Australian Politics
Tuesday, April 30, 2024
Australia’s manufacturing decline is a story of broken promises and failed industry welfare programs
Trying to make everything in your own country is called autarky. North Korea tries to be autarkic. Their average national income per head is about one tenth of what South Koreans earn. A pretty clear lesson that Albo seems not to have learned
NICK CATER
In his first speech to the National Press Club after the 2022 election, Anthony Albanese boasted that his reforming Labor government would transform Australia into a clean-energy superpower.
How so? asked a sceptical journalist from Bloomberg News. How would Australia compete against the US, Canada, China and other countries that are aspiring to be global leaders in green manufacturing? “By getting on with it,” replied the Prime Minister. Some 20 months later, the question remains unanswered: Getting on with what?
The two examples of promising green businesses the PM cited on that day have hardly stood the test of time. Sun Cable, Mike Cannon-Brookes’s proposal to build the world’s largest solar farm and link it by an undersea cable to Singapore, seems less likely to come to fruition than Clive Palmer’s plan to rebuild the Titanic. As for Tritium, the Australian company that promised to build the world’s fastest electric vehicle chargers in southeast Queensland, the less said the better. Tritium’s future won’t be built in Australia. It will be built in Tennessee, where the company has received generous assistance from President Joe Biden’s Inflation Reduction Act, securing a sweetheart deal to build a giant manufacturing plant.
The $15bn National Reconstruction Fund Albanese promised would kickstart the industries of the future has been in place for well over a year but has yet to issue a single grant.
The PM plans to break the impasse with the National Reconstruction Fund 2.0, optimistically named the Future Made in Australia Act. Underpinning the government’s green superpower ambition is a breathtaking complacency that assumes Australia’s natural advantages in the fossil fuel-based economy can be seamlessly swapped out for ascendancy in the brave new carbon-free world. They cannot be. Our primacy in resources was based on merely having stuff. Green manufacturing is about making stuff, which is a different game altogether.
The Albanese government has placed a speculative bet on green hydrogen as the key to our export success. It makes the fatuous claim that Australia has an abundance of sunshine that can be turned into cheap renewable energy.
In October 2022, Energy Minister Chris Bowen announced a $13.7m grant to Andrew Forrest’s company, Fortescue Future Industries, to scope the construction of a 500MW electrolyser at Gibson Island, near Brisbane. Bowen described the project’s success as “critical” to Australia’s ambition to be a green energy superpower.
Last month, Fortescue boss Mark Hutchinson reinforced the project’s importance, describing it as “a litmus test for the rest of the hydrogen industry in Australia”. Yet when Fortescue announced financial approval for a string of green hydrogen projects at the end of last year, Gibson Island was not one of them. “We’ve been working very, very hard on it,” Hutchinson told The Australian Financial Review Business Summit last month. “But it’s tough based on the current power prices when we’re looking at competing globally.”
To judge from Fortescue’s investment portfolio right now, the future may be built in Norway, northern Patagonia, Brazil and British Columbia before it is built in Australia. It may even be built in Kenya and Congo. The future is already being built in Buckeye, Arizona, where Fortescue is investing $US500m ($765m) in a green hydrogen plant it says will be up and running by 2026.
It turns out abundant sun was not such a competitive advantage in the manufacture of green hydrogen. Low taxes, fiscally responsible government and cheap and reliable carbon-free energy are far more appealing drawcards for investors.
In 2023, manufacturing in Arizona grew faster than in any other state. It includes energy and water-intensive industries such as silicon chip manufacturing, with Arizona coming from nowhere to fourth place among US states. Apologists for the Albanese government might look for excuses in the global subsidy arms race unleashed by the Biden administration’s Inflation Reduction Act. They might claim Arizona has easy access to a much bigger market.
Superpower Institute Chair Rod Sims has highlighted his concerns with Labor’s Future Made in Australia Act and its lack of detail. Mr Sims questioned what the scheme aims to achieve and what its “guard rails” are. “If you don’t explain that, you can have people thinking it’s the worst of More
Yet Arizona’s hi-tech manufacturing boom started before Biden came to power and came at the expense of neighbouring California, where manufacturing is declining.
