Is this really an idea supported by the Liberal Party? It was once the party of free enterprise,private investment and entrepreneurialism.
Illustration by John Shakespeare.
In declaring “our beliefs”,the very first sentence on the Liberal Party website says that “we work towards a lean government that minimises interference in our daily lives;and maximises individual and private sector initiative”. The Liberals traditionally also claimed a belief in federalism,in respecting the rights and prerogatives of the states. If they ever were really serious about this,they are no longer.
This week,when the states – including the state Liberal and LNP parties – denounced the nuclear plan,Dutton brushed states’ rights aside by citing Paul Keating:“Never get between a premier and a bucket of money.”
In other words,we’ll pay off the states to win their permission. The Keating line is eternally funny;it’s also mildly insulting for Dutton to call his own state colleagues venal. Must be time to update “our beliefs” to add an overriding commitment to pragmatism.
The nuclear power plan is more a National Party affair. They’ve never quibbled about state-led development or government intervention so long as it occurs in the regions.
The Nationals have been pressing for nuclear reactors for years. “Nuclear is something the National Party obviously stands firmly behind as a party room,” said David Littleproud,current leader,speaking three years ago. He conceded that “the electorate isn’t necessarily there with us at the moment”. The Liberals now think the debate can be won.
Peter Dutton out-campaigned Anthony Albanese on The Voice but the energy debate will be harder for him to win.Rhett Wyman,Getty Images,Alex Ellinghausen
The Liberal nuclear policy is part of the drift of the Coalition from Liberal principles to pragmatic Nationals-style whateverism.
The second taste of Russia is from the pre-Soviet era. The nuclear power policy conjures the term “Potemkin village”. The concept was born when the Empress Catherine sent her lover,Field Marshall Grigory Potemkin,to seize and develop Crimea. But when she came to inspect her new territory in 1787,Potemkin supposedly put up a fake settlement to impress her. The buildings were pasteboard facades,according to legend.
Historians have declared the story apocryphal,but,as the Encyclopedia Britannica puts it,the term “Potemkin village” has “come to be used to describe an elaborate facade designed to hide an undesirable reality”.
The undesirable reality here is that,as a Coalition frontbencher put it to me privately,the nuclear policy “is an alternative,not a solution”.
To be fair,the Coalition isn’t pretending that its plan will address the energy crunch of the decade ahead. The policy claims only that it intends to have the first nuclear reactor up and running by 2035 or 2037,depending on which type of reactor they’d choose. With the remaining six sites,all would be online some time into the 2040s.
The big Australian manufacturers aren’t impressed. Energy Users Association chief executive Andrew Richards,representing firms such as BlueScope Steel,Tomago Aluminium and Visy packaging,says:“Even if the country wants to pursue a government-funded nuclear strategy,that’s still a decade away from any energy being produced from it,so it doesn’t do anything to solve the very real problems we have now.”
And in the intervening years,the new Coalition policy throws all other energy projects into a state of high uncertainty. A major coalition of investors,the Clean Energy Investor Group,protested this week that Dutton’s plan introduces “unprecedented sovereign risks” for investment in new energy.
The group of 18 big investors,including Australia’s Macquarie,America’s BlackRock and France’s Neoen,said “a stable and predictable policy environment is essential for attracting and retaining the significant capital required to achieve our renewable energy targets”,in the words of interim chief executive Marilyne Crestias.
Well,Marilyne,you can kiss that idea goodbye. Peter Dutton isn’t interested in investor bleatings. “I’m not too worried about the billionaires who want to make more money off Australian taxpayers,” he told the Nine Network on Friday.
The whole point of Dutton’s policy is to introