Nick Xenophon*, as he said he would, shot down FuelWatch in the Senate today. Good riddance.
Despite Labor’s claims to the contrary, it would in fact have likely caused average prices to rise, not fall, according to the ACCC and various other economist commentators. Yes, part of the justification was price stability, but apart from annoyance value, what was the problem with spot prices?
FuelWatch was effectively a price control. Price controls are, in general, a bad idea. They don’t work well at producing their desired outcome, and usually have hard-to-predict knock-on effects that negate some if not all of the purported gains.
Prices are too important for the smooth functioning of the economy to be stuffed around with. If anyone is concerned with some side-effect or another of market prices, the proper response is to address the side-effect directly, not to mandate a supposedly more beneficial price. That represses the signalling function of prices, meaning inefficiency and waste and malinvestment and imbalances that can correctly sharply and damagingly. Hands off, people.
* Does that mean he’s called Nick the Stranger? Nick the Alien?