It isn’t hard to work out why. Arizona’s top state income tax rate is 2.98 per cent. California’s is 13.3 per cent. Corporate tax in Arizona is 6.96 per cent compared to 8.84 per cent in California. For energy-hungry industries such as hydrogen and the IT sector, however, the biggest attraction is the industrial electricity price: 7.47 cents a kWh in Arizona compared to 18 cents in California.
Albanese continues to talk a big game, promising jobs, industry and prosperity will flourish under the Future Made in Australia Act. Details are scarce, but the PM told ABC’s 7.30 this month there would be new government programs attached to the Act, as well as a recalibration of old ones.
Yet the long history of manufacturing decline in the past 50 years is a story of broken promises and failed industry welfare programs. The Hawke government’s generosity in granting $36m to the Kodak film factory in Victoria in 1988 (roughly $100m in today’s money) failed to stop the introduction of digital cameras or development of the smartphone. Hundreds of millions of dollars thrown at the car industry failed to save the Holden Commodore. Indeed, evidence that industry assistance programs work as intended is difficult to find.
It’s more than three decades since Bob Hawke’s Labor government eschewed industry protectionism as a means to make Australia globally competitive. Yet governments, state and federal of both political persuasions, have found it difficult to go cold turkey. The federal government’s guide to grants lists 330 different types of industry assistance. In 2019, the last year before Covid-19, the Productivity Commission calculated total government assistance to businesses at $13.9bn in tariff assistance, tax concessions and direct grants.
That is why we can say with some certainty that more government grants are no substitute for the economic discipline practised by the Republican administrations of governors Jan Brewer and Doug Ducey or the far-sighted decision of the Arizona government in the 1980s in overseeing the construction of the second-largest nuclear reactor in the US. The 3.9GW Palo Verde Nuclear Generating Station remains the backbone of the Arizona electricity grid, producing some of the cheapest power in the country.
Albanese is hardly the first prime minister to enter office who has failed to learn from King Canute, instead suffering from the delusion that getting your hand on the levers of state gives you the power to alter the tides. The outgoing tide of deindustrialisation shows no sign of abating.
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Government Warned Against Alienating Men in Anti-Violence Campaign
Alienating men might produce exactly the anger you are trying to avoid
Independent MP for Fowler, Dai Le, has warned that any government campaign aimed at reducing the incidence of male-on-female violence must be “mindful of language ... because not all men are violent.”
In moving to address the increasing numbers of women losing their lives, she warned that Australia must not “alienate one group from another.”
“I’m a mother of a son. I know that we have to be mindful of our language because not all men are violent, but how we are portraying it is that men are violent against women,” she told ABC.
“How do we include the young men in our society? How do we make sure they’re educated to respect and to work alongside women? [So they] don’t feel like we are saying they’re the bad ones there.
“What language are we sending out to young men growing up in this day and age?”
She placed responsibility for the increase of violence on social media.
“We’re seeing increased violence in society, increased violence against women. And we wonder why. I think the content of social media, and I think that we need to make sure that our young people in particular are not exposed to this kind of violent content constantly because that is actually influencing them,” she said.
“In particular in this day and age whereby people are feeling so disconnected [from their] own communities, I support that kind of violent content not to be continually shared.”
Ms. Le supported the government’s position against holding a Royal Commission, saying it was not the answer.
“I don’t know if another Royal Commission would do any good. What I think the government needs to do is get the funding targeted to communities that are experiencing high domestic violence and get them implemented,” she said.
“And education to ensure that men, young boys and young girls work together to know that they respect one another as human beings.”
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Deadly nitazenes drugs spark testing centres push
I hate to sound hard-hearted about this but I am not sure that testing rooms do any good overall. They may encourage involvement with drugs and thus lead to MORE deaths rather than fewer
Drug decriminalisation advocates are pushing for more supervised drug taking centres and testing facilities to be established to curb deaths caused by a synthetic opioid up to one hundred times stronger than fentanyl.
