It’s hard to campaign on a non-existent ‘big stick’, although our politics are so post-modern that anything is possible
It got a bit lost in the frenzy of Thursday, the grim final sitting day of a grim parliamentary year, but the Morrison government’s much vaunted “big stick” got whittled away to something much smaller.
On current indications, the stick is not only small, but invisible.
If you’ve missed the stick (and I can only say lucky you) let me explain. I’m talking about the divestiture powers the Morrison government has been talking up since the national energy guarantee was lost along with Malcolm Turnbull’s prime ministership.
The idea is electricity companies will, as a last resort, get broken up if they engage in price gouging. The theory behind this is companies can misuse their market power if there isn’t enough competition in a market, so intervention is required to re-level the playing field.
Some stakeholders believe there is only one divestiture actually in the offing, that’s removing the ageing coal-fired Liddell power station from the clutches of its current owners, AGL Energy – and that play is about something bigger than power prices, but let’s not digress too much.
Back to our stick. At the peak of the big stick, a government
minister was going to be the person determining which companies got
broken up, not a regulator or a court. When that plan became known,
pro-market Liberals suddenly sat bolt upright, as if they’d woken from a
nightmare, and they told the treasurer, Josh Frydenberg, that level of state intervention in a free market wasn’t on. Not in the Liberal party.On current indications, the stick is not only small, but invisible.
If you’ve missed the stick (and I can only say lucky you) let me explain. I’m talking about the divestiture powers the Morrison government has been talking up since the national energy guarantee was lost along with Malcolm Turnbull’s prime ministership.
The idea is electricity companies will, as a last resort, get broken up if they engage in price gouging. The theory behind this is companies can misuse their market power if there isn’t enough competition in a market, so intervention is required to re-level the playing field.
Some stakeholders believe there is only one divestiture actually in the offing, that’s removing the ageing coal-fired Liddell power station from the clutches of its current owners, AGL Energy – and that play is about something bigger than power prices, but let’s not digress too much.
So Frydenberg adjusted the package. The federal court, not a minister, was to be the decision maker (after a series of procedural steps), and the package would sunset in 2025. Some Liberals remained unhappy, but MPs dutifully held their noses and ticked it off, despite not having seen the legislation, which was being drafted at a million miles an hour.
The bill made its way to parliament just as all hell was starting to break loose late on Wednesday evening. Scott Morrison had twigged he was on the verge of losing a vote that would be interpreted by pitiless scribes as a de facto no-confidence motion in the government given there were historical precedents to point to, and Labor was also setting up its foray on the encryption bill to try to extend the sitting hours in the House.
That game of chicken rolled on into Thursday. Given what was coming down the pipe, the energy bill was about to get massively crunched.
Frydenberg had lined up the necessary crossbench votes to get the package passed, votes that were necessary given Labor had decried the proposal as a bit of rancid populism, and refused to touch it. The Centre Alliance MP Rebekha Sharkie declared herself for it, as did the Tasmanian independent Andrew Wilkie.
Bob Katter was also in the cart. Well, mainly. Katter wobbled when he thought the package might lead to privatisations of power generation in Queensland. Before that wobble, anticipating drama and sudden reversals, Frydenberg shadowed the maverick Queenslander around the chamber like a genial sheepdog.
So everything appeared to be in alignment, no Liberals crossing the floor and the necessary additional votes locked down. But then Labor unleashed a back-pocket procedural trick that slowed debate to a crawl, and then everything was subsumed by the big power play of Thursday. The House rose without having voted on energy.
Up in the Senate, there was more procedural mayhem. The package was referred off to a Senate inquiry reporting on 18 March, which is a bit of a problem if the parliament is scheduled to sit for only five minutes before next May. The truncated sitting reflects the Coalition’s managerial difficulties now it doesn’t control the play in either chamber.
So if the Senate committee report on the bill doesn’t hit the decks until late March, that means the only opportunity the government will have to pass the legislation is budget week, in early April.
Assuming we make it to budget week (and I have my doubts we will), that week will be absolutely jam packed, given it will be the last parliamentary week before we head to the polls.
If you do the bare minimum of due diligence in the Senate to assess the prospects of passage, here’s the sitrep. Labor is opposed. The Greens are perhaps not opposed, but have conditions the government won’t want to cop.
Then there’s the Centre Alliance, sitting, ready to throw a small bomb into the Coalition.
The Centre Alliance senator Rex Patrick says he’s supportive of a divestiture power, so much so that he wants it to apply right across the economy. Patrick has his eye on supermarkets. A divestiture power would be a “great deterrent” to Coles and Woolworths misusing their market power, Patrick says.
Some Nationals have long fantasised about having that tool. This debate inside the junior Coalition partner stretches back at least two decades. But the Liberals and the business community would go ... how can I say this politely? Absolutely ballistic. There would be rioting in the boardrooms.
So where does this leave us?
With a high probability that this controversial power will never see the light of day. This is a bit of a hiccup for a government that clearly wants to campaign on the “big stick”; that in fact needs the big stick to map out the big contrast between itself and its opponents.
In the Coalition’s mind, that contest looks like this. The Morrison government is on the side of consumers battling high power bills. Labor has sided with the nasty energy companies and doesn’t care whether or not you can afford to turn on the air conditioner. It’s one of those binaries sound bite politicians live for, even though I strongly suspect that voters find them tiresome, having heard a version of them a million times.
But it’s a bit hard to campaign on your “big stick” when it doesn’t exist.
It’s not impossible of course. Our politics are so post-modern anything is possible.
You can obviously campaign by hollering at your opponents for their refusal to give you your “big stick”. Go to town. But in so doing, you run the risk of hanging a lantern over the fact you can’t implement your own agenda, which reminds voters you can’t implement your agenda in large part because you’ve squandered your own political capital, mostly, it must be said, on botch-ups.
If things get desperate enough, if an escalation is required to conceal a setback, perhaps Morrison could pull on a royal commission into the power companies. The sector has wondered about the limits of whatever it takes between now and the next election, whether there are any limits.
Some in the government were weighing up a royal commission as an option a few months back, but dismissed it in favour of trying to get a practical outcome.
Some remain firmly of the view that the government won’t go there, that it’s big stick or bust.
But if you can’t get the practical outcome you seek, and disaster is bearing down, what, pray tell, does a thwarted government do next?
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