Latest / The Morning Edition / Is it really time to panic about petrol supply?

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Is it really time to panic about petrol supply? · The Morning Edition

0:01
S1: I'm Jacqueline Maley, and you're listening to Inside Politics from
0:04
S1: the Age and The Sydney Morning Herald. This week we're
0:08
S1: going to talk about the enormous global volatility the government
0:11
S1: is dealing with, courtesy of the war on Iran and
0:14
S1: whether or not we need to be worried about things
0:16
S1: like our fuel supplies, amongst many other things, like the
0:19
S1: interest rate rise that the reserve Bank handed down this week.
0:23
S1: I am joined by my usual podcast pal, our chief
0:26
S1: political correspondent, Paul Circle. Paul, welcome from Canberra.
0:29
S2: Good morning Jack.
0:33
S1: Paul, British Prime Minister Harold Macmillan liked to say that
0:36
S1: events were the thing most likely to perturb prime ministers
0:40
S1: and rock governments. And this week, the Albanese government is
0:43
S1: dealing with a few of those. Let's start with the
0:46
S1: Iran war. The strategic objectives of the war are still
0:49
S1: very unclear from the US side, but the effects of
0:52
S1: it are very evident on Australia as well as the
0:55
S1: rest of the world. The Strait of Hormuz is effectively
0:58
S1: closed for business and oil prices have gone up at
1:01
S1: the time of recording. They're hovering about $100 a barrel,
1:05
S1: us maybe a bit above. And in Australia, that means
1:09
S1: higher petrol prices, higher diesel prices and warnings of flow
1:13
S1: on effects for the price of food because of the
1:16
S1: supply of fertiliser which might be threatened. What is the
1:19
S1: government doing to deal with this potential crisis? Paul.
1:23
S2: Yeah, it's a good point on on events knocking governments around.
1:26
S2: This is the second event in the space of a
1:29
S2: few months that's really jolted this government after Bondi in December,
1:33
S2: really upended their summer planning and their preparation for the budget. Uh,
1:37
S2: just when they moved on from that, they've been struck
1:40
S2: by a huge international event that has, um, again, caused
1:45
S2: re-evaluation of their plans and priorities and timings on things. Uh,
1:49
S2: the last two weeks has been a really intense period
1:52
S2: for the cabinet. There's been national security, uh, committee meetings
1:57
S2: of cabinet nearly daily. And the main response from the
2:01
S2: government has been some pretty speedy changes to our air
2:05
S2: fuel infrastructure. So the first decision was to release about 20%
2:11
S2: from memory of our fuel reserves, which do not meet
2:15
S2: international standards but are still quite significant. We've never tapped
2:17
S2: into them before, and so that was an attempt to
2:20
S2: calm down the sense of panic in the community to
2:23
S2: say there is a stockpile. It is being pushed out
2:27
S2: into the regions we see on Thursday morning. The IEC
2:30
S2: is now taking action against all the major retailers because
2:34
S2: of the lack of supply and increase in price in
2:38
S2: the early days of this crisis. And the second thing
2:40
S2: the government did was reduce the sulfur limits that are
2:46
S2: allowed to be sold in fuel in Australia, which allows
2:49
S2: dirtier fuel, which we'd previously blocked to come into the
2:52
S2: country to also increase supply. And after about a couple
2:55
S2: of weeks, the Prime Minister decided that a national cabinet
2:58
S2: meeting was required.
2:59
S3: Since the conflict Began a fortnight ago. My government has
3:04
S3: been working to protect Australians from the effects of the
3:08
S3: Middle East war. Today, the Commonwealth has appointed Anthea Harris,
3:13
S3: who joins me here as the Fuel Supply Taskforce coordinator,
3:18
S3: to support coordination across governments and sectors.
3:21
S2: And supply chains are will be appointed to ensure that
3:25
S2: not just fuel, but chemicals and plastics and fertilisers, which
3:28
S2: could have serious effects on the construction, food, medical sectors
3:33
S2: in coming weeks. If this conflict plays out to try
3:36
S2: and get really quick coordination between states, industries, peak bodies
3:40
S2: in a similar way that we saw during the Covid pandemic,
3:43
S2: and some of the lessons there on speedy responses have
3:46
S2: been enacted in the last couple of weeks.
3:48
S1: I love I love the appointment of a czar. We
3:50
S1: haven't had any czars appointed in Australia, I don't think ever.
3:53
S1: Certainly not in my living memory. Um, but you know,
3:56
S1: it's time. The coalition has criticised the Prime Minister and
3:59
S1: his energy minister, Chris Bowen, for not responding fast enough
4:02
S1: to the problem. Being blindsided or maybe not taking the
4:05
S1: problem seriously. Chris Bond's been very much at pains to
4:08
S1: reassure people that at the moment it's not a supply problem,
4:11
S1: it's a demand problem. So people are basically panicking and
4:14
S1: stockpiling petrol and diesel where they don't need to. Do
4:17
S1: you think the criticism from the coalition is fair that
4:20
S1: that this has blindsided them? They're a bit on the
4:22
S1: back foot with this.
4:23
S2: Yeah, I think if you look at the the coalition attack,
4:27
S2: there's not a huge amount of detail on what measures
4:30
S2: the government has taken that they disagree with or policies
4:34
S2: that the coalition thinks the government should have proceeded with,
4:36
S2: that Labour is not themselves done. It's a kind of
4:40
S2: vibes based argument that the government was slow to take
4:42
S2: this seriously, and the basis for that claim is that
4:45
S2: in the first couple of days of the last sitting
4:48
S2: week in Parliament, which was last week, on Monday and Tuesday,
4:51
S2: you saw a few Labour ministers, Chris Bowen, being one
4:54
S2: who were emphasising the right wing conspiratorial element of the
4:59
S2: community sentiment, which is that Chiefly being put by one nation,
5:04
S2: which was that fuel was not actually entering Australia. So
5:06
S2: you saw Tim Ayres in the Senate and Chris Bowen
5:08
S2: in the lower House, and in public comments from various
5:10
S2: ministers dismissing this idea that there was no fuel coming
5:14
S2: into Australia. I think one of the Labour members in
5:17
S2: the upper house called the opposition tin foil hat, whereas
5:20
S2: for pushing this claim and their right to say that
5:22
S2: claim is wrong, fuel has been coming into the country
5:25
S2: and the supply problem has not hit yet. But because
5:28
S2: of the panic in the community and the huge increase
5:30
S2: in demand, there were outages and shortages in certain parts
5:35
S2: of regional Australia and in some outer metropolitan areas as well.
5:38
S2: So there was a problem that the community could see
5:41
S2: with their eyes when they rocked up to a servo,
5:44
S2: and it took a few days for the government to
5:47
S2: meet the community where it was. I think there's a
5:49
S2: fair argument to that effect to just acknowledge that, yes,
5:53
S2: while supply is still coming in, there was a problem
5:56
S2: and the problem could get worse. So I think that
5:59
S2: initial pugilistic, maybe tone deaf posture from the government allowed
6:06
S2: the opposition. This talking point that labor was too focused
6:10
S2: on the city's lack touch with regional and outer suburban voters,
6:14
S2: and was not serious about an issue that was in
6:18
S2: part caused by a long running concern about Australia's stockpiles,
6:22
S2: which was which have not been boosted by either Labor
6:26
S2: or Liberal governments.
6:27
S1: Yeah. So I want to ask you about that in
6:30
S1: a minute. I mean, I guess I feel this responsibility
6:32
S1: as well. And, you know, in the media that although
6:35
S1: we're reporting on it, we need to report on accurately.
6:37
S1: And as you say, there is no supply problem at
6:40
S1: the moment and there's no reason for people to be stockpiling.