Nitazenes, a family of synthetic opioids that can be more addictive and potent than heroin and morphine, is contributing to an epidemic of drug fatalities across North America, and is now on the rise in Australia, having been detected in Victoria, South Australia and NSW.
The drug is already having deadly effects in Victoria, with the Coroner’s Court warning the opioid had been involved in at least 16 overdose deaths in the state since 2021.
Evidence suggests that nitazenes are coming from labs in China, although its origin is not restricted to one country, and are being sold off the dark web.
Experts, including Monash Addiction Research Centre deputy director Suzanne Neilson, used the World Health Summit to call for supervised injecting facilities, drug checking sites and public education on the benefits of naloxone, a medication that can reverse overdose effects, to help battle the infiltration of the drug and its deadly impact.
“We understand that in most circumstances, people are not intentionally purchasing nitazenes, what is most common is that people are purchasing other drugs,” Ms Neilson told The Australian.
“We do have some early warning systems in place, for example nitazenes that are detected in some emergency department settings … but it is quite limited at the moment in terms of testing for nitazenes. And because we don’t have widely scaled-up drug testing, we do get sort of limited information about what’s out there at the moment.”
Ms Neilson said nitazenes can be made to be similar to fentanyl or even 50 to a hundred times stronger.
“In Australia we have had a massive increase in overdose deaths … I think there is a significant threat of a future epidemic if we do follow in the path that we’ve seen in North America and the UK,” she said.
“Once (synthetic opioids) start to enter the market, what we’ve seen is a dramatic rise in deaths. We’d really like to know what’s going on before that happens to prevent those deaths if possible.”
Global Commission on Drug Policy chair and former New Zealand prime minister Helen Clark endorsed the controversial medically supervised injecting rooms in Melbourne.
“This is the kind of service that people need to stay alive, to stay healthy,” Dr Clark said.
“When you go to a centre like the safe injecting room, people bring in the stuff they’ve bought on the street corner (and it’s) tested, no one is going to die.”
She voiced her support for a second supervised injecting room in the CBD to go ahead, a measure the Victorian government committed to in 2020 but that has been met with backlash from the community and local businesses.
“The bottom line is that people that are using drugs need to be safe, and that’s why the centre is so important,” Dr Clark said.
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Shareholders Reject Petroleum Giant Woodside’s Climate Plan
Shareholders of Australian petroleum giant Woodside Energy have turned down a climate plan proposed by the company’s management amid pressure from climate activists.
During Woodside’s annual general meeting on April 24, its shareholders voted on a number of issues, including the chairman position and an action plan to help the company transition to net zero.
While the incumbent chairman, Richard Goyder, was re-elected with 83.4 percent support, 58.4 percent of the shareholders turned down its climate plan.
Despite the vote on the climate plan being non-binding and purely advisory, it showed that most of Woodside’s shareholders disagreed with the company’s vision about its decarbonisation toward net zero emissions.
According to the most recent version of Woodside’s climate action plan (pdf), the company achieved a reduction in direct and indirect (scope one and two) emissions of 12.5 percent below the starting base in 2023.
The petroleum producer set targets to slash its scope one and two emissions by 15 percent by 2025 and 30 percent by 2030.
It also planned to lift the amount of investment in new energy products and lower carbon services from $335 million (US$218 million) in 2023 to $5 billion by 2030.
After the vote, Mr. Goyder expressed his disappointment with the shareholders’ decision.
“Naturally, we’re disappointed, but respect the result,” he said.
“The vote reflects the challenges and complexities of the energy transition, and today’s outcome is one that we take very seriously.”
The chairman also noted that before the April 24 meeting, he had over 80 meetings with Woodside’s shareholders and proxy advisors in the past year where they had honest and open discussions on the climate action plan.
“We would love to be investing more money in renewable energy right now, if only we had the customers, and current customers were prepared to make the trade-offs, particularly financial,” he said during the meeting.
Nevertheless, Mr. Goyder acknowledged that many of Woodside’s customers were incurring substantial costs due to their energy transition.
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http://edwatch.blogspot.com (EDUCATION WATCH)
http://snorphty.blogspot.com/ (TONGUE-TIED)
http://jonjayray.com/blogall.html More blogs
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