Our leaders are worried about what’s coming. They don’t trust us enough to talk about ‘stage four’
I am no DH Lawrence, but I am struck by the difficulty our political leaders have with the letter C.
Covid was something we were all in together. We’ve been told more times than anyone cares to remember. But instead of strengthening our resolve to fight the next crisis, the collective wound from this experience seems to have left us incapable of hearing difficult truths.
You can see evidence of this in what Prime Minister Anthony Albanese and Prime Minister Jacinta Allan are willing to tell us about the escalating global fuel crisis, and especially in what they don’t want to say.
The glaring omission from the National Fuel Security Plan announced this week is what happens next if things go south, and what might happen next if Australia’s fuel stocks become critically low.
Levels three and four, as they are known, speak vaguely of ongoing fuel supply disruptions that require government action. It’s unclear what these actions look like and what the consequences are for an economy heavily reliant on road transport and households that must drive to survive.
They played war games with these scenarios. Allan and his closest advisers spent much of last weekend and all of Monday morning meeting with state leaders about emergency planning. It’s not a breach of National Cabinet solidarity to say they’re seriously concerned about future oil supplies — and that was before Donald Trump’s recent musings about abandoning the war against Iran without reopening the Strait of Hormuz.
They are also worried that if they make their opinions public, we will empty our nearest warehouse faster than the supermarket aisles were emptied on the eve of the lockdown.
The sad thing is that they’re probably right. George Miller’s dystopian highways Crazy Maximum Dreams are not a patchwork of what parts of regional Victoria and Melbourne underserved by public transport will look like if we start running on empty cars. If fuel supplies worsen, the families in the path of this crisis will be the same ones crushed in the last crisis.
Speaking personally to this column, Ahmed Fahour, Chairman of the Prime Minister’s Business Council, said the federal and provincial governments were wary of taking a soft, soft approach.
“They’re being deliberately vague so as not to create panic, and that’s completely understandable,” he says. “Phase three is incredibly serious, and phase four is very serious indeed. In that phase, we’re protecting essential services. If we’re in phase four, we’ve got a full-blown global crisis on our hands.”
Many businesses, like governments, are well advanced in preparing for a full-blown crisis. “We are preparing our plans and getting our ducks in a row depending on where the geopolitical situation will go,” says Fahour.
The latest headline figures on Victoria’s finances show the state is poorly positioned to withstand the economic and social dislocation that chronic fuel shortages will bring.
In December 2019, before the C-word arrived on our shores, the state was sitting comfortably at a AAA credit rating, with the economy growing at 3 percent, inflation below 2 percent, and a net debt of $40.3 billion. When Finance Minister Jaclyn Symes released her mid-year update last December, our AA-rated state was growing at an anemic 1.1 per cent, with stubbornly rising inflation and $165.8 billion in government sector debt.
This week feels like the hand-washing/elbow-bumping weeks of the early days of the pandemic, when official public health advice was geared toward helping us go about our normal lives without getting sick. It all seems naive, if not a little strange.
Albanese’s north star, though couched as a cumbersome negative, is aimed at avoiding the period six years ago when Victoria and NSW broke with the feds, closed schools and non-essential businesses and began planning their own pandemic response.
“What we want to do is very clear, and to be clear, we want the country to not experience what they experienced with Covid,” says Albanese.
But the comparison is irresistible. For the first time since Scott Morrison addressed the nation in March 2020 to reassure us that our pandemic preparations were very good, Albanese appeared on our TV screens at 7pm on Wednesday to deliver a calming message on fuel supplies.
Instead of handing out hard drugs, the federal and Victorian governments are handing out lollipops; free public transport, fuel consumption cuts, the suspension of the heavy vehicle road user charge and a yet-to-be finalized GST reduction on fuel. We didn’t even heed a stern doctor’s warning to avoid unnecessary road or air travel, drive slower on highways, and carpool to save fuel.
Prime Minister Allan says there’s a good reason for this.
States have pressed the feds to cut fuel taxes in half, which should cut the cost of a liter of unleaded and diesel fuel by 26 cents, starting Wednesday.
Leading economists argue that temporary relief for drivers is not worth the hole it would create in government revenues and the pressure it would add to inflation. In his talks with Albanese, Allan urged the Prime Minister to consider the knock-on effects of leaving cash-strapped parents having to choose between filling up the car, going to a medical appointment or eating a meal.
Following Monday’s National Cabinet meeting, Allan expressed his view that Victoria’s most serious problem at the moment was public concern about fuel supplies and rising prices, rather than actual disruptions to fuel supplies. He argues that lowering prices at the pump, even temporarily, would calm those jittery nerves and prevent some panic buying.
Fans of John Locke or Adam Smith will be puzzled by the idea of lowering fuel prices to reduce demand, but there’s an appealing, inverted logic to Allan’s thinking. If Australia is still debating the merits of lowering fuel duty three months from now, that means we’ve avoided a much darker scenario.
Chip Le Grand is the state political editor.
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Chip Le Grand leads our state politics reporting team. He had previously served as the newspaper’s chief correspondent and was a journalist with 30 years of experience.Connect via email.
