If Australia wants ANY industry – the RET must go

industrial-decline-2

Last one out – please turn out the lights.

Australians have a choice – maintain the Renewable Energy Target (RET) or kiss goodbye to what’s left of our manufacturing industry and say bon voyage to our minerals processing sector.

The RET is an economic suicide pact which is not only harming the poorest and most vulnerable members of our society, it’s making it impossible for Australian manufacturers and mineral processors to compete internationally.  And that means higher unemployment and less meaningful employment for those lucky enough to get work.

If you want your kids’ career prospects limited to saying: “do you want fries with that?” – then fight tooth and nail for the status quo. Otherwise, join the growing queue calling on the Coalition to scrap the RET outright.

burger flipper

While I consider it noble work,
my first choice was industrial engineer.

Here’s STT Champion, Alan Moran in The Australian yesterday – at the head of that queue and telling it like it is.

Energy costs continue to dog industry
The Australian
Alan Moran
25 September 2013

MYSTERIOUSLY, once the election was over, an OECD report with a Treasury official’s input emerged indicating the carbon tax would need to be 10 times the EU rate and twice the $38-per-tonne level posited by Treasury to allow Australia to meet its 5 per cent carbon reduction goal.

Less mysteriously, the new government has abolished the ALP-friendly Climate Commission and started to dismantle the Bernie Fraser-headed Climate Change Authority and the Clean Energy Finance Corporation with its $2 billion a year in subsidies.

The OECD report indicates that unless the developing world also implemented a carbon tax, Australia would see considerable de-industrialisation, moderated only by a retreat into an illegal protectionist regime. And the competitive pressures would further intensify if, as appears likely, Japan, the US and other OECD countries also reject a carbon tax.

This is contrary to the official Treasury line that we need a price on carbon now, that the longer we wait the more painful the transition and that the costs will be trivial. Treasury secretary Martin Parkinson would have known of the report’s findings months ago.

A different dimension is offered by Environment Minister Greg Hunt, who maintains that it will be easier than he thought for Australia to meet its carbon reduction goals because we are seeing lower demand for electricity. Last year, electricity supply from generating plants (other than subsidised small-scale supplies, mainly rooftop photovoltaics) was down 1.5 per cent, and is now about the levels of 2009. But this lower demand is a result of penalties on carbon emissions.

The carbon tax alone raises wholesale electricity cost by about two-thirds, increasing final household customer cost by about 15 per cent. The demand response (elasticity) to a price increase is about 0.3 so the price rise from the carbon tax means a direct demand reduction of 5 per cent at the household level.

The price-induced reduction in demand from energy-using firms is greater. Smelters and other high-energy-using production migrated to Australia after the 1970s oil shocks made these activities prohibitively expensive in Japan. The electricity industry reforms and privatisations 20 years ago further enhanced Australia’s relatively low-cost structure. But risks of carbon taxes and the progressive tightening of the renewable requirements noose have gradually reversed the competitive edge Australia once enjoyed.

The carbon tax was a factor in Ford’s decision to close, but the sharpest effect is on industries where energy looms large as an input cost. Energy comprises over 30 per cent of aluminium smelting’s costs, and the industry uses 13 per cent of electricity production. Energy taxes are causing the industry to pull out of Australia. Kurri Kurri in NSW was closed last year, while owners of two of five remaining smelters have announced production cuts and the commercial viability of a third one is under review.

In this respect, even if the carbon tax legislation is repealed, the subsidies to wind and photovoltaics remain through the 20 per cent Renewable Energy Target.

Aside from undermining the commerciality of lower-cost fossil fuel-based generators, by 2019 these subsidies will raise the average wholesale cost of electricity by 40 per cent. Although less onerous than the carbon tax, the RET still undermines Australia’s competitiveness in energy-intensive industries where our energy resources should make us world leaders.

