Australia should allow its petrol prices to rise if international oil prices keep moving up, says a special report in CEDA's 2006 Economic and Political Overview.
The report warns that Australia was less well prepared for the previous highly damaging 1979 oil shock because petrol prices had not been allowed to move in line with world prices in the 1970s. Governments should work to ensure this does not happen again, it argues.
The special report, Australia in a world of high-cost energy, is part of the CEDA/Fujitsu 2006 Economic and Political Overview publication. It is authored by policy expert Nicholas Gruen and energy economics consultant Kenney Lin.
The report lists four other policies that Australia should follow to ensure the economy takes the minimum amount of damage from rising oil prices (see pages 43-45 of the Overview). They include continuing to support energy research and development incentives, extending road pricing and congestion charges, and avoiding unwise incentives to manufacture large cars in Australia.
The special report find reasons for optimism about oil prices. But it also notes that economic forecasting has failed to predict the damage from previous oil price shocks, adding a layer of uncertainty to today's forecasts.
The 2006 Economic and Political Overview will be formally launched on Thursday morning at CEDA Economic and Political Overview conferences in Melbourne and Perth. They are the first of six conferences taking place over the next nine days in each of Australia's state capitals, to be attended by more than 1200 people from business, government, universities and other organisations. The report and conference series are sponsored by Fujitsu Australia and New Zealand.
For further information please contact:
John Harris
Corporate Relations Director
Phone 03 9652 8415
Email info@ceda.com.au
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