Teals unconvinced by Dutton’s nuclear plan as Chalmers cites $4 trillion loss to economy

Independents whose votes would be crucial in a hung parliament say they are unconvinced by Opposition Leader Peter Dutton’s nuclear power plan as Treasurer Jim Chalmers said the Coalition’s costings relied on the Australian economy losing $4 trillion by 2050.

Chalmers on Sunday blasted the “economic insanity” behind the opposition’s modelling for seven new nuclear power plants, saying it assumed the economy would be $294 billion smaller and that Australians would use 40 per cent less electricity than the government’s forecasts by the middle of the century.

Treasurer Jim Chalmers accused Peter Dutton (above) of economic vandalism because his modelling assumed the economy would be $294 billion smaller than the government plans by 2050.Credit: Monique Westermann

As the treasurer declared next year’s federal election a referendum on nuclear power, the teal MPs who would be essential to a Coalition minority government, which polling indicates is Dutton’s most likely path to power, refused to commit their support to the opposition’s plan.

Their concern about the plan sets up nuclear power as a political battleground for Dutton in former blue-ribbon Liberal seats the Coalition is trying to win back, and in marginal seats held by Labor.

Chalmers said Australians would pay a hefty price under the Coalition’s “dodgy assumptions” about nuclear as he pitched Labor’s plan, which relies heavily on renewables backed by gas, storage and hydro, as more affordable and supported by investors.

“Theirs is a recipe for lower growth, a smaller economy, less energy … and it will push power prices up. This will be the contest at the next election,” he said.

The Coalition’s modelling for its nuclear energy policy, completed by Frontier Economics and unveiled on Friday, says Dutton’s plan will cost $331 billion by 2050. This is 44 per cent less than the consultancy believes Labor’s energy policy would cost, based on much cheaper nuclear plant prices than many other countries have faced.

It also assumes Australia will use 40 per cent less electricity than forecast by 2050, and it relies on millions of Australians not installing rooftop solar panels or driving electric vehicles, which is at odds with global trends.

Wentworth MP Allegra Spender said she would use her position in a minority government to push Dutton to support the existing shift to renewables, describing his proposal as a “risky plan for a poorer Australia”.

“It’s a risk to the economy because their costings are based on lower energy use and a smaller economy. It’s a risk to the climate because it increases our emissions by locking in Australia’s reliance on coal and gas for much longer,” she said.

“It squeezes out private investment and increases government spending. And it banks on fewer Australians having control over their power bills with less household solar.”

Kooyong MP Monique Ryan said voters in her electorate were bemused by plans to nationalise energy supply and stymie investment. “True Liberals – many of whom have invested in home solar and batteries, and are saving money from them – are shaking their heads in confusion,” she said.

Warringah MP Zali Steggall said she would struggle to support a policy that failed to reduce power bills and left younger generations with a significant financial burden. Goldstein MP Zoe Daniel said Dutton’s plan needed more substance before it could be properly judged.

Mackellar MP Sophie Scamps said she had “serious concerns about the assumptions and projections”, and Curtin MP Kate Chaney said she was inclined to trust the CSIRO, which says nuclear power is about 50 per cent more expensive than renewables.

Independent economist Saul Eslake said he had no ideological or environmental opposition to nuclear energy, but he was “utterly unpersuaded by the economics of it”.

“The comparison between renewables and nuclear are based on different scenarios for energy consumption. They are not a like-by-like comparison,” he said.

“The Coalition’s modelling arbitrarily assumes that overall electricity consumption will be lower by 2050, without giving reasons for that. The modelling also takes a sanguine view of the risks of delays and cost overruns with nuclear projects.

“With the exception of Olympic Games, there is no construction anywhere in the world that has been subject to bigger cost blowouts than nuclear power plants.”

Chalmers said Dutton’s plan would “vandalise our economy” as he went on the offensive on Sunday.

“What they are assuming is that the Australian economy is around $294 billion smaller by 2050, and what that means between now and then – the cumulative impact of that for Australians who rely on the national electricity market – is something like $4 trillion in lost output,” he said at a press conference.

Australia’s gross domestic product was $2.61 trillion in 2023-24, meaning a $4 trillion loss would represent 1½ years’ worth of economic output.

Shadow treasurer Angus Taylor did not engage with Chalmers’ figures when asked on Sunday about claims the Coalition’s nuclear plan would shrink the economy.

“The only people who know how to shrink this economy is the Labor Party, and they’re doing an extremely good job of it right now. Seven consecutive quarters of GDP per capita going backwards,” he said on Sky News.

Taylor said vested interests aligned with the government were “out there squawking away at the moment, as you’d expect them to”.

“But I tell you what, one of the ways we know you strengthen the economy is to ensure that the electricity costs in the economy are lower than they otherwise would have been, and that’s what this plan does. It’s a broad range of technologies in the plan,” he said.

The Coalition has not explained how its nuclear policy would reduce people’s power bills, concerning backbenchers heading into a federal election where voters are suffering from cost-of-living pressure.

But Chalmers also had to defend the government over its promise to reduce household power bills by $275 at the last election – a pledge that has not materialised.

“The figure you’re referring to is from 2021 modelling, referring to a 2025 outcome, and we’re in 2024. The most recent inflation data showed that our electricity price has come off almost 36 per cent,” he said under questioning on Sunday.

But Taylor said the government had come nowhere near its forecast. “He [Chalmers] has got 16 days for the deadline on that ... I think we can all be pretty confident we’re not going to see that,” he said.

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