Monday, July 4, 2022

Grattan on Friday: Everything, it seems, is being sworn in to test the Albanian government

Anthony Albanese and Energy Minister Chris Bowen on Thursday formally updated Australia’s international commitment to its proposed climate change action. This is now a 43% reduction in emissions by 2030, in line with the policies that Labor took after the election.

They have been watched by representatives of the business sector, enlightened at the prospect of greater policy certainty, which in turn will pave the way for more confidence in investing in energy.

At a news conference later, Bowen declared forcefully: “Today, Australia is turning the climate corner.”

Well, yes and no. The Albanian government promises a more progressive climate and energy policy, in line with the needs of the inevitable transition to a carbon-free economy.

But at this exact moment, it may seem less like we’re around the corner than that from the old road it seems even more complicated than we thought.

The Albanian government blames the energy crisis engulfing Eastern Australia on the coalition’s failure to put in place policies to ensure adequate and timely investment in renewable energy.

That’s correct, but that’s not the whole story. The energy system has recently been hit by some unforeseen challenges, including the Ukraine war.

When regulators tried to deal with the situation with a price cap, the power producers acted to promote or maintain their commercial interests. All of this led to the Australian Energy Market operator taking over the system on Wednesday.

The Albanian government is doing what it can, by cooperating with the states and supporting AEMO.

But whether or not they have a more rational policy than previously existed, the government sounds quite in-between about the role of gas and coal in the next few years of the transition.

Any idea that the “climate wars” are over is misplaced optimism – the opposition will exploit the immediate problems to ensure they are kept on fire.



Read more: This 5.2% decision on the minimum wage could shift the trajectory for everyone


Long-term policy thinking is essential. But politically, the public very often thinks short-term, and their thinking can change more or less.

If we look at his political position this week, the government will be delighted.

The Essential poll, published this week, garnered approval for the work Albanians are doing, rising 17 percent to 59 percent between May and June. His disapproval dropped by 23 points to 18%.

When people were asked if Australia was heading in the right direction or on the wrong track, 48% thought it was going in the right direction (8 points higher) and only 27% said the wrong track (15 points down).

These results reflect in part the mere relief at the dispatch of the Morrison government and especially Scott Morrison himself. But whatever the composition of managers, the big question is how strong a political shield the Albanian government will have, as it faces a major clash in the coming months.

Philip Lowe, governor of the Reserve Bank, does not appear regularly in the TV lights. When he appeared on the ABC on Tuesday night, it was to predict that Australia’s inflation rate would reach 7% by year-end. Lowe also reiterated that he expects the official interest rate to rise to 2.5%.

A day later, the government had welcome news when the Fair Work Commission gave its 5.2% increase in the minimum wage, slightly more than the latest 5.1% inflation rate. However, the increase was smaller for grants, and inflation is already ahead. Although the commission did not think the rise was a risk to the economy, critics claimed it would hit small businesses as well as inflation.

Meanwhile, there were signs of thunderstorms abroad. In the United States, the Federal Reserve has raised its benchmark interest rates by 75 basis points, in a big blow at an inflation rate of 8.6%. Fears are mounting for a US recession, with serious consequences for other countries.

Internationally, the weekend meeting between Defense Minister Richard Marles and his Chinese counterpart was a welcome sign that China, after the change of government, is interested in a thaw in a relationship that has been dysfunctional for years.

But the Chinese are skilled in games and Albanians’ reaction – essentially to say, show us you are serious by lifting trade restrictions on our exports – was exactly right.



Read more: Want a solution to the energy crisis plaguing Australia’s east? Look west


A less welcome sign was that the human traffickers were testing the new government, with several boats from Sri Lanka intercepted since the election.

There is no doubt about the government’s determination to prevent boat arrivals. But it should also be wary of signals.

It did absolutely the right thing to allow the “Biloela” Sri Lanka family to return to their Queensland town. And in time, they have to get permanent residency.

But for Albanians to be photographed with them was more problematic. It seems like a nice, harmless gesture, which reinforces the contrast with the Morrison government’s heartless treatment of the family. But the picture is fodder for the human smugglers’ ads.

Former Labor operator Cameron Milner, who wrote in The Australian this week, pointed to optics on a different front, with a warning to Albanians – whose travels so far have been fully justified – about the need to stay home .

A few weeks ago, it would have seemed an excessively long bow to suggest that the situation the government is facing is parallel to that which the Whitlam government is facing in the wake of the international oil shock. But while the details differ, the sizes can be compared.

Mega-crises require flexibility. But be too flexible and it can bite back.

For example, as the budget approaches, there will be more calls for the government to scrap the coalition’s highly costly phase three tax cuts, which are now estimated to cost the budget more than $ 200 billion between 2024-25 and 2031-32. They were legislated years ago, when the budgetary situation was favorable rather than with a large deficit.

But Albanian will turn a deaf ear because he knows that breaking his word would create more problems than delivering the tax cuts. It would destroy confidence in his word, and it would undermine his government.

It can be seen as a choice between best-practice policy and “safe” politics. Usually, a leader should opt for good policy, even if it involves a U-turn. But in this case, Albanian would be wise to stick to his political lens, given a U-turn would make a hole in his credibility.

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Nation World News Desk
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