6:43
S1: So you don't want to sort of foment panic, but
6:46
S1: at the same time. Yeah, it's an issue and it
6:48
S1: doesn't look like it's going anywhere. It's impossible to see
6:51
S1: an end to this war at this point. It might
6:53
S1: come next week. It might really not. Questions are being
6:57
S1: asked about Australia's resilience capability. So that is kind of,
7:00
S1: you know, from an economic standpoint that means like how
7:03
S1: much oil we have stockpiled, our ability to provide food
7:05
S1: for ourselves. The supply chains get disrupted. Basically, our ability
7:09
S1: to be self-sufficient as a nation, if global trade and
7:13
S1: just global cooperation more generally were to break down. And
7:16
S1: this is something that people on the sort of the
7:18
S1: right wing have been talking about for quite a while,
7:21
S1: people like Andrew Hastie about having sort of industrial sovereignty,
7:26
S1: and some government ministers are now saying that the former
7:29
S1: Liberal government under Scott Morrison, did a really bad job
7:33
S1: at this, really bad job at resilience planning. And then,
7:36
S1: of course, the coalition is saying, well, the Albanese government
7:39
S1: doesn't seem to have a plan for it either. So
7:41
S1: what can we sift through all of that blaming to
7:44
S1: what is the truth?
7:46
S2: Well, on the on the specific point of the fuel reserves,
7:49
S2: which have been below international standards for a long time,
7:53
S2: it's a bipartisan failing. And Chris Bowen has made the
7:57
S2: point this year that Angus Taylor, when he was energy minister,
7:59
S2: faced calls to increase the stockpile. Bill shorten had a
8:03
S2: policy in the 2019 election, one of the many Bill
8:06
S2: shorten policies that never came to life to drastically increase
8:10
S2: the fuel stock. The coalition at the time opposed that
8:13
S2: policy and said it would cost between 10 and $20 billion.
8:16
S2: So again, this is one of those policies where in
8:19
S2: a time of absolute crisis, it becomes apparent how how
8:22
S2: necessary it is. But when you're out of crisis, you
8:25
S2: look at that price tag and we're in a tight
8:27
S2: fiscal position and you think, is it really worth it?
8:29
S2: There were two interesting interventions, I thought on Wednesday from
8:33
S2: Labour ministers on this question of national resilience. In the morning,
8:37
S2: the Prime Minister, at a speech, I think it was
8:38
S2: in Melbourne at a car dealers association, said that the
8:42
S2: Hawke-keating reforms, you know, which so many commentators and more
8:46
S2: old school politicians, uh, yearn for, were driven by a
8:52
S2: sense that Australia needed to open up to the world,
8:55
S2: that we were too insular, that the shackles needed to
8:58
S2: be taken off the Australian economy. It was a time
9:00
S2: of economic liberalism, free markets, Thatcher, Reagan, the Prime Minister
9:04
S2: said that productivity and and economic security questions at this
9:10
S2: moment require different solutions. He said, we're not in the
9:13
S2: Hawke and Keating era.
9:14
S1: Well, just the downside. Risks of open, open markets and
9:17
S1: global trade are really showing themselves as that global order.
9:20
S1: I mean, you need it's like any relationship. You need
9:22
S1: trust and you need reliability for those systems to run.
9:25
S1: And trust and reliability on the international stage is is
9:28
S1: breaking down before our eyes, it seems.
9:31
S2: Yeah. And I'll just on that point, just mention Tim Ayres,
9:34
S2: the industry minister who's a former unionist, spoke at a
9:37
S2: conference in Melbourne as well on Wednesday night and said
9:40
S2: that this really three decade long push for efficiency, which
9:45
S2: you saw exemplified in Australia over many decades by the
9:49
S2: Productivity Commission, regularly suggesting that subsidies to industries like the
9:54
S2: car industry were not worthy, that, you know, the production
9:58
S2: of Australian metals and chemicals and fertilisers and all these
10:01
S2: other things, because they're more expensive to make in Australia
10:04
S2: than they are in China and other places are not
10:06
S2: worthy of continuation. He said that that type of politics
10:10
S2: is not fit for purpose, that industry policy in an
10:13
S2: old school sense that we saw, you know, pre Hawke
10:16
S2: and Keating was now back in vogue because there was,
10:20
S2: in his view, a growing realization that Australian industry is
10:24
S2: also critical for national security. So there's a tide change
10:27
S2: and you'll still have economists say that that money's not
10:29
S2: worth spending. So the tension won't go away. But there's
10:32
S2: a change in thinking here. And as you say, it's
10:34
S2: also put forward by liberals, including Andrew Hastie, who are not, um,
10:39
S2: old school free market liberals.
10:40
S1: Yeah. I just want to pivot to the home front
10:43
S1: because we've got some action here too. On Tuesday, the
10:45
S1: reserve Bank delivered pretty bad news to a lot of
10:48
S1: people when it put up the cash rate to 4.1%.
