Labor Wants to Help Build An Energy Consensus

25 June 2020

Originally published in the Australian Financial Review

In boardrooms right around Australia, well before most people had heard of the novel coronavirus, and now in Zoom rooms throughout the crisis itself, one issue has come up almost every time: our country’s longstanding energy policy paralysis and its consequences for business costs and investor certainty.

In boardrooms right around Australia, well before most people had heard of the novel coronavirus, and now in Zoom rooms throughout the crisis itself, one issue has come up almost every time: our country’s longstanding energy policy paralysis and its consequences for business costs and investor certainty.
 
Employers recognise that for far too long the lack of a settled energy framework had been a handbrake on growth before this recession, and now it risks hampering the recovery too.
 
The absence of a national energy policy framework is a key reason for the recent crash in renewable energy investment, with investment in large-scale projects halving in 2019.
 
In March this year, the Reserve Bank of Australia noted that “liaison with energy industry stakeholders suggests that uncertainty around future national policy direction is constraining investment”.
 
This week, Innes Willox of the Australian Industry Group added: “It’s only when you get that policy or regulatory certainty that business will be prepared to invest on the scale which is necessary to then provide us with that cheaper and more reliable power that we all need.”
 
Years of energy policy chaos have contributed to weaker investment right across the broader economy. The last national accounts before the virus outbreak showed private business investment had actually declined over the year, and on one measure was already down by about 20 per cent since the Coalition came to office in 2013.
 
Now Australia is in recession and these challenges have only accelerated. We need to find a new way to power the recovery, create jobs, and lift living standards into the future.
 
The Morrison government’s technology road map is a shopping list of known technologies but not a framework for cheaper and cleaner energy, or how it can help revitalise other industries, including manufacturing.
 
A shopping list won’t be enough to make Australia a clean-energy superpower or build new sources of growth.
 
Eighteen earlier failed policies in seven years have done more to add to uncertainty than resolve it. Then energy minister Josh Frydenberg’s inability to legislate the National Energy Guarantee last term despite Labor’s in-principle support was just one of many costly false starts.
 
It’s clearer than ever that we can and must do better to get the Parliament, employers and employees onto the same page, in the national economic interest, to put in place a settled framework for cleaner and cheaper energy.
 
This is as much about business input costs, more competitive industries, new investment and jobs as it is about the important task of tackling climate change by reducing pollution.
 
That’s why Anthony Albanese and the party's climate change and energy spokesman Mark Butler worked with other members of Labor’s shadow cabinet on an approach to Scott Morrison which proposed we meet and agree across party lines on an energy investment framework that modernises our energy system and builds confidence in the investor community, while accommodating different levels of ambition on emissions.
 
This is a genuine attempt to build consensus.
 
Peak business and environment groups have responded favourably and recognised Labor’s efforts to try to settle the partisan impasse by making some concessions around carbon capture and storage, while safeguarding the future and integrity of key renewable energy agencies.
 
Early reactions from the Morrison government have not been as encouraging, but it’s not too late for a change of heart.
 
After years of frustration, business will be disappointed but perhaps not surprised to see this reflexive partisanship rear its head once again.
 
More of the same in politics and in energy is a recipe for more of the same economic stagnation we saw in the lead-up to this pandemic; more of the same weak investment and productivity growth; and more of the same disappointing gross domestic product growth as well.
 
The threshold question is whether the best we can hope for is a “snap back” to all of this, or whether by working collaboratively and co-operatively we can emerge stronger from this crisis than we entered it.
 
For “all in this together” to be more than a slogan, we need to settle an energy framework that lowers the cost of doing business here, and gives employers the certainty and confidence they need to hire more Australian workers and create new sources of growth.
 
Without it, all the Prime Minister’s rhetoric about finding common ground will ring hollow, more people will be left behind, and our economy and budget will suffer as a consequence.
 
This opinion piece was first published in the Australian Financial Review on Thursday, 25 June 2020.