AARON PATRICK: Lights out in Parliament provided a perfect metaphor for Ley’s campaign over energy prices

Just when it seemed like the Liberal opposition was a political irrelevancy, Sussan Ley, Ted O’Brien and circumstance conspired to hit Anthony Albanese’s government where it is most vulnerable.

Wednesday morning began with an assertion by Mr O’Brien that the Government’s spending plans require a personal income tax increase over the next decade of nearly $500 billion - following a 28 per cent increase since the last Coalition government, or $5,000 a year extra for every taxpayer.

“This isn’t speculation,” Mr O’Brien told the National Press Club. “It’s right there in his own budget papers.”

The shadow treasurer’s calculation on what is essentially a decade-long inflation tax was timed for maximum impact on the day of publication of crucial inflation data. At 11.30am, news of a 3.8 per cent inflation figure for the year ended October 31 was dire for borrowers, consumers and the central bank. The prospect of interest rate cuts evaporated. Economists said rate hikes might be necessary.

Apart from driving thousands of people out of work, higher rates will do little to slow the cost of electricity prices, which increased 37 per cent cent over the past year, or housing, which rose 5.9 per thanks to the arrival of hundreds of thousands of immigrants.

Going dark

Anticipating Mr O’Brien’s speech and the bad inflation news, Treasurer Jim Chalmers provided a news outlet with an analysis that said extending the life of coal-fired power stations would raise electricity prices and cost more than $17 billion over a decade.

“This hare-brained idea from the Coalition in abandoning net zero would cost the Budget billions of dollars,” he told reporters. “It would push power prices up and it would swing a wrecking ball through investor confidence, the Budget and the economy more broadly.”

Dr Chalmers’ figures were hard to pin down. His office didn’t respond when asked for the underlying data, which would have allowed them to be versified.

Asked about the figure, Ms Ley, the opposition leader, said $5 billion has already been spent subsidising power prices. She also pointed out that State governments are underwriting the expensive equipment needed to extend the lives of coal power stations, which produce most of Australia’s electricity.

As if to illustrate her point of the fragility of a power network, lighting in the House of Representatives went out around at 2.30pm, in the middle of question time, as a thunder storm hit the east coast.

Coalition MPs jumped to their feet, switched on their phone lights and yelled at the government. In the gloom, Ms Ley held up a copy of her energy policy, which abandons the 2050 net zero-Greenhouse gas emissions target in favour of what the Coalition promises will be cheaper and more reliable power.

It would be hard to think of a more apt metaphor for the energy debate.

The cost of power

Energy Minister Chris Bowen, who was forced to defend his presidential leadership position in international climate negotiations, repeated his mantra that switching from coal power will save money.

He might be right in the long term. In the meantime, the cost of building replacement power stations, transmission lines and other infrastructure is staggering.

An official estimate from the market regulator last year came in between $592 billion to $671 billion, according to the Australian Energy Council. Which helps explain why the average annual electricity bill ranges from $1292 in Tasmania (where hydro-power is plentiful) to $2320 in Canberra (which prefers solar and wind power), according to Canstar.

Power prices function like a tax on Australians, who are now likely to miss out on what economists originally expected would be two or more interest rate cuts in 2025 and 2026.

While the government’s decision to reduce income taxes by one percentage point next year and one the following is worth $804 a year for the average worker, the cut will not cover the cost of being pushed into higher tax brackets by inflation, a phenomenon called bracket creep.

Which is why Mr O’Brien’s speech was important. He used a hypothetical mother named Jess to illustrate the economic pain being felt by many Australians. Jess is 38, married with two kids and rents an outer suburban home. Her father has Alzheimer’s disease.

“She’s angry because,” Mr O’Brien said, “if the Australian dream of home ownership is out of reach for her, then kids won’t even know that dream.”

State credit card

Jess and her husband Matt are hit by a double whammy: government-driven inflation that makes life more expensive by the month, and a government that can’t provide meaningful tax cuts because it spends more than it receives.

Mr O’Brien calculated that all government borrowing is now more than $1.5 trillion, a figure he acknowledged was too large for a regular person to comprehend. “What it really means is that our governments have taken out a credit card in Jess’ name, in Matt’s name and in the names of each of their kids in the order of $60,000 each,” he said.

The shadow treasurer’s mixing of high policy and relatable examples is a step towards rebuilding the Coalition’s damaged economic credibility.

This morning the most comprehensive study of the 2025 election reported that, for the first since at least the 1980s, the Labor Party was a more trusted economic manager than the Coalition.

The loss of leadership was devastating. Two in three voters rated an economy-related problem as their top concern, led by inflation, according to the Australian Election Study, which was compiled by political scientists at the Australian National University and Griffith University. The consequence was Labor won more seats than any party in history.

As the Government grapples with new environmental regulations, backbench pressure over gambling ads, public service costs, energy prices and interest rates, the Coalition has begun the slow process of rebuilding respect from voters.