In Australia’s, so-called ‘wind power capital’, South Australia, meaningful and lasting employment is a rare and beautiful thing.
Last week, Coca-Cola Amatil announced that it is shutting its Adelaide bottling plant, which has delivered the ‘real thing’ to South Australians since 1939.
The loss of around 200 jobs in the economic basket case that is South Australia is a crushing blow to the workers and their families. One of them, Gino Gaddi, a 58-year-old Italian migrant, is yet another victim of South Australia’s obsession with heavily subsidised and utterly meaningless wind power.
Watching Gino on the ABC news broadcast was a gut wrenching experience. Clearly aware that the chips are now stacked firmly against him, Gino said: “I’m 58, who is going to employ me? There are youngsters around that will do as good a job as me.”
Good question Gino?
Who is going to employ a 58-year-old man (with a limited skill set) in a State that’s rocketing power prices and chaotic power supply is literally destroying any business that builds, makes or produces anything of value.
Where once upon a time, the Australian Labor Party would have died in a ditch to protect the opportunity of gainful employment for people like Gino, South Australia’s hapless Labor government couldn’t care less.
What added to STT’s sense of anger at the loss of close to 200 jobs – jobs that now lost will never return to South Australia – and our despair for Gino, his family and his future, is the depth of the cynicism of SA’s Labor government.
The announcement by Coca-Cola Amatil (‘CCA’) came out of the blue, with little or no advance warning of its decision to retreat to Queensland to enjoy its sunshine, lower taxes, cheaper and much more reliable power supply.
Given the run of recent comments made by every other business owner and operator in South Australia about the effect its ludicrous renewable energy policy has had on their bottom line, what perplexed journos reporting on the story was that CCA was not complaining about power prices and was not pointing to SA’s erratic supply as the reason for its decision to kill off its operation in SA. (Note the sense of disbelief expressed in the articles from The Australian which follow below).
There is, however, a very solid reason as to why CCA was staying schtum on its rocketing power costs and the lack of a reliable supply.
STT’s political operatives in SA inform us that a deal was struck long ago that involved the State government agreeing to let CCA have absolute freedom on the redevelopment of the land on which the bottling plant is situated, in exchange for staying silent about the increase in its power costs (which, like every other business in South Australia, jumped by more than 90% last year, with much worse to come) and the erratic supply caused by South Australia’s farcical attempt to run on sunshine and breezes.
The CCA bottling plant sits on prime real estate, a few kilometres to the north-west of the Adelaide CBD and is likely to be turned into high-rise residential apartments, the favoured investment of Adelaide’s (mostly Greek) property developers who in recent times have aimed their apartment developments at well-heeled Chinese migrants.
Adelaide has some of the most bizarre and restrictive planning rules on earth, so guaranteeing CCA that the State government would back whatever CCA decided to do on its site in exchange for running quiet on SA’s suicidal energy policy was, no doubt, viewed by CCA as a pretty favourable deal. However, Gino Gaddi and his fellow redundant co-workers probably hold a different view.
The only thing that outstrips Labor’s cynicism is the level of delusion exhibited by its vapid leader, Jay Weatherill.
Coca-Cola pulls the plug but ducks political storm over power costs
23 February 2017
Coca-Cola is refusing to reveal its power bill as it ducks a political storm over whether South Australia’s expensive and unreliable electricity supply contributed to the shifting of its Adelaide production to Queensland and Western Australia.
South Australians were yesterday shocked by the announcement that a high-profile manufacturing site on the edge of Adelaide’s CBD, which Coca-Cola Amatil has run since 1951, was to close in 2019 with the loss of about 180 jobs.
While Coca-Cola’s group managing director Alison Watkins said the decision was driven by “expensive logistics” and the need to “maintain our competitiveness”, the company yesterday refused to discuss its energy costs, including by how much its power bill had increased.
South Australian Manufacturing Minister Kyam Maher said the government spoke with Coca-Cola on Tuesday, before its announcement to workers yesterday. This came a day after Premier Jay Weatherill recommitted the state to a 50 per cent renewable energy target, saying it was good for business and jobs.