10:51
S1: And that's an interest rate rise that all the major
10:53
S1: banks said they would pass on. It's bad news for
10:55
S1: anyone with a mortgage, obviously, but it's also bad news
10:58
S1: for the government because there is persistent criticism that inflation
11:02
S1: is running high because the government is spending too much
11:04
S1: public money and basically pumping the economy full of too
11:07
S1: much money that it can't work through because of capacity constraints.
11:12
S1: And the RBA governor, Michele Bullock, also didn't rule out
11:16
S1: the prospect of recession. I mean, the headlines all sort
11:18
S1: of said that she warned of the risk of recession.
11:21
S1: I didn't quite see it as that. But she basically
11:23
S1: conceded that it might happen and they would deal with
11:25
S1: it if it did. What did Treasurer Jim Chalmers have
11:28
S1: to say after that reserve Bank decision, which was a
11:30
S1: bit of a sort of cream pie in his face?
11:34
S2: Yeah, yeah, I think you're right on the reading of Bullock.
11:37
S2: She didn't explicitly go out to warn of a recession.
11:39
S2: She was answering a question and she kind of said,
11:41
S2: it's not in her control. Which which it isn't. Well,
11:45
S2: at least not fully. Jim Chalmers is trying to prepare
11:49
S2: for what is his biggest budget as treasurer. It's, I think,
11:53
S2: his fourth.
11:55
S1: Yeah. Which defies the numbers because they sort of they
11:57
S1: gave us an extra budget in there.
12:00
S2: Yeah. That's right. There's more budgets than there are years
12:02
S2: of this government. That's right. And this this rate rise
12:06
S2: comes at a critical time. Chalmers is trying to lay
12:10
S2: the groundwork for a big tax reform budget. He is
12:13
S2: looking at doing negative gearing, capital gains tax changes potentially
12:17
S2: changes to trusts. They haven't landed on which formulation or
12:21
S2: combination of these changes they'll put. But the IRC is
12:24
S2: debating them as we speak. And if you look at
12:27
S2: the last few weeks, as well as including the rate rise,
12:30
S2: there's a there's a war on inflation might tick above 5%.
12:35
S2: If you look at the most serious Treasury forecast that
12:38
S2: Chalmers released on Thursday. So there's a new, much more
12:43
S2: precarious economic environment that Anthony Albanese is confronting a more
12:47
S2: fractious electorate, a dampening of of the already not very
12:53
S2: enthusiastic mood among consumers. And so Chalmers is laying the
12:57
S2: groundwork for a big reform budget where he wants to
12:59
S2: try and rein in spending, which has been accused of
13:02
S2: letting run rampant over the last four years, and he
13:05
S2: also wants to do some major changes around intergenerational equity
13:08
S2: and tax. The Prime Minister is famously pretty cautious about
13:12
S2: putting big changes to the electorate. If there's a low,
13:15
S2: lower inflation environment, no war going on, you might assume
13:19
S2: that's a more palatable time to put some big changes
13:23
S2: to the electorate to make the case. But Chalmers on
13:25
S2: Sunday made a really interesting comment. He said the new
13:28
S2: international environment, the prospect of higher rates means that only
13:32
S2: gives us more impetus to act. We need to make savings.
13:36
S2: We need to make big changes to get the economy
13:38
S2: fit for purpose. So effectively the message from Chalmers to
13:41
S2: the PM is don't let all this scare you off.
13:44
S2: Let this drive even an even stronger reform appetite.
13:48
S1: Yeah. So that I mean, that's really interesting because as
13:51
S1: you say, it's kind of counterintuitive when everything is so
13:53
S1: crazy globally. You might think, well, look, we just won't
13:56
S1: change the settings very much. But Chalmers is basically, I'm
13:59
S1: not going to waste this crisis. I'm going to, um,
14:02
S1: use it to, to cut the budget and also to
14:04
S1: push through these reforms that I want. I just wonder,
14:07
S1: I mean, so much of the pre-budget reporting and all
14:10
S1: these speeches that they roll out like Chalmers has got
14:13
S1: an important pre-budget speech he's giving today on Thursday, as
14:16
S1: we record. How much of it is sort of like messaging? Well,
14:20
S1: so it's all messaging, but we might also call that
14:23
S1: government spin. We might also say that, you know, Jim Chalmers,
14:26
S1: it's very much in his interest to position himself as
14:28
S1: someone who's going to be tough and he's going to
14:30
S1: make tough decisions and, you know, cut spending because Labor's
14:34
S1: big economic vulnerability is that they have been spending too much.
