Market “Assisted”

This stupidity has turned out exactly as predicted:

The cost of converting a car to LPG soared by hundreds of dollars in just a few hours yesterday as WA motorists rushed to take advantage of windfall government subsidies.

Gas conversion specialists across WA were flooded with inquiries from motorists who were keen to book their cars in and claim the $3000 in State and Federal government payments.

The increased demand drove prices up about $200 to $2800 at most businesses, with the RAC claiming some installers were quoting a staggering $4850.

There was a waiting list before the subsidy was announced, and now there’s an even longer waiting list and the price has gone up by $2000. Great news for the guys who perform these services, a complete waste of time and money for everyone else in Australia.

Explore posts in the same categories: Business, Politics

7 Comments on “Market “Assisted””

  1. Sukrit Says:

    Someone should email Thomas Sowell about this. I do think it’d be a great example of economic stupidity to add to the next edition of his book Basic Economics: A Citizen’s Guide to the Economy. There are a few examples of American government stupidity in relation to petrol in the 2004 edition already. Some Australian ones would be great.

    Everyone should read his book, even (dare I say ‘especially’?) economists. I would go so far as to suggest people buy it as a present for everyone they know, when a present giving ocassion arises. Who cares if they’re only 5 and can’t read properly yet?

  2. Andjam Says:

    Wouldn’t the increased price will mean increased profitability, leading to more businesses engaging in selling LPG engines?

  3. Orpheus Says:

    Andjam: Yes, and then if the government decides to stop the subsidy they’ll be “destroying the livelihood of small businesses, and how will they put food on the table for their precious little kiddies, so vote NO in the LPG subsidy referendum or kittens will die”.

    Sorry, I’m still bitter about the ridiculous meddling in the economy known as trading hours restrictions.

  4. The market already had a litmus test out there: Ford make LPG falcons custom (so the bootspace isn’t lost etc) for barely any more than a standard model. Uptake of these has improved lately, but not markedly, which suggests consumers are reluctant to make such a massive leap.

    Still, when you hold yourself out as being able to divinely ‘manage down’ economic concerns for ‘ordinary’ consumers, and thereby win elections, you deserve to pay for it when things go pear shaped.

    I’m loving it from 2 angles 1) as a lefty I’ll enjoy watching the electoral damage build up and 2) as a soon to be house buyer I’m seeing the market flatten off as the long tail of several rate hikes and fuel increases filters across into my previously in-demand suburb.

  5. observa Says:

    The General doesn’t have an LPG conversion for his 2 yr old Commode, Alloytec V6 motor as we speak. Expect he and his workers to start bleating real soon. Ford are laughing here, but does anyone know about Mitsi with its new 380 in this regard?

  6. Yes. I agree with Yobbo’s analysis that subsidising people to do something that they are doing already is a waste of money. Yay for the free market.

    I already paid full price for an LPG tank and I bitterly resent other people getting theirs installed for free.

  7. Ronia Says:

    Prices is increase in the market.

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