Our leaders are worried about what’s coming. They don’t trust us enough to talk about ‘stage four’

I’m no DH Lawrence but am struck by the difficulty our political leaders have with the C-word.

COVID was something we were all in together. So we were told, more times than anyone cares to remember. But the collective scarring from that experience, instead of hardening our resolve to tackle the next crisis, appears to have left us incapable of hearing difficult truths.

You can see evidence of this in what Prime Minister Anthony Albanese and Premier Jacinta Allan are willing to tell us about the escalating global fuel crisis and more particularly, in what they are not willing to say.

The striking omission from the National Fuel Security Plan released this week is what happens next, if things get bad, and what could happen after that, if Australia’s fuel supplies become critically low.

Level three and level four, as they are known, speak vaguely of ongoing fuel supply disruptions requiring government actions. What those actions look like and what the implications are for an economy heavily dependent on road transportation and households that must drive to survive, is not clear.

They have war-gamed these scenarios. Allan and her closest advisers spent most of last weekend and all of Monday morning locked in meetings with her fellow state leaders in contingency planning. It is not breaking National Cabinet solidarity to say they are seriously worried about future oil supplies – and this was before Donald Trump’s latest musings about quitting the war against Iran without reopening the Strait of Hormuz.

They are also worried that, if they make public their thinking, we will rush out and drain our nearest bowser quicker than supermarket aisles were emptied on the eve of lockdowns.

The sad thing is they are probably right. The dystopic highways of George Miller’s Mad Max imaginings aren’t a patch on what regional Victoria and parts of Melbourne poorly serviced by public transport will look like if we start running on empty. If fuel supplies go from bad to worse, the families in the path of this crisis are the same people who were run over by the last one.

Ahmed Fahour, chair of the Premier’s Business Council, who was speaking to this column in a personal capacity, says the federal and state governments are prudent to take a softly, softly approach.

“They are being deliberately vague to not create panic and that is totally understandable,” he says. “Stage three is incredibly serious and stage four is really bloody serious. At that stage, we are preserving essential services. If we are in stage four we have got a full-blown, global crisis on our hands.”

Many businesses, like governments, are well advanced in their preparations for a full-blown crisis. “We are getting our plans ready and lining up our ducks depending where the geopolitical situation goes,” Fahour says.

The latest headline figures about Victoria’s financial position suggest the state is in poor shape to withstand the kind of economic and social dislocation that chronic fuel shortages would bring.

In December 2019, before the C-word hit our shores, the state was sitting snug on a AAA credit rating, with an economy growing at 3 per cent, inflation below 2 per cent and net debt of $40.3 billion. When Treasurer Jaclyn Symes handed down her mid-year update last December, our AA-rated state was growing at an anaemic 1.1 per cent, with stubbornly elevated inflation and the government sector $165.8 billion in debt.

This week feels like the hand-washing/elbow bumping, early days of the pandemic, when the official public health advice was geared towards helping us go about our normal lives without getting sick. It all seems naive, if not a little quaint.

Albanese’s north star, albeit expressed is a clunky negative, is to avoid what followed six years ago, when Victoria and NSW broke from the feds, closed down schools and non-essential businesses and started charting their own pandemic responses.

“What we want to do, to be very clear and explicit – we want the country to not go through what it went through in COVID,” Albanese says.

The comparison, however, is irresistible. For the first time since Scott Morrison addressed the nation in March 2020 to assure us that our pandemic preparations were hunky-dory, Albanese appeared on our TV screens at 7pm on Wednesday to deliver a calming message about fuel supplies.

The federal and Victorian governments, rather than dispense tough medicine, are handing out lollypops – free public transport, cuts to fuel excise, a suspension of the heavy vehicle road user charge and a still-to-be-finalised GST discount on fuel. We haven’t even copped a stern doctor’s warning about avoiding unnecessary road or air travel, driving slower on freeways and car-sharing to conserve fuel.

Premier Allan says there is a good reason for this.

The states pressed the feds to halve the fuel excise which, from Wednesday, should reduce the cost of a litre of unleaded and diesel by 26¢.

Leading economists argue the temporary relief to motorists is not worth the hole it will punch in government revenue and pressure it will add to inflation. Allan, in her discussions with Albanese, urged the PM to consider the knock-on impacts of leaving cash-strapped parents to chose between filling up the car or keeping a medical appointment, or food.

After Monday’s National Cabinet meeting, Allan expressed her view that Victoria’s most acute problem, right now, is public anxiety about fuel supplies and soaring prices rather than actual disruptions to fuel supplies. She argues that reducing prices at the pump, albeit temporarily, will soothe these jangling nerves and prevent some panic buying.

Devotees of John Locke or Adam Smith will be confused by the notion of reducing fuel prices to reduce demand, but there is an appealing, upside-down logic to Allan’s thinking. If Australia is still arguing three months from now about the benefit of cutting the fuel excise, it means we have avoided a much darker scenario.

Chip Le Grand is state political editor.

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