Australia needs Sally McManus to save a productivity disaster

Australia needs the strength of Sally McManus, who is uniquely placed to save the nation from a productivity disaster linked to looming power price rises.

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Australia needs to face the fact that the 2025 Productivity Conference will be dominated by ACTU Secretary Sally McManus and her union team, just as happened three years ago.

There is no point trying to make significant changes to the industrial relations legislation. Instead, she should be recognised as being uniquely placed to save the nation from a productivity disaster linked to looming power price rises, and in the process create and save vast numbers of jobs and improve livelihoods.

A decade or so ago, for the very best reasons in the nation, both sides of politics embarked on a renewable energy campaign. The politicians and most of the community might have had the best of intentions, but it has turned out to be an implementation disaster that will leave Australia with close to the highest cost power in the developed world.

McManus will understand what that means – less well paid jobs and/or massive subsidies that will decimate our social services.

Let me put forward evidence for the looming disaster, and I invite her to do her own research, remembering that the public servants involved will seek to cover it up.

The first cost disaster was created by the Coalition – “Snowy Two”.

I was a supporter but did not realise that the Coalition plan was based on totally fictitious construction costs. It took years to discover that the nation has been misled.

The first real clue that “Snowy Three” the vast remote wind and solar schemes – duplicated the mistakes of “Snowy Two” came when Rio Tinto told us that the costs of renewable energy and coal from run down plants meant that the Newcastle Tomago aluminium smelter would be shut costing thousands of jobs.

It is unbelievable that the nation signed contracts where the promoters win from higher construction costs.

My explanation to readers was that renewable wind and solar power are costly because of the limited life of windmills and solar panels, and the fact that a second power system is required (batteries, hydro, gas etc) to cover the times when the sun does not shine and the wind does not blow. That substantially increases the costs.

What I did not realise was that the well-intentioned “Snowy Three” program had become a victim to the same inaccurate construction costs estimates as “Snowy Two”.

We can be thankful for the revelations in The Australian by former top energy executive Ted Woodley, who blew the whistle on the renewable energy rackets which suddenly have become one of our greatest single threats to productivity increases.

Woodley explains that the transmission giants put in low-cost estimates for transmission proposals to deliver the remotely generated solar and wind power to markets. The transmission lines gained Australian Energy Regulator approval on the basis of those artificially low costs.

There was no proper community consultation, so understandably great anger was generated by people who did not want their landscapes and living standards badly impacted.

Naturally, the delays have boosted costs, but that was minor compared to the original underestimation. As the construction costs explode, the promoters get increased rewards to match those cost increases. It is unbelievable that the nation signed contracts where the promoters win from higher construction costs.

Woodley lists four projects that tendered at a total of $5bn, but the estimated costs now total $27bn. And it’s “London to a Brick” that the big cost rises are not finished.

Of course, McManus must check the Woodley estimates, but I would be stunned if they are wrong.

All those extra costs will have to be paid in power prices and/or subsidies. No nation can afford that, and Australia needs the strength of McManus at the productivity summit to save people’s livelihoods.

In any crisis, the first step is to recognise what has happened. Then come the solutions.

There will be many solutions put forward but let me start the debate.

We should select one or two of the better transmission projects and link those renewable projects to gas and gas power, to back up and replace coal.

Ideally, we should use Victoria’s onshore gas for NSW and Victorian markets (it needs six test wells).

Politically, that may not be possible until after the November 2026 election, depending on the result.

A more achievable course is to fast track the Beetaloo scheme. If we can’t do that, we will need to pay huge costs of imported LNG, but at least that is a short-term solution.

We can also erect gas fired stations near existing coal stations.

Another scheme would be to erect massive solar panels on factories and warehouses. But again the solutions can’t be debated until we recognise the looming disaster, so McManus, we need you.

Originally published as Australia needs Sally McManus to save a productivity disaster