If the carbon tax is repealed, Australia may well be jettisoning the insanity of going it alone with an extremely high impost in a world where few nations have any such measure. But we still have the very costly RET and other subsidies to uncommercial power sources. These and seven years of regulatory threats to the power industry have damaged our competitiveness and brought incalculable costs in terms of lowering business confidence.

Australia needs to reverse these threats to tap into the higher productivity that our energy assets provide.

Josh Frydenberg has special responsibilities reporting to the Prime Minister on regulatory reform and has outlined a skeletal deregulatory framework, based on rigorous review and incentives to bureaucrats. This is designed to bring about lower costs, including energy costs, and higher productivity. If successful this would boost electricity demand and reverse the decline following from regulatory-boosted prices.

Irrespective of its success, it is pointless and needlessly costly for Australia to meet emission reduction standards by watching production shift offshore.

Alan Moran is the director, deregulation, at the Institute of Public Affairs.
The Australian

alan pic

Alan Moran

STT says: “hats off, Alan”.

Our new Industry Minister, Ian Macfarlane needs to pay close and careful attention to Alan’s little edict above.

If Macca wants to have any meaningful work to do as Minister FOR Industry he needs Australian industry to not just survive, but to prosper.

The great wind power fraud is the direct consequence of the RET and the REC – and has caused Australian retail power prices to skyrocket.  The continuation of this policy fiasco will lead to a crippling escalation in power price levels as we approach 2020.  So, Ian – if you want to have a “day job”, then kill the RET now.

The brass plaque that sits on your office door and currently says “Minister for Industry” will simply mislead your visitors if the industrial sector as we know it goes the way of the Tasmanian Tiger.  In truth you’ll simply be the Minister formerly known as the Minister for what was Australian industry.

thylacine

Even I had a better chance of survival than
Australian industry does with the RET.

About stopthesethings

We are a group of citizens concerned about the rapid spread of industrial wind power generation installations across Australia.

Comments

  1. stand against wind says:

    I’d love to know to see the books of the new “Climate Council” which is supposedly funded through small donations by individuals through Facebook. I bet we’ll see them emerge as a pseudo lobby group for big wind.

  2. Reblogged this on Mothers Against Wind Turbines and commented:
    Renewable energy targets world-wide should be scrapped!!!

  3. Jackie Rovensky says:

    The news video from SA provided here by Harry shows the folly of wholesale encouragement of this industry and the reason why the RET and REC should be abolished. Not only do these things create huge imposts on industry and citizens, they encourage the wholesale sell out to these companies by our Local Councils, to the detriment of their ratepayers. They create an opportunity for people to take advantage of their position to ensure ratepayers are kept in the dark, metaphorically and literally, if these are allowed to continue.

    It cannot be doubted these handouts have caused enormous problems here and overseas. They have perhaps helped spawn the most destructive industry of the modern era. It does nothing for the environment, it does nothing for the secure production of electrical energy – a product that we have come to rely on in every area of our lives. It has created financial hardship to individuals, families and industry, with a major part being the impost to everyone of higher energy prices. It has created significant discord within communities. It has created very few jobs in relation to the financial outlay of manufacturing, installation and maintenance, and created a health hazard. And for all this the Government has had to take out huge loans that we will need to pay back. What good has come of this industry?

  4. Harry Makris says:

    ….at the “coal face”……

  5. Minister Ian Macfarlane, if you want a real industry, you need to get rid of the RET and the industrial wind turbines, as they are the major cause of the excessively high electricity prices.

    All the high power prices are doing is chasing all of what is left of our manufacturing industry, overseas never to return. Is that what you want to be remembered for?

    The wind weasels and greentards won’t do anything for this great Nation of ours, as the electricity is too expensive and we will be cooking on camp fires and burning candles to survive.

  6. David Mortimer says:

    Well put Alan.

    Even blind Freddy can see that the RET is crippling our manufacturing industry. Perhaps we should deliver the message to the government in Braille?

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