How timely, targeted and temporary is the energy market intervention?

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OPINION: How does the government’s energy plan measure up against the three-part test economists use to judge unusual interventions into the market?

Economists usually hate market intervention, especially heavy-handed intervention. But I’ve been calling for it in electricity and gas markets for many months.

Equally, the government was elected more than six months ago, and this problem was already obvious then. But it failed to act in the October 25 budget: it merely set out problems without providing any solutions.. That’s why the timeline for industry consultation is, erm, this week. The hard-to-avoid problem is coal. Electricity markets are a force multiplier. The way they work means that if the cost of the highest price electricity in the market comes down, then the entire market becomes cheaper.

That runs slap bang into the same problems created by the last government’s cut to fuel taxes that ran for six months from March to September.

 

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Exactly, solving inflation utilising two opposing economic forces reveals a Marxist renamed Socialist renamed Democratic Socialists renamed Labor trying without success to get as far away from the reality of economic diplomatic naivety they will always inform=real income reduced.

It only seems unusual because it’s new. In two years time it won’t seem unusual at all, and the three-part test won’t apply. It will be just how we do things.

I'm not so sure common sense and the common good are the driving forces here. Looks more like its politics, ideological agenda, factions, unions, partisanship, disagreeable partnerships with the Greens and virtue signalling. But hey.... I'm no economist.

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