Nats need power boost from Libs

In his memoir Lazarus Rising, former prime minister John Howard wrote that all political parties are coalitions in one form or another and the key challenge is keeping all of those elements together.

In Howard’s view, the essential ingredient was a mutual willingness to give and take. Howard wrote that “the key to my success was my recognition that in return for National Party acceptance on broad policy issues that Liberal Party attitudes would hold sway, the Nationals would win acceptance of their point of view on matters especially important to their own followers”.

That’s how the Coalition worked for most of my 30 years as a National in the Senate and since I retired in 2014. And I am sure that’s how Scott Morrison believes it should work.

The National Party wants to continue to be part of a successful and sustainable Coalition, provided it is not a one-sided transaction. Which brings us to energy policy.

It is fair to say that low-cost, ­reliable energy is especially important to regional Australia.

An Australian Farm Institute study last year found electricity costs farm businesses $1.2 billion a year and energy costs account for up to 16 per cent gross value of farm production in some sectors. The study says: “Australian industry, including agriculture, is rapidly becoming uncompetitive against countries with cheaper and more reliable power.”

High energy costs can cripple food manufacturing operations such as abattoirs, milk processing and processed food plants.

Energy-intensive manufacturing is the lifeblood of regional cities and towns and is critical to their viability and the living standards of their residents.

Take the Queensland Alumina plant in Gladstone in central Queensland.

It not only provides 1100 jobs but also provides business for 354 small and medium sized local enterprises. But alumina smelters can’t run on wind and solar power. And the Snowy Hydro is several years and 1600km away.

The Australian Competition & Consumer Commission last year identified there were too few electricity producers producing too little baseload energy. More supply from more providers was its recommended solution.

The ACCC proposed a new underwriting approach involving long-term, fixed-price energy offtake agreements for appropriate baseload generation projects.

On July 11 last year, prime minister Malcolm Turnbull said the ACCC recommendation “has the distinct advantage of being thoroughly technology agnostic and, well-designed, should serve our goal of cheaper and reliable energy”. He said projects to be supported “could be a mix of assets, it could be some renewable, some gas and some hydro. It could be a coal-fired project. It could be gas. It could be biomass or a mixture of all of the above”.

Suddenly it seems that technology-neutral policy is at risk of evolving into an “anything but coal or gas” approach.

The ABC has embraced this approach with enthusiasm. And apparently there are some Liberals in the Coalition who feel a genuinely technology-neutral approach might be unpopular in inner-city Melbourne and Sydney. (As an aside, I note that at 8am on Wednesday this week coal was providing 97 per cent of electricity to Sydneysiders and 76 per cent of power in Melbourne.) Teslas being charged in leafy Woollahra and Kew are being charged by coal.

Any assistance provided to energy projects under the ACCC model will be an almost infinitesimally small fraction of that ­afforded to renewable energy over the past seven or eight years.

The renewable energy target has delivered consumer-funded subsidies to wind and solar valued by the Australian Bureau of Statistics at $15 billion over seven years, which will grow to more than $20bn by next year.

In addition, since 2012, the Clean Energy Finance Corporation and the Australian Renewable Energy Agency have dished out $7.2bn in grants and concessional finance to renewable projects and clean energy initiatives.

And the Coalition has agreed to back Snowy 2.0 at a total cost, including acquisition costs, of more than $10bn. That’s more than $30bn in taxpayer and consumer-funded support for one energy source.

While the National Party might have deep reservations about some of these policy settings, it has been prepared to support these measures as part of the broad Coalition compact.

Importantly, an energy policy that includes new coal projects doesn’t amount to a rejection of the science of climate change. Upgrades of existing coal-fired power stations can reduce emissions at very low cost. New high-efficiency, low-emissions coal-fired power stations — whether in the Hunter Valley or central Queensland — can provide cheap, reliable energy with emissions savings of up to 40 per cent.

An “anything but coal” energy policy would harm regional Australia. It would harm living standards because it will price energy-intensive food manufacturing and minerals processing out of global markets.

Don’t forget that two-thirds of Australian exports are generated in the bush.

In Coalition terms, an “anything but coal” approach would also mean that the spirit of compromise is not being reciprocated. It would mean that technology neutrality in theory was OK, but technology neutrality in practice is not allowed.

And most importantly, it would be bad for Australia. And all Australians.

Ron Boswell is a former Nationals senator for Queensland and a former leader of the National Party in the Senate.