Dutton’s nuclear reactor pitch worth investigating

Leader of the Opposition Peter Dutton delivers his Budget reply in the House of Representatives at Parliament House in Canberra. Picture: NCA NewsWire / Martin Ollman

Peter Dutton opened up an important new front in Australia’s energy debate in his budget reply speech on Thursday night. Much will depend on cost benefits and safety, but his advocating small modular nuclear reactors as part of the nation’s energy mix makes sense. Their reliability and the fact they can be plugged into existing grids and emit zero emissions should make them a good fit for Australia. So does our abundance of uranium.

“Thirty-two countries – including Canada, China, France, the United States and the United Kingdom – use zero-emission nuclear power today, including to firm up renewables,’’ Mr Dutton told parliament. “Fifty countries are exploring or investing in next-generation nuclear technology.’’

As the Opposition Leader says, any sensible government in the 21st century needs to be considering it. While the Albanese government is happy for similar technology to power the nation’s future submarines under the AUKUS pact, it has not, apparently, considered it to meet the nation’s energy needs. Both sides of politics need to do so, especially with looming energy shortages, delays to the Snowy 2.0 pumped hydro project, and question marks over hydrogen. Small and micro modular reactors come at a price; so does harnessing renewable energy.

In his speech, Mr Dutton acknowledged the chief executive of one of Australia’s largest baby food manufacturers, Andrew Mitchell of SAFCOL in South Australia, who was in the gallery. “It’s a great business, founded in 1945,’’ he said. “In January, SAFCOL’s electricity bill went up by 120 per cent – it more than doubled.’’

Mr Dutton, appropriately, also used his speech to probe the government over its plans to rein in the costs of the NDIS, which will be a major factor in the nation’s structural deficit in coming years. Jim Chalmers offered no details in the budget on how the government would improve the scheme’s sustainability.

Nor was the public much more enlightened after NDIS Minister Bill Shorten outlined relatively vague plans on Thursday for how the government would save $15bn from the scheme over the forward estimates. The NDIS will still cost $35bn this financial year and grow to $56bn in 2026-27.

What was missing from Mr Shorten’s announcement was a commitment to scale back the eligibility criteria for accessing the scheme. In February, The Australian reported that the number of children entering the NDIS with autism was driving overall scheme numbers, and costs, rapidly higher. And once they are in the scheme, very few exit.

As of February, 92,000 children aged 0-6 were on the NDIS, and another 140,000 aged 7-14. More than half (54 per cent) of the 266,000 participants aged 18 and under have autism and 20 per cent have developmental delay. About one in 10 of all boys aged 5-7 is now on the NDIS, along with 4 per cent of girls the same age. They are the fastest-growing category of participants in the NDIS, which numbered 570,000 participants. Of the 20,477 NDIS plans approved in the December quarter last year, 9813, or 48 per cent, were for children younger than seven. We also reported that young children were being diagnosed with more severe autism than their characteristics warranted, to give them a greater chance of ­securing a place on the NDIS, piling pressure on scheme costs.

University of South Australia health economist Leonie Segal said the average NDIS cost for a child with an autism diagnosis was $18,000 for 0-6-year-olds, $15,640 for 7-14-year-olds and $28,800 for 15-18-year-olds.

As Mr Shorten said in February, the NDIS was “the only lifeboat in the ocean” after its ­creation saw other service providers, including the states and schools, vacate the field in terms of offering support to children with psychosocial challenges. The scheme as originally designed, he said, was not meant to cover everyone with a ­psychosocial illness, only the most severe. Yet a lot of states had folded their mental health programs into the NDIS.

Mr Shorten has not tackled the issue, unfortunately, but he was confident the cost of the scheme would be moderated in large part by improving the agency’s capability and improving how participants’ plans were managed. The frequency of plan reviews is to be scaled back, with more than 70 per cent of participants currently having their plans reviewed every six to 12 months. Extending this out to three to five years is expected to save billions in administrative costs. Mr Shorten said the National Disability Insurance Agency would support participants to better manage their plans within budget, which was expected to save more $7bn over four years. A further $3.1bn would be saved, he said, by investing almost $420m in more staff and better computer systems. As a strong supporter of the NDIS from the time it was mooted, The Australian wants the scheme to endure, to improve the lives of the nation’s most severely disabled people. Without further reforms, including to eligibility, the measures announced on Thursday are unlikely to reduce cost pressures enough.

In his budget reply speech, Mr Dutton backed sustainable funding of the NDIS. He also backed the government’s measures on aged care. He directed his pitch at middle Australians, who, he said, would be worse off after the big-spending budget and would not receive “one cent’’ of an additional $185bn in government spending over five years. The Australian disagrees with middle-class welfare, provided personal tax rates are lower. Inflation, which, as Mr Dutton said, was higher in Australia than in any G7 nation, must be contained. Multiple economists have warned Australians this budget was going to make the Reserve Bank’s job even harder. We also share Mr Dutton’s concern that 10 million Australians who earn under $126,000 face a tax hike in coming years. The insidious problem of bracket creep must be addressed through lower personal tax rates. He promised, wisely, to restore the Coalition’s tax-to-GDP ratio cap of 23.9 per cent. “We want to give people choices in their own lives,’’ he said. “We believe in lower taxes to allow Australians who work hard to keep more of their own money.’’

It’s a good philosophy.