Features Australia

Customer is always right?

Nah, government knows best

21 September 2024

9:00 AM

21 September 2024

9:00 AM

Once upon a time, the notion that the customer is always right was a truism, needing no further explanation. Businesses could only thrive if they gave customers what they wanted at a good price. If the managers decided they knew better than the buyers, tears were often the outcome as customers took their dollars elsewhere.

Of course, none of this is to deny the role that advertising and other persuasive techniques can have at drawing customers to certain businesses. Most of us are suckers for a winning line, although being dudded by businesses only tends to work in the short term.

But here’s the real point: most Western governments these days simply do not believe in consumer sovereignty. Instead, they seek to influence, dictate, or even to ban consumer choices in the name of some greater good. The definition of this can vary from saving the planet to providing affordable housing; from promoting health to avoiding (assumed) self-harm. Customers are no longer always right; rather they are assumed to be stupid, ignorant, short-sighted, even imbecilic.

To illustrate my point, let me give you an example from my own state, which should now officially go by the label, the Pothole State, replacing earlier versions including the Education State and the Garden State.  But just in case you are feeling a bit smug about your own location, there are plenty of stupid policies everywhere.

Take the use of natural gas in Victoria. According to Labor’s radical Energy Minister, Lily D’Ambrosio – she only holds onto this ministerial appointment for factional reasons – gas has no role in Victoria’s energy future. Of all the state energy ministers, she is the most extreme and the most ideological. She refused to allow gas to be part of the national capacity mechanism scheme that, in theory, should provide backup for unreliable renewable energy. Her preference was to get renewable energy to back up renewable energy – go figure.

In a word, she is nuts, although my guess is that none of her utterances or policy positions are really hers. Rather they are coming from some fanatical, badly educated folk in her office or from bungling, activist bureaucrats.

From the beginning of this year, all new homes that require a planning permit in Victoria will not be connected to the gas network. This includes homes which abut the existing gas network, but that’s just too bad.  Want a gas heater, gas cooktop and gas hot water service? Bad luck. Lily has spoken and she knows what’s best. In due course, commercial buildings will also be covered by the ban.


According to her genius insight, ‘We’re ensuring Victorians aren’t locked into expensive fossil gas prices and sky-high energy bills for decades – helping them switch to efficient electric appliances that will deliver significant bill savings.’ It doesn’t seem to occur to her that if the case against gas is so strong, then there is no need for government intervention. That’s not how Western governments think these days – enforcement rather than persuasion.

Of course, in this instance, the insane policies of Victoria (but other parts of the country as well) have deterred the exploration for and commercialisation of gas, thereby driving up the price of gas to exorbitant levels (at least 3 to 4 times higher than in the US, for instance).

Dan the Man, when premier, even ridiculously included a ban on fracking in Victoria’s constitution, which can be amended by a simple resolution of the parliament. Why would he do that? Talk about performative stupidity. Even Kamala is all on board with fracking these days.

Mind you, Jacinta ‘whatever-it-takes’ Allan, current Victorian Premier, has decided to back down on the proposed ban on replacement gas cooktops because of political pressures from certain ethnic groups.  Bizarrely, however, replacement gas heating and gas hot water will still be banned, making the continuation of gas stoves an uneconomic proposition in most cases.

As for the greater good, it’s all about Victoria achieving net zero by 2045 – well, that’s if Victoria still exists as a state by then – as well as meeting the ridiculous emission reduction target of 75 to 80 per cent by 2035.

But let me step away from Victoria for a moment and talk about the federal government’s policies in respect of electric vehicles. It must be said the conversion to EVs is not going well for B1, our earnest Climate Change and Energy Minister, Chris Bowen.  Nearly all new vehicle purchases by 2030 were going to be EVs according to his early dreaming. But the sad reality for B1 is that sales of EVs have been tanking, although there has been a noticeable lift in demand for hybrid vehicles. Just recently, the Australian Energy Market Operator altered one of its key assumptions on future demand for electricity – the penetration of EVs in the market.

One minute, it was assumed that 7 million new EVs would be bought over the next decade; the next, it had lowered this figure to 4 million. Even the lower figure is way too high.

Even more tragic for B1 is the recent McKinsey study of the EV market in Australia which pointed to the close to 50 per cent of current EV owners who intend to switch back to petrol/diesel vehicles. The three key reasons given are: inadequate public charging; total costs; and range anxiety.

But when it comes to consumer sovereignty, B1 is imposing the New Vehicle Emissions Standards to insist that the sellers of cars entice more buyers in the direction of EVs and away from traditional cars. Failure to achieve the standards leads to financial penalties being imposed on sellers, setting in train cross-subsidies on price to avoid them. In some instances, petrol/diesel vehicles won’t even be offered for sale.

We are already seeing what these sorts of policies are doing overseas: large lots of unsold EVs, prices of petrol/diesel cars being jacked up and plenty of grumpy consumers. Indeed, President Biden – yes, he is still Potus – had to relent and weaken his regulations so that US drivers can still buy their preferred vehicle at a reasonable price. In the meantime, the manufacturers are turning their backs on EVs as quickly as they can.

Let’s not forget here that most EV sales in Australia are made to businesses. The egregiously generous Fringe Benefit Tax exemption of EVs is critical to this outcome. EV subsidies are highly regressive: they subsidise the better off by those on low incomes. It shouldn’t be the Labor way, but it is very often the case.

There are just so many examples of the infringement of consumer sovereignty, it’s not funny. Prefer to live in a detached home? Think again. Housing density is where it’s at, so suck up the limited choices and enjoy that shoddy apartment living. Want to eat cheese made from non-pasteurised milk – like the French do? Think again. You could die (or not). Building codes and appliance efficiency standards are other examples.

Far too many politicians these days are just interfering, bossy know-it-all types who know nothing – they take their cues from Miss Trunchbull, Miss Havisham and Iago. They kid themselves that they are doing God’s work – God defined by them, of course – but exercising power is their primary motivation. It’s probably time for us to revolt.

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