Treasurer Jim Chalmers has warned Australians, telling them to brace themselves for an “expensive winter”.
The “perfect storm” of gas shortages and mounting pressure on the cost of living is expected to be exacerbated by an expected rate hike on Tuesday, putting further strain on Australians’ wallets.
Mr. Chalmers said the new Labor government had inherited a bad deal but would work to ease the pain through targeted cost-of-living measures in their October budget.
Until then, Mr. Chalmers has written to the ACCC to find a solution to the rising energy bills caused by the gas shortage – a crisis he says has been a decade in the making.
The crisis has been partly caused by global shortages resulting from the Russian invasion of Ukraine and the previous government’s reluctance to diversify Australia’s energy network.
As a result, Australia has become dependent on aging coal-fired power generators, at least 25 percent offline, planned or unplanned, due to recent weather events.
“But your viewers should know that there’s no easy, quick fix for this, and it’s a tough situation that we’ve inherited, and it’s been brewing for a while, and it’s also now turbocharged due to a combination of factors,” he said. Mr. Chalmers to Channel 7.
“(There are) a whole host of issues that are unfortunately coming out at once, so it’s going to be a tough winter, and it’s going to be an expensive winter, and we’re in the midst of a full-blown crisis in the cost of living and electricity prices and gas prices are unfortunately part out of that pain.”
Camera Icon Treasurer Jim Chalmers has warned Australians to brace themselves for an ‘expensive winter’ in a perfect storm of conditions. NCA NewsWire/Andrew Taylor Credit: NCA NewsWire
Shadow treasurer Angus Taylor, energy minister in Morrison’s government, has resisted claims that the coalition had brought Australia to its current situation.
He said he did not believe allegations that the former government was not investing enough in renewable energy.
“If you look at the numbers and the results … we’ve seen record levels of investment in solar energy for households and renewables in general,” Mr. Taylor told ABC News.
“One of the world’s highest per capita investment rates in renewable energy sources. It must be matched by capability, which is why gas is crucial.
“We have committed to some important transmission projects.”
Camera icon The war in Ukraine partly causes pressure on electricity prices, the lack of investment in renewable energy in Australia, and the failure of 25 percent of Australia’s coal-fired power stations. NCA NewsWire/Brenton Edwards Credit: News Corp Australia
Resources Minister Madeleine King said the Labor government would look into pulling the gas trigger, which would force experts to divert more supply to the domestic market.
“Everything stays on the table. We will look into it when it comes for review in January,” she told ABC Radio.
“It needs to be legally renewed. It’s coming to an end, so we’re going to see how we can keep it up and see if it helps future gas supplies to the local market.
“The export side of this is also very important.”
Camera icon A rise in interest rates will put extra pressure on homeowners. NCA NewsWire/Kelly Barnes Credit: News Corp Australia
Australian households already staring at the barrel of higher energy bills will also feel the sting of Tuesday’s rate hike.
The Reserve Bank of Australia is expected to raise interest rates by 0.25 to 0.4 percent in the first consecutive monthly rate hike in 12 years.
That is expected to increase inflationary pressures, which Mr. Chalmers said will “get worse before it gets better”.
“It’s no use mincing words,” said Mr. Chalmers.
“Our job as a government is to ensure that, after some of this short-term emergency aid runs out, it is replaced by responsible, sustainable support for the long-term cost of living in areas such as medicine and childcare, energy bills in the decline over time and real wages start moving again.”
Taylor said the government must prevent further inflationary pressures from building up.
“The $45 billion in off-budget spending that Labor has committed to (during the campaign) is not helping,” he said.
“It’s important that governments be careful and prudent with their spending at a time when we have such strong inflationary pressures.”
