Scott Morrison move to energise industry

Prime Minister Scott Morrison. Picture: PMO

Scott Morrison has elevated energy policy to the primary issue that will underpin key planks of the economic recovery.

And he will use the urgency of the pandemic to end a debate that has seen Australia’s competitive advantage of cheap energy of the past lost to rampant ideology.

The Prime Minister is clear in his message and unequivocal in his intent. Without cheap and reliable energy, there can be no sovereign manufacturing revival. And without a future hi-tech manufacturing base, there can be no job growth.

The fundamental point, which isn’t new but seems to have been lost, is that Australia’s energy prices need to reflect the lower international prices. It may come as a surprise to some on the other side of the debate but Australian manufacturing competes on a world stage.

At the heart of the Morrison agenda is gas as cheap and reliable energy that will drive growth.

We are the biggest liquefied natural gas exporter and we have to take advantage of it for our domestic industry.

There also has been a dramatic reduction in wholesale electricity prices and this needs to be turned into longer-term contracts to underpin job growth.

The market has had plenty of warning, particularly AGL, which is about to see its indolence over the Liddell coal-fired power plant lead to the government building a 700-megawatt gas plant smack in the back yard of Labor member for Hunter Joel Fitzgibbon.

What Morrison is proposing is nothing short of a complete transformation of the sclerotic east coast gas market, which has failed to invest in any new dispatchable power for the past decade. He has signalled to the market, without any subtlety, that if the private sector won’t step up, the government will step in and steal market share itself.

This is a policy that protects energy-intensive industries from higher prices and provides low-cost power to keep existing jobs in manufacturing and drive investment in new industries.

It ticks all the boxes, even if the activists hate it. Electricity prices go down, manufacturing costs go down and emissions go down.