Australia’s corrupted political process could deliver a windfall of up to $6.9 billion to the government’s fossil fuel donors, paid for by ordinary households and businesses as part of Angus Taylor’s proposed tax to prop up fossil fuel generators.
Scandal-plagued Taylor is reported today to be “increasingly confident” that he will be able to impose a “physical retail reliability obligation” (PRRO) on electricity retailers, which would require them to subsidise coal and gas-fired power stations even though the latter are now commercially unviable due to the low cost of renewables. The subsidy from what is now being called “CoalKeeper” would come directly from higher electricity prices imposed on retail customers.
How much would electricity prices rise to look after fossil fuel donors? Last week, an analysis by the Institute for Energy Economics and Financial Analysis suggested the windfall could be between $2.9-6.9 billion. That translates into an increase in ordinary household electricity bills of between $182-430 a year.
As Giles Parkinson pointed out at RenewEconomy, the development of CoalKeeper and delays in investment in transmission means much-needed additional investment in new projects has dried up — the very opposite outcome to the purported goal of the PRRO.
How have coal and gas companies been able to push a massive subsidy onto the political agenda at a time when the rest of the world is dumping fossil fuels and trying to accelerate emissions reductions efforts? By capturing key stages of the political process. Let’s run through it:
Donations
Trevor St Baker’s Delta Electricity is a strong supporter of the PRRO, and he is a long-time Coalition supporter and donor. He purchased the coal-fired Vales Point power station — which will be a major beneficiary of CoalKeeper — for just $1 million from the NSW government under a sale process overseen by Kerry Schott, who is now the head of the Energy Security Board that is driving the CoalKeeper proposal.
Gas producers Santos and Origin, who will both indirectly benefit from propping up gas-fired power generators beyond their commercial lives, are big donors: Santos has handed over $1.8 million to the Coalition in the last 20 years; Origin — which this week changed its position and endorsed the PRRO — has handed nearly $500,000 to the Coalition.
Chinese-owned coal-fired power operator Energy Australia, another supporter, has given around $140,000.
Coal miners, which will also indirectly benefit, have given around a million dollars to the Coalition in donations.
Remember, donations don’t just buy gratitude — they buy access to ministers at fundraising events.
Staffing
Some of the government’s senior figures come from the fossil fuel industry. John Kunkel, who heads Scott Morrison’s office, previously worked for Rio Tinto and was a Minerals Council executive. Another of Morrison’s senior advisers, Brendan Pearson, was Kunkel’s boss at the Minerals Council; both were there at a time when the Minerals Council’s advocacy for the coal industry was so aggressive that BHP, fearing reputational damage, forced Pearson out.
Santos has also regularly employed an array of former Coalition staffers, with at least one shuttling between Santos and staffing roles and back again.
Policy development
Morrison has also outsourced energy policy to fossil fuel industry executives. He appointed Nev Power, an oil and gas firm director, to head the National COVID-19 Coordination Commission, along with Energy Australia’s Catherine Tanna, with advice from Aramco board member Andrew Liveris. The commission’s work formed the basis of Morrison’s “gas-led recovery” plan.
Morrison appointed former Santos head Grant King to review the Emissions Reduction Fund, which King recommended be expanded to fund carbon capture and storage, and then appointed King to the Climate Change Authority with another Santos executive, Susie Smith.
Energy Security Board member Clare Savage, the chair of the Australian Energy Regulator, is a former EnergyAustralia executive and staffer at the Business Council, which has tried to sabotage every major climate action policy of the last decade.
The fossil fuel industry has been able to stymie effective climate action at the federal level through buying policy outcomes, placing its people inside government and shaping the policy process. But it stands on the cusp of an even more impressive achievement: not merely will it continue to prevent any climate action, but it will bill households billions to continue pumping out greenhouse emissions.
Rarely has the pervasive soft corruption of Australian politics produced a bigger windfall.
The only question I have is “Where’s the Labor Party?”. Once upon a time it was an opposition party, once upon a time it was even a government that seemed committed to addressing climate change. Now, under Albanese it’s LNP-Lite, desperately trying to keep fossil fuel industry onside and the relative handful of miners from getting upset. Labor’s resources spokesperson, Madeleine King virtually indistinguishable from Angus Taylor in her defence of Australia’s gas industry and the opening up of new reserves, like the Beetaloo basin.
The Opposition currently lives in fear of Joel Fitzgibbon.
If you can call that “living”.
Afraid to die on its feet, too lazy to live on its knees, Labor lies (sic!) in the bed it has made.
Lying being the operative word.
When you control the majority of media outlets politics is easy, tell the punters what you want them to hear.
It isn’t possible to have an effective opposition to neocons until there is more balance in media ownership.
But then you all know that anyway.
Sorry, Peter, they learned their lesson with the last election. It will be another generation before an opposition comes up with policies that have a longer term outlook for Australia, or a willingness to challenge the status quo – and like Shorten and Hewson, whoever leads that fight will probably also be punished by the Australian electorate.
Yes Kevin T , Labor was rewarded for its progressive forward looking agenda,fully costed ,by going backwards 1 percent in the 2 party preferred cote and being crushed in Queensland.The critique of the current Labor party should also include a critique of how venial and short sighted voters are
Sorry, I’m not clear how ‘soft’ corruption differs from any other kind. Is it soft if the LNP/IPA does it and therefore of no interest to the courts or police?
A futher question: how much ‘soft’ corruption is now permissable amongst our worthy politicians? Are they allowed one go a year? If so Schmorrison’s crew is way over their allocation.
The lawyers will tell you the soft kind is the same as the other.
Journos and cops make the distinction… for certain payees, it is “soft”, not prosecuted.
Will they? Maybe you need to talk to better lawyers. The distinction between hard and soft is generally that hard corruption is criminal and can be prosecuted if evidence is found, so for example handing an official a brown envelope stuffed with cash in exchange for a decision or action could, if proven, result in prosecution of the official. Soft corruption in contrast might involve someone donating to a party or candidate, attending fund raisers, developing a personal relationship, getting substantial benefit or profit from decisions or actions when that party or candidate is in office and perhaps later, when the one-time candidate leaves office, placing her/him in a well-rewarded sinecure. There’s nothing illegal about any of it, despite being ethically identical, and it can all be done in the open.
The distinction is not made by journos and cops. It is made by the laws of the land, which happen, by a remarkable coincidence, to be made by the same politicians who do so very well out of them.
these bastards need to be in gaol for crimes against humanity – ffs!
I’m still waiting for my annual windfall of $550 promised by Tony Abbott after he ‘axed the carbon tax’. Taylor can deduct his new rort from the outstanding balance owed to me from the Abbott era.
It is the LNP version of a Carbon Tax – a tax by stealth on all the people of Australia, but unsurprisingly not on corporate polluters domestic or international – what a twist, from some very corrupt individuals. Smirk will be unbearable to hear and watch today.
Except this tax is to keep producing carbon dioxide.
This carbon tax WILL raise electricity prices.