Last month in politics: dawn of the Albanese era
One month has passed since the Federal Election, but while the dust is still settling, the political world hasn’t waited for Anthony Albanese to get comfortable in his new seat at the head of the table.
Easing into the position and taking the time to find a groove were not options for the new Prime Minister, as Australia faced a seemingly endless onslaught of critical events and crises.
June was the month that had ‘energy’ on everyone’s lips, as each state energy minister met as a gas crisis engulfed the east coast, sparking a resurgence of coal and nuclear power conversations.
At the same time, Western Australia announced a plan to close all of the state’s coal fired power stations by 2030.
But it wasn’t just energy that got Australia talking, there were several other massive discussion points over the month.
New Labor ministry sworn in
June 1 marked the day the Albanese cabinet was sworn in at Government House in Canberra. The thirty-member cabinet includes a historic number of women and MPs from non-Anglo backgrounds, making a statement that the government will be one of progression.
Sadly for WA, this history making Cabinet only made room for one Western Australian front bencher in Madeleine King, who was sworn in as Minister for Resources and Minister for Northern Australia.
WA wasn’t ignored completely, with Member for Burt Matt Keogh and Cowan’s Anne Aly named in the Outer Ministry, while Member for Perth Patrick Gorman was sworn in as Assistant Minister to the Prime Minister.
Other appointments of significance included:
- Tanya Plibersek – Minister for Environment and Water
- Chris Bowen – Minister for Climate Change and Energy
- Catherine King – Minister for Infrastructure, Transport, Regional Development and Local Government
- Jason Clare – Minister for Education
- Senator Murray Watt – Minister for Agriculture, Fisheries and Forestry
- Kristy McBain – Minister for Regional Development, Local Government and Territories
Cost of living pain
The Reserve Bank of Australia grabbed headlines in early June, after it raised interest rates for the second month in a row, taking its cash rate target to 0.85%. The increase marked the first back-to-back rate rise in twelve years as the Australian economy continues to feel the brunt of rocketing inflation and comparatively sluggish wage growth, while company profits continue to rise.
The cash rate target is now at the highest level since late 2019, prior to the COVID-19 pandemic.
The interest rate increase was not the only concern for households, as inflation and wild weather impacted the availability and price of vegetables on the east coast.
Suddenly, the humble iceberg lettuce became a scarce commodity, while substitute vegetables such as baby spinach or Asian greens were also in short supply due to widespread floods.
To put a final nail in the economic coffin, electricity prices along the eastern seaboard started to rocket as the costs of running gas- and coal-fired plants soared, forcing energy retailers to scrap discounts and leaving households and businesses facing price hikes of up to 30%.
East Coast gas crisis
Residents in Australia’s most populous states faced an astronomical increase in power prices amid supply constraints, the failure of local coal-fired power stations and the continuing war in the Ukraine.
Gas prices have exceeded between $30 and $40 a gigajoule, a 300% to 400% increase, a cost hike which is not sustainable for many businesses and will similarly be a burden on households.
The dramatic events resulted in the Australian Energy Market Operator (AEMO) triggering the Gas Supply Guarantee Mechanism for the first time since its introduction in 2017. This mechanism forces the market to release supply and construct a plan for potential shortfalls.
On June 15, AEMO suspended the spot market in all regions of the National Electricity Market and applied a pre-determined suspension pricing schedule for each of the regions.
After eight days of managed intervention, AEMO said it was confident that its criteria for lifting its suspension was met. Full market operation was restored on June 24, although the market is likely to continue to experience intermittent supply and demand challenges.
French submarine settlement
In September last year, the Morrison Government scrapped a multi-billion-dollar submarine contract with France as a result of Australia entering the AUKUS security alliance with the United States and the United Kingdom.
The deal provides Australia with access to nuclear submarine technology, but left the Commonwealth facing significant penalties for backing out of the contract, in addition to the $2.4 billion already spent over the five years the agreement was in place.
Anthony Albanese announced he had come to an agreement with the French Government over the scrapped contract on June 10.
Taxpayers will fork out an additional $835 million in compensation to the French shipbuilder Naval Group under the deal, taking the total spend to more than $3.2 billion.
The Albanese Government claimed that figure as a win, as $5.5 billion had been previously budgeted by the outgoing Morrison regime. Prime Minister Albanese also hopes the agreement will help repair the fractured geopolitical relationship between Australia and France.
WA moves on from coal
Discussions around the use of coal to generate electricity have always caused passionate debate in Australia, particularly as the country harbours ambitions of transitioning to net zero emissions.
On June 14, after the idea of reopening some east coast coal stations to combat those states’ electricity crises was floated, the McGowan Government announced that all WA state-owned coal power stations would be retired by 2030.
The closure date of Collie Power Station was brought forward to late-2027 and the Muja D Station will now be shut by late-2029. This announcement follows the previous confirmation that Muja C’s Unit 5 will close in late-2022 and Unit 6 in 2024.
The announcement comes as the uptake of rooftop solar panels and renewables continue to force changes in the energy system in order to ensure secure electricity supply and avoid increasing power bills.
To replace the capacity provided by coal-fired power, the WA Government will invest an estimated $3.8 billion in new green power infrastructure within the South West Interconnected System that will include wind generation as well as battery storage.
About the author
Bree Liddell is Cannings Purple’s Government Relations Associate Consultant. With a broad range of working knowledge and experience writing for local members and government, Bree is perfectly placed to assist clients in navigating government processes, policy and approvals. Contact Bree.