14:38
S2: Totally. But I think having now embedded this message so
14:43
S2: firmly in the public mind that this will be finally
14:46
S2: a truly frugal budget, ministers are getting lots of requests
14:50
S2: knocked back at IRC. They say they've never faced a
14:52
S2: process that's been so restrictive. Having said that argument up,
14:57
S2: if the government doesn't match match up to it, they'll
15:00
S2: face severe criticism. So you would think that Chalmers is
15:04
S2: only making these arguments because he knows the path the
15:07
S2: government is going down. But the extent to which he
15:09
S2: delivers will be only be able to be judged on
15:12
S2: the day.
15:12
S1: Yeah, yeah, it's going to be really interesting budget in
15:15
S1: that sense, because they're not going to be able to
15:16
S1: give away many goodies, even the rollbacks in tax cuts
15:20
S1: that they're going to make. So they'll, you know, be
15:21
S1: be adding to government revenue if they cut the capital
15:25
S1: gains tax discount, for example. That's the coalition is going
15:28
S1: to come back and say, well, you're just adding to
15:30
S1: the tax burden of Australians. You're putting up taxes and
15:33
S1: they're not going to be able to say, yes, we're
15:35
S1: you know, we're cutting this tax perk, but we're recycling
15:37
S1: it back to the broader community through income tax cuts,
15:40
S1: which is what they've been able to do in the past.
15:43
S1: I do want to ask you about the coalition. So
15:46
S1: how is the coalition sort of showing up in all
15:48
S1: of this? We haven't really checked in on Opposition Leader
15:52
S1: Angus Taylor since he won the leadership a few weeks ago.
15:56
S1: How is he sort of able to cut through with
15:58
S1: this when there's so much noise? How do you think
16:00
S1: he's going in his communication?
16:02
S2: Well, on his communication, just firstly, he's he's been he
16:06
S2: spent his first few weeks really in a in an
16:09
S2: Abbott style mode of message repetition. He was far more
16:13
S2: slogan driven than we saw under his predecessor, Sussan Ley,
16:17
S2: and his key message was The Liberal Party is here
16:19
S2: to restore living standards and protect Australia's way of life.
16:24
S4: And my top priority as a new leader and Jane's
16:26
S4: as well, is to protect Australians way of life and
16:29
S4: to restore their standard of living.
16:32
S2: And the latter being a reference to Islamic extremism. The
16:35
S2: ISIS brides bolstering security settings post Bondi and the former
16:39
S2: being a reference to bringing inflation down and growing real
16:43
S2: living standards. In the last week, he's been a little bit, uh,
16:47
S2: a little bit out of the national debate because he's
16:49
S2: super focused on the by election. This is not really
16:53
S2: become a major national talking point yet, but it's occurring
16:56
S2: on May the 9th, I believe, and everybody in the
16:59
S2: Liberal Party knows that it's really, really important that the
17:03
S2: Liberals have a decent showing there if they're totally gazumped
17:06
S2: by one nation, it will be a humiliating exemplification of
17:10
S2: where the party's at. Um, the nationals also had a
17:13
S2: leadership change last week. And on the question of where
17:17
S2: Taylor goes next, there's a debate going on inside the
17:19
S2: coalition about the extent to which he leads the opposition's
17:23
S2: arguments in against the government on their handling of the
17:27
S2: fuel crisis. Some are keen, some in the coalition are
17:30
S2: keen to turn this into a Covid style. I don't
17:33
S2: hold a hose moment for Albanese, though. There's clearly no
17:35
S2: trigger for that yet, but they are keen to put
17:37
S2: as much pressure on the government for its response as possible.
