in-parts-of-australia-after-regulator-issues-market-default-decision (31-05-2023)

[3] www.ministers.treasury.gov.au/ministers/jim-chalmers-2022/media-releases/gas-price-cap-take-effect (31-05-2023)

[4] www.abc.net.au/news/2023-05-25/australian-energy-regulator-market-offer-electricity-price-rise/102385284 (31-05-2023)

[5] www.smh.com.au/business/companies/it-s-ridiculous-architect-of-wa-policy-calls-for-national-gas-reservation-20220616-p5au8q.html (31-05-2023)

[6] https://en.wikipedia.org/wiki/Eastern_states_of_Australia (31-05-2023)

[7] www.statista.com/statistics/217856/leading-gas-exporters-worldwide/ (31-05-2023)

[8] www.climatenewsaustralia.com/australias-natural-gas-companies-which-are-the-biggest-ones/ (31-05-2023)

[9] www.yourlifechoices.com.au/finance/why-are-electricity-prices-going-up-again-and-will-it-ever-end/ (31-05-2023)

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