Prime Minister Anthony Albanese should call an election now. It is plainly in the national interest to do so.
Normally, you would think, the party out of power has no power. Unfortunately, this is not the case. In Australia, Opposition Leader Peter Dutton has exercised damaging power from without right now.
He has announced that, if it wins the next election, he will withdraw much government support for renewable energy and will pour billions of dollars of taxpayer money into nuclear power and abandon existing interim targets towards net-zero carbon emissions by 2045.
Rational investors in renewable energy have to factor in the risk that the Opposition will win government causing lower returns on their investments. It will incline them to withdraw projected investment in Australia and take their money elsewhere.
The longer Dutton has to dupe voters, the greater the risk will become.
The Clean Energy Investor Group represents 18 major overseas and local investors with $38 billion invested in 76 renewable energy assets in Australia. It said on Thursday that Dutton’s statement “raises unprecedented sovereign risks” to their investment. Investors would have to “reassess their positions”.
Importantly the investors are telling us that the mere fact that the leader of the alternative government is putting up this plan creates the sovereign risk, not the implementation of the plan itself.
Of course, the plan is so economically irresponsible and pie-in-the-sky that its chances of fulfilment are almost negligible. Voters won’t stand for the higher electricity prices entailed in a great-big government-owned inefficient nuclear behemoth.
But as the Clean Energy Investor Group put it: “A stable and predictable policy environment is essential for attracting and retaining the significant capital required to achieve our renewable energy targets.”
This is not a group of leftie ideologues. These are hard-headed businesses like Macquarie and the large US investment fund BlackRock.
That is why we need an election now to remove Dutton’s economically irresponsible nuclear fantasy from the national agenda before it does any significant damage to Australia’s investment environment.
Left on the table, Dutton’s tactic of saying we need nuclear because renewables won’t be enough will become a self-fulfilling one.
Without Dutton’s sabotage, private-sector investors would make the transition to renewables and net-zero workable.
Dutton does not mention another costly threat. Europe is ramping up tariffs on goods from countries that are not pulling their weight on climate change. Others will do the same thing. It will impose significant cost on Australia’s exporters.
Dutton never gives any figures when he spouts his illusory tripe. Estimates range from $60 billion (extrapolating best builds from countries with a nuclear industry) to the Clean Energy Council’s $600 billion.
He says he will put his nuclear power stations on old coal power station sites to make use of the existing grid. He says the grid requirements for renewables make it too expensive. Sounds good, but he provides no figures.
Let me give them to you. The whole existing electricity grid of 917,676 kilometres of lines and associated infrastructure is worth $84 billion. It will cost $16 billion to upgrade in the transition to renewables. About half of that upgrade would be needed in any event. So, the real extra grid cost which can be put down to renewables is about the cost of much less than just one of Dutton’s seven nuclear power stations.
The grid costs are more than covered by the much cheaper generation costs of renewables.
Dutton is a fact manipulator and a danger to Australia’s national interest. The policy is not evidence-based. It has an ulterior motive and plays on the gut reaction of voters – otherwise known as post-truth populism.
He calls Prime Minister Anthony Albanese a “boy in a man’s clothing” and a “weak” leader. Maybe Albanese needs a bit of spine and shaking into action in calling this out and saving Australia from the resulting economic damage and high electricity bills it will bring.
That is why he should not do what Labor Prime Minister Kevin Rudd did in 2009 when the Coalition, with disgraceful help from the Greens, blocked Rudd’s climate-change plans in the Senate. Rudd squibbed it. He should have called a double dissolution.
This time it would be a bizarre election. The Liberals, the party of free enterprise and states’ rights, would be fighting for a plan to pour massive amounts of government money into the government ownership of a critical part of the Australian economy and ride roughshod over any state objections.
Peter Dutton would become Australia’s most socialist Prime Minister for more than 40 years. Marx would be proud of him – the state owner of up to $600 billion worth of the means of production. Even if it is mostly a white elephant. Never mind that the taxpayer will pay the interest on the debt which will just be added to the higher energy bills that will inevitably ensue.
It is maybe not so irrational from the Coalition and Dutton’s point of view. Dutton would have duped the voters and be in power and his mates in the fossil industry would continue making profits propping up the grid strained after the withdrawal of renewable investment.
Labor does not need a silly scare campaign about safety. The argument is economic. Nuclear is by and large fairly safe. Indeed, Labor need not rule out some nuclear if and when it is proven to be economically responsible. It could even repeal the Howard-era legislation that bans it. (Yes, it was Howard’s 1998 legislation aimed at circumventing a nuclear scare campaign.)
Dutton and his National Party partners who want a cap on renewables are posing a threat to the Australian economy. Removing interim carbon commitments such as 43 per cent below 2005 levels by 2030 would, in the words of the Clean Energy Investor Group, “dampen the global attractiveness of Australia” and “Imposing a cap on renewable energy investment at this critical juncture would be a regressive policy.”
These are polite words for a wrecking ball. Australia can do without a “strong” leader who is so strong, clever and dangerous that he can dupe enough voters to go along with his plan whose real centrepiece is to continue burning fossil fuels as if there is no tomorrow.
Bring on an election before we enter another decade of destructive climate wars.
Crispin Hull
This article first appeared in The Canberra Times and other Australian media on 25 June 2024.