Having scoffed at power-market modelling, Josh Frydenberg drew comfort from ‘expert’ projections he finds more useful in extolling the latest, the very latest, clever scheme to keep the lights on, rent-seekers prosperous and electricity bills no higher than in 97% of the developed world
Another day, another act, another light-bulb moment in Australia’ energy circus. Perhaps the great Austrian psychoanalyst was onto something after all. Freudian slip: an unintentional admission or slip of the tongue, regarded as revealing subconscious, repressed or devious feelings.
In his Autobiographical Study (1925), Freud argued that psychoanalysis
profits by the study of the numerous little slips and mistakes which people make—symptomatic actions, as they are called […] I have pointed out that these phenomena are not accidental, that they require more than physiological explanations, that they have a meaning and can be interpreted, and that one is justified in inferring from them the presence of restrained or repressed impulses and intentions.
True. Josh Frydenberg’s slip was not in the same category as:
She: What would you like; bread and butter, or cake?
He: Bed and butter.
Nevertheless, it was instructive, revealing one of neuroses currently swirling in the body politic. Too many late nights, of course, combined with serious substance (your dollars) abuse, also affect the collective psyche, not to mention collective pocket, in the form of higher electricity bills and blackouts.
The Federal Energy Minister’s moment of truth came just one minute into his three-minute fifty-three second interview yesterday with ABC PM’s Linda Mottram.
According to the segment’s introduction, the government’s new policy includes:
a reliability guarantee requiring retailers to use a percentage of electricity from so-called dispatchable sources: coal or gas, batteries or pumped hydro. And there’s an emissions guarantee linked to the reliability guarantee. The government is touting it as technology neutral. It is adamant that households could save between $110 and $115 per year.
It all had an uncanny resemblance to that famous surrealist exhibit in Paris a century ago: the “handle-less knife lacking a blade”. Be that as it may, here is Frydenberg attempting to explain the very latest “most effective and reliable policy”.
Frydenberg: Well, this is the advice from the Australian Energy Market Operator. It is important to understand that we sought and received the best advice available. That comes from the Australian Energy Security Board, the Australian Energy Market Operator, the Australian Energy Regulator and the Australian Energy Market Commission. Their combined wisdom and advice is that Australian households will see a savings on their power bill by $110 to $115 per annum, as a result of our policy; which is a higher number than the saving [only $90, dear reader, $90] that was promoted through the [Finkel] Clean Energy Target.
[The Finkel Report claims households would be ten per cent better off over 30 years, and heavy industrial power users twenty per cent better off.]
ABC PM: OK. You’ve taken advice. But do you have modelling and can you guarantee it?
Frydenberg: “Well, that’s the analysis of the AMEC. There will be further modelling that will be undertaken. But I am familiar with the saying of John Kenneth Galbraith that: ‘when it comes to modelling, it is designed to make astrology look good’. So it always depends on the inputs to get the outputs. But certainly the advice of the AMEC is that this will lead to lower power bills because it will create investment certainty, more investment means more supply, which means lower prices.”
But how can our energy minister, clearly so cynical about the reliability and accuracy of government agency model forecasts, be simultaneously so sanguine about the alleged future savings derived, he is prepared to promote them so enthusiastically in the public domain? How, indeed? (Very courageous of him, noted Sir Humphrey.)
That the alleged savings amount to less than the heart of a peanut is another matter. As AFR journalist Jennifer Hewett commented:
The estimate from the Energy Security Board that typical household bills will fall by an average of $110 to $115 a year between 2020 and 2030 is a result that should be taken with a large bucket of salt. Any precise dollar estimate of what will happen to bills over a decade counts as an exercise in absurdity.
Such is, as Freud might have said, the psychopathology of everyday life among the sultans of spin on Capitol Hill.
Incidentally, what Galbraith actually wrote was: “The only function of economic forecasting is to make astrology look respectable.”
As for light-bulb moments, some of the economist’s other quotes also seem worthy of the Cabinet’s attention at this point in time, e.g.:
“Faced with the choice between changing one’s mind and proving that there is no need to do so, almost everyone gets busy on the proof.”
“It is a far, far better thing to have a firm anchor in nonsense than to put out on the troubled sea of thought.”
“Nothing is as admirable in politics as a short memory.”
“If all else fails, immortality can always be assured by spectacular error.”