Major companies in South Australia have warned about the impact on investment and jobs since power prices skyrocketed amid supply disruptions and the closure of the state’s last coal-fired power station in May.
Coca-Cola is planning to invest $90 million in Queensland.
Mr Weatherill, who yesterday toured an abattoir in the state’s Murraylands that had installed its own back-up power generators, said there was a changing economy. “It is a challenge for South Australians when we have well-known, iconic brands like Holden and Coca-Cola leaving … there is extraordinary change going on in the South Australian economy,’’ he said. “It is unnerving for the people affected.”
United Voice spokeswoman Carolyn Smart said Coca-Cola workers were “gobsmacked” and it would be a “daunting prospect” for older workers especially to try to find new jobs.
Gino Gaddi, a worker at the Thebarton plant for 15 years, said “The main mood is shock.”
South Australian federal government frontbencher Christopher Pyne said Coca-Cola’s decision “goes to the whole issue of the future of our state in terms of making us an attractive destination for investment and growth … We can’t keep going on as a high-tax, highly expensive place to do business with the highest electricity prices in the country and the most unreliable electricity supply in the country, and this is where the rubber starts to hit the road for businesses.”
Greens senator Sarah Hanson-Young said the only “sustainable” jobs in South Australia were in “establishing battery and energy storage plants”.
Property Council state executive director Daniel Gannon said Coca-Cola’s Adelaide site was in a prime position on a transport corridor and would be a lucrative redevelopment opportunity.
Ah, Sarah Hanson-Young. Words fail us. A former student politician and now the Green’s South Australian lunatic in chief, Sarah occupies a zone so remote from reality that even Jay Weatherill would have a hard time reaching it.
Thankfully, there are still a few of us left on planet Earth, gifted with our good friends logic and reason. One of those is Judith Sloan.
Coke closure shows South Australia’s renewables experiment has failed
23 February 2017
The trouble for the South Australian government is that Coca-Cola is a household name and everyone recognises the high-profile factory located on the Port Road close to the city. It has been there forever.
The closure of the plant, with the loss of 200 direct jobs, is therefore a body blow to the Labor state government that is steadfastly retaining its commitment to a 50 per cent renewable energy target by 2025 because “it is good for business”. I guess that’s if there is any business left in South Australia by that time.
Companies can often be tactful at this point — and let’s face it, it is heartbreaking for the affected workers at Coca-Cola, many of whom will have worked at the plant for years — but the reason given by the company for the closure of the plant — “expensive logistics” — is ominous.
BHP-Billiton, by contrast, didn’t bother to pull any punches. In announcing that the company had lost $137 million at its Olympic Dam operation as a result of the statewide power blackout last year — it took more than two weeks for full production to resume — it declared that “Olympic Dam’s latest outage shows Australia’s investability and jobs are placed in peril by the failure of policy to both reduce emissions and secure affordable, dispatchable and uninterrupted power’’.
It went on to say: “The challenge to reduce emissions and grow the economy cannot fall to renewables alone.”
And then there was the foreshadowed closure of the Pfizer pharmaceutical operation in suburban Adelaide with the loss of nearly 100 jobs, even though the company had previously announced its intention to expand the plant.
Of course, we don’t need to rely on anecdotes to realise that the South Australian economy is performing badly. Just take a look at unemployment in the state. And the rate of workforce participation is much lower in South Australia compared with the nation. Also bear in mind that a much higher proportion of employed persons in South Australia works in the public sector than nationally.
The South Australian government is in panic mode over energy policy. The idea that the state can break away from the national electricity market is just fanciful.
Were the South Australian government to buy Pelican Point, the gas-fired power plant located in Adelaide and owned by French company Engie, it would find itself in the same position as the current owner — running a loss-making operation that is only required occasionally under current policy settings. Can South Australian taxpayers really afford this option?
And what about the South Australian government bundling up its electricity demand and offering an exclusive contract to a new entrant? For starters, the amount of electricity is small, the gas is probably not available and the cost to the taxpayer is likely to be very expensive.
It might be time for Premier Jay Weatherill to concede that the state’s experiment with its over-reliance on renewable energy has failed and to consider some alternatives sooner rather than later.