11 September 2024

ALAN HAYES

 

GAS and electricity companies, in particular AGL, who say that they are acutely aware of the cost of living pressures, are adamant that they are not gouging customers. This is despite AGL, a locally owned public company, turning a statutory profit after tax last financial year of $711 million. But they’re not alone – Origin, who were acquired by Canada's Brookfield and the US-based MidOcean last year, reported a rise in bottom-line profit to $1.4 billion in the year ended June 30 2024; Energy Australia (EA), which was a state-owned enterprise of the New South Wales Government until 2011, when it was sold off to Hong Kong-based energy company CLP Group, enjoyed an improvement in their earnings for the first half of 2024. Led by enhancements in performance from its generation assets and retail business, EA delivered a profit of $432 million, before interest, taxes, depreciation, and amortization (EBITDA); and Red Energy, wholly owned by Snowy Hydro (an Australian company) ‘crowed’ about paying shareholder dividends to the tune of $217.8 million.

 

Not to be outdone by energy profiteering and price gouging is Alinta Energy – who make a habit of ‘bragging about themselves’ during prime time television viewing – are no slouches when it comes to turning an obscene profit. Although the Grapevine was unable to secure figures on the company’s 2024 profit, in 2023 Alinta Energy, which is ultimately controlled by Hong Kong’s Chow Tai Fook Enterprises, saw their profit up 26 per cent to $375 million.

 

Those energy companies that aren’t Australian owned are getting fat and rich for the benefit of their overseas owners at the expense of struggling Aussies – households are becoming poorer while the ‘fat cats’ get richer.

 

So, what can be done about it? Under current legislation absolutely nothing – private enterprise autocracy continues to flourish apace.

 

If governments try to action, and reel the prices in, instead of cheaper energy prices it has the effect of raising them – consumers are punished because they dare complain about spiralling costs.

 

The fact is that energy providers, wholesale and retail, are free to charge as much as they like – price gouging and profiteering is legal as long as there is no unlawful collusion. But how do you police unlawful collusion?

 

In the 1970s the petroleum industry was caught out doing just that – colluding on price supply for the sale of aviation fuel. Essentially, what they did was all get together and decide who’s turn it would be to supply aviation fuel when the tender became due. Then the other members of the ‘private collusion club’ would tender a higher price, ensuring that everyone would eventually get a turn, and so it would go – a happy little ‘merry-go-round’ conspiracy, until the whistle was finally blown.

 

So, what guarantee does the consumer have that this type practice, to eliminate lower prices, is not being secretly played out in the energy supply industry? There is a strong motive to gouge and eliminate competition, especially since profiteering is not illegal.

 

Although there are regulations designed to prevent companies misleading consumers about the reasons for price rises, corporate greed has become a consistent factor – clearly the system to control energy supply pricing is not working.

 

With the type of system in place that allows energy companies to charge what they like, it’s difficult to complain. The ACCC will quickly tell you to submit a report to them if you believe an energy supplier is price gouging, but it won’t go any further to solve the problem. Unless there is clear evidence that you have been misled about pricing, which also includes the reasons for a price increase, nothing will be done.

 

Reporting price gouging may help the ‘watch dog’ understand what the problem is, but the overlying issue is that the rising energy prices are outside the scope of the Australian Competition and Consumer Act.

 

The Federal Government needs to act

 

With a Federal election not too far away, Albo and his ‘cowardly Canberra disciples’, instead of acting in the best interests of the nation, continue to destroy Australia’s energy and economic future as the gas and electricity price shock rages on.

 

Australia Institute principal advisor Matt Ogge said regulator fears of a shortage were “utterly absurd” given up to two-thirds of gas produced on the east coast is shipped overseas.

 

He accused the federal government of failing to stop fossil fuel giants from “price gouging” Australians by ensuring enough gas is kept onshore, even after a new industry code of conduct.

 

“The government has completely failed to solve this problem because it caved in immediately to the gas industry,” Ogge said.

 

“After the damning ACCC report a couple of years ago, which showed gas companies were ripping off Australians, they promised to do something … but the measures turned out to be useless.”

 

Victoria University professor Bruce Mountain said Australia has “plentiful gas”, but the problem is likely to get worse, with gas expected to play a bigger role in base-load electricity generation in coming decades under Labor government plans for the energy transition away from fossil fuels to renewables.

 

“This situation is going to get worse and worse as coal generation leaves the market,” he said.

 

And what about the Coalition? What do they intend to do about it in the lead up to the Federal election? Out of the blue, Ted O’Brien, LNP member for Fairfax, thought he’d have a lot to say about the alleged gas shortages and why domestic prices are skyrocketing after the Coalition was recently asked if they would secure more gas for domestic use: “We will have more to say about our energy policy in due course,” he said.

 

“What we need to do is to make sure we clear the decks when it comes to unnecessary red tape,” he said. “An increase in supply means not only do we keep the lights on but we get prices down.”

 

So, would the LNP do any better? Judging from O’Brien’s comments, apparently not!

 

Lambs to the slaughter

 

Consumers will continue to be led to the ‘energy slaughter house’ while ever our elected representatives continue to pontificate about the real impact that energy ‘price gouging’ is having upon families everywhere – it’s become the new twenty-first century cancer.

 

But who else is to blame for this corporate mentality of gouging? It’s as plain as day that working people have been paying the price for corporate greed. Australians are paying higher prices everywhere – higher insurance premiums, higher airfares, higher petrol prices, higher prices for groceries at the supermarket and, of course, higher rents and much higher interest rates thanks to the Reserve Bank.

 

But the fact is while working Australians are doing it tough, big business is raking in profits thanks to price gouging and a lack of competition. For decades the Australian economy has been dominated by ‘the big’ companies: The big energy companies, the big banks, the big supermarkets, the big mining companies, the big airlines and the big insurance companies. They are all raking in big profits off the backs of everyday Australians.

 

It all means bigger prices and bigger bills for Australians!

 

The insanity of our current ‘private enterprise autocracy’ is that the Federal Government collects more money from the Higher Education Contribution Scheme (HECS) than it does from tens of billions of dollars in windfall being raked in by the energy giants. It’s obscene!

 

Australia desperately needs to give the competition watchdog more power to deal with big business in general, so that they pay their fair share are not exploiting resources owned by every Australian.

 

This will no doubt upset big business and lobby groups, but it’s about time the ‘ price gouging gravy train’ was derailed. Energy companies, and ‘big business’ per se, cannot continue living ‘high on the hog’, while working Australians are struggling to put food on the table.

 

You don't have to be a 'Rhodes Scholar' to realise that working people have been paying the price for corporate greed. Unconscionable ‘autocratic behaviour’ of the profiteers is un-Australian and nothing less than pure acts of bastardy – it’s the type of seed, that over generations throughout the world, has fostered revolution.

 

So, why isn’t the government taking firm action to reign in price gouging and profiteering? It seems that a patriot in the Australian Parliament is as rare as ‘hen’s teeth’.

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