Big business calls time on waste and economic folly

The business world is changing rapidly and big corporations have finally found their voice to hold the government to account for its wayward obsessions and lack of financial discipline. Big miners are calling out Labor’s claim of good budget management. As industry flexes its muscle ahead of Western Australian and federal elections, the mining community makes the point that Jim Chalmers’ claimed budget surpluses were only possible due to strong resources revenues. But, it says, the government has failed to use the windfalls for long-term budget repair.

Prevailing market conditions in mining are likely to result in a $4bn–$6bn upward revision of company tax receipts in 2024–25, the industry says. But, rather than budget repair, it is likely Labor will use the windfall to further entrench an expanding public sector and paper over the shortcomings of an energy transition that is running off the rails. The miners are right to say that without a proper economic vision for prosperity, the government is unable to distinguish between worthy and wasteful spending.

The Minerals Council of Australia budget submission tops a week in which business leaders and industry groups called the government to account. Woodside Energy chief executive Meg O’Neill said on Thursday that it would be a major government policy failure if Australia could not deliver cheap and reliable energy.

Australian Chamber of Commerce and Industry chief executive Andrew McKellar called on Labor to revisit its 82 per cent renewable energy target and prioritise exploration, extraction and generation of natural gas. The food industry lobby group, Independent Food Distributors Australia, spoke out about the impact of government power policies on the cost of living.

On the other side of the ledger, big businesses are abandoning the federal government-accredited voluntary carbon market because they have lost confidence in the quality of the abatement being offered. Corporations are wary of being accused of greenwashing and the government now finds itself liable to being sued for recommending shoddy abatement products.

Without credible offsets, industry, like the government, is going to find it much more difficult to meet its publicly stated carbon abatement targets. Abandoning international carbon credits will be popular with green groups and climate extremists who did not want them included, as well as those who have long argued the entire industry is a scam. But it undoubtedly will result in higher abatement costs for business, which ultimately will be passed on to consumers.

Industry is sensing that the breaking point, particularly on energy, cannot be far away. Energy Minister Chris Bowen remains insistent that renewable energy is the least-costly option. But he is failing to produce the results to match his rhetoric.

Writing on Saturday, former ACTU secretary and Labor MP Jennie George details again the distortion. Labor is able to claim renewables are cheapest because its brief to the market operator, AEMO, is to devise the lowest-cost pathway to meet the government’s 43 per cent reduction in emissions and 82 per cent renewables targets. AEMO is not asked what system would provide the cheapest energy to consumers.

The Minerals Council, which represents mining giants including BHP and Rio Tinto, says the Albanese government must commit to no new taxes, put nuclear power and uranium mining on the table, and stop “choking investment” through over-regulation and uncertainty. The view being put forward by business is the government has squandered its opportunity in the energy transition and worked against the industries that increasingly have paid the bills.