17:40
S2: Given how long this might drag out for, but Taylor
17:43
S2: spent the first days of this week in Farah and
17:45
S2: hasn't really been putting huge pressure on Labour over the
17:49
S2: fuel issue. But that might ramp up, particularly if we
17:52
S2: start seeing shortages in key industries and if this drags
17:55
S2: on for longer, and if there's any mistake or opening
17:58
S2: for the coalition to to weaponise.
18:00
S1: Yeah, there haven't really been very many sharp attacks. Like
18:03
S1: I think they've struggled to get a handle on it.
18:06
S1: The members of the opposition that I've seen or heard
18:09
S1: criticizing the government, it seemed very diffuse terms. It's sort
18:11
S1: of like, you know, they're not good at handling energy,
18:14
S1: they're not good at handling the economy, but they haven't
18:16
S1: actually said, as you made the point earlier, like, this
18:18
S1: is what they should have done that they haven't done.
18:21
S1: So they're grappling with that a bit. And also, I mean,
18:24
S1: farrahs interesting. Like normally by elections are referendums on the government. Right.
18:29
S1: And the government's like Labor's sitting this one out. So
18:32
S1: it's really a referendum on the Liberal Party. And the
18:35
S1: only polling that I've seen, which was really early from
18:37
S1: the Australia Institute, was just between, I think it was
18:41
S1: testing the waters between the independent candidate who's sort of
18:43
S1: like a community independent and the One Nation candidate. And
18:47
S1: I think they had the One Nation candidate nudged slightly ahead.
18:50
S1: But other people have been saying it's more likely to
18:53
S1: come down to a competition between the community independent and
18:56
S1: the Liberal candidate. I mean, do you have any skinny
18:59
S1: on that? Yeah.
19:00
S2: The sense among the parties involved is that it's likely
19:04
S2: to be between the One Nation candidate and the independent. Yeah.
19:07
S2: If the Liberal Party candidate can bump up into second
19:10
S2: or just behind second place, they're expected to have stronger
19:13
S2: preference flows from the other candidates. I think the the
19:16
S2: big concern and unknown about One Nation at this stage,
19:18
S2: and it will be explained to some extent in the
19:21
S2: South Australian election, which is on Saturday, is how well
19:24
S2: they go on preferences. Yeah, they might have decent primary
19:26
S2: votes in a number of seats, but if they preference,
19:28
S2: if they only draw, you know, 20, 30, 40% of
19:31
S2: liberal preferences and not many from other parties, they may
19:34
S2: fall short in some seats. So yeah, it'll be fascinating
19:37
S2: to see how it plays out. The climate 200 independent
19:39
S2: in Fara has been in the in the field for
19:41
S2: weeks and weeks longer than anybody else. They've got a
19:44
S2: lot of money and they're a well known community member.
19:46
S2: Michelle Milthorpe is her name. The One Nation candidate told
19:50
S2: our newspaper last week that he's having, you know, tens
19:53
S2: of thousands of dollars flow in from Toorak and Woollahra
19:56
S2: with people fed up with the liberals and the libs
19:59
S2: and Nats look like they were on their on their
20:01
S2: heels and pretty late to get into the race, which
20:03
S2: is a sign of the lack of organisation and decisiveness
20:06
S2: in those parties at the moment.
20:07
S1: Yeah, it's going to be really, really interesting by election,
20:10
S1: even for people who are not usually interested in by elections. Paul,
20:14
S1: that was fun. There's a lot of anxiety, I think,
20:17
S1: in the community about all of this stuff. So, you know,
20:20
S1: it's important that we put the facts out there and
20:23
S1: this kind of robust analysis. Thank you very much. I
20:26
S1: will see you next week.
20:27
S2: Thank you. Sorry, I didn't have much good news to bring.
20:30
S1: Maybe next week. Maybe everything will be much better next week.
20:34
S2: One can only hope.
20:39
S1: You can read all of our political news on our
20:41
S1: websites theage.com.au or smh.com.au. Today's episode was produced by Kai Wong.
20:48
S1: Our executive producer is Tammy Mills, and our podcasts are
20:51
S1: overseen by Lisa Muxworthy and Tom McKendrick. Before you go,
20:56
S1: follow Inside Politics and leave a review for us on
20:58
S1: Apple or Spotify. I'm Jacqueline Maley, thank you for listening.