Australian news straight: parliament pulled back after national cabinet reached $1.5 billion energy deal

The PM announced a four-point plan to target electricity prices

Albanians confirm what Amy Remeikis has written below – parliament will be recalled to work on the law. He said there were four components of the government's strategy. There will be a mandatory code of conduct in the gas industry, with a limit of $12 per gigajoule for 12 months – the Australian Competition and Consumer Commission will monitor.

There will then be a temporary coal price cap of $125 per tonne, “nationally targeted bill exemptions” with the Commonwealth providing up to $1.5 billion to state governments to reduce electricity bills (which will be “deflationary” rather than inflationary), and “ securing our energy future” by investing in energy transmission and capacity.

Here is prime minister Anthony Albanese giving a Covid-style news conference at Kirribilli House – watch his masked press secretary keep his distance as he holds out his phone for reporters calling with their questions.

Bruce Lehrmann's defense team adds to calls for a public inquiry

Calls for investigations have now been made in the all-party handling of the case by the police union, prosecutors and now the defense team.

Steven Whybrow, the attorney who represented Lehrmann at trial, said:

We would welcome an investigation into every aspect of this matter.

A rift between the director of public prosecutions, Shane Drumgold SC, and elements of the police force came to light this week, after The Guardian revealed Drumgold had complained to police chief Neil Gaughan about his officers' alleged behavior during the trial and investigation.

Drumgold alleged that he had experienced obvious campaign pressure to agree to the police position, which had not prosecuted Lehrmann.

He also alleged that Brittany Higgins had been intimidated by investigators and had to protect herself from contact with them.

Drumgold's allegations are being investigated by the Australian Law Enforcement Integrity Commission.

The Australian Federal Police Association described the allegations as slander and criticized the freedom of information process used to issue Drumgold's complaint.

Lehrmann has consistently maintained his innocence and pleaded not guilty to one count of non-consensual sexual intercourse.

He said no sexual activity occurred with Higgins, a fellow political officer. The trial collapse due to jury error last month left him with the presumption of innocence.

Electric bills are shrinking through lower wholesale prices and rebates

We have some clarity from officials on how things are supposed to work. Price caps will apply to gas and coal this side of Christmas.

Since these fuels help set wholesale electricity prices across national electricity markets, caps will drive spot prices lower and will ultimately benefit electricity users large and small. (Lower gas prices also help gas users.)

The increase in electricity prices this fiscal year is basically already on the bill. Next fiscal year (say July 2023 onwards) instead of going up 36% they will only go up 23% the treasury has modeled.

The average household will be $230 better off the next financial year than it otherwise would be.

Benefits will be increased if you are a household or small business who qualify for the $1.5 billion discount to be shared by Commonwealth and state/territory governments. That will vary statewide (and is no doubt a source of complaints).

It's not very clear where the $12/gigajoule price difference is coming from for gas, but there seems to be some logic for the $125/ton for black coal. That's the price generators (excluding long-term contracts) will pay for coal in 2021 before Russia invades Ukraine and distorts energy prices everywhere.

The $125/t figure appears to be the marginal price that thermal coal miners earn, so they will have no incentive to reduce production. (Global prices have been around $600/t so they've been printing money too.)

As for the effects of inflation. Well, depressing the wholesale price of electricity and funneling the money through regular allowance payments is NOT likely to drive inflation. In fact, the treasury estimates it could cut half a percentage point from inflation next (probably fiscal) year.

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