MATTERS OF URGENCY – Energy

There doesn’t seem to be a debate that Australians are struggling with the cost of living right now; everyone realises that. Where the debate does need to shift to is the reasons why that’s occurring and, therefore, what we have to do to get out of it. Something that is barely ever mentioned in this
debate, certainly not from the government benches, is our shocking productivity performance in this crisis. We have had a decade or so now of stagnant productivity growth that’s been shared by most other countries around the world. The chickens have been coming home to roost in the last few years because we’ve been spending too much money, we spent too much during the COVID era, our interest rates have been low and that has stimulated a lot of spending in our economy, but, because our productivity has been low, we haven’t been producing as much goods to meet that
spending, to meet that demand. Inflation is always the phenomenon that occurs when you have too much money, in this case too much spending—government spending, low interest rates, fuel spending, chasing too few goods. So the real sustainable solution out of this problem is to produce more goods from our economy. If we can lift our productivity, if we can lift the rate at which we can produce things from the natural resources we are blessed with in this country then we’ll get out of this inflation faster and with a lot less pain than would come by simply jacking up interest rates to stop and to choke off that excess spending. Yet there is almost zero focus on this, as I say, especially from the government. This phenomenon of low productivity growth is a tough one but is one that’s been well-known for some time, yet, when this government came to power, they had a Jobs and Skills Summit within months of forming government. They spent a lot of money and time marketing this Jobs and Skills Summit but they forgot—quite perplexingly—to invite the Productivity Commission along to their Jobs and Skills Summit. It was not an auspicious start from this government but, right from the get-go, they’ve had zero productivity agenda. We now have the situation where the Productivity Commission has just one referred inquiry to it—a historic low,
as far as I can tell. They couldn’t tell me a time at estimates where they had fewer inquiries referred to them by the government. There is no focus on this right now. It is tough work but it’s not overly complex. What we need to do is cut red tape, cut inefficiency in government, make sure we approve in a timely fashion those businesses and companies that want to invest in our country. We have seen an example of that just in the last few days on the front pages of major papers, with this government inexplicably refusing approval, or really avoiding approval of a gold mine in Western New South Wales. It was nothing to do with fossil fuels—so controversial right now—but was a gold mine at a time of record gold prices that would have created thousands of jobs in and around
Orange in western New South Wales, that would have created massive investment in our country and lifted our productivity, because we would have produced more goods—more gold in this case—from the same natural resources we have. This project was approved under environmental laws at both state and federal level yet we had the environment minister over the weekend step into it and use a relatively arcane law from the mid-1980s to stop the project, to stop the investment. Today that company has said to the market that this potentially threatens their whole project and
potentially much other investment in Australia. This is just one example but there is a litany of examples. Buybacks are occurring in the Murray-Darling, where we are taking food production out of business to send more water down an already flooded river, again, reducing our productivity. There is a shocking lack of approvals on gas projects around the country limiting our production of energy and bringing energy costs down. There is an inexplicable subsidy of swathes of wind factories and solar factories going onto prime agricultural land across Australia—again, reducing our nation’s productivity. The Labor Party has retreated back to 1970s industrial relations laws—stuff that goes back further than what Paul Keating had changed in the 1980s—again, limiting our efficiency and productivity. All of those decisions will add up to a massive cost to the Australian economy by reducing our productivity, reducing our prosperity and ultimately manifesting in inflation and cost-of-living pressures if the government continues its spending like a drunken sailor. That is the change we need from this government. We need to get them to realise they have to stop playing politics and focus on the productivity. That’s the only way out of this cost-of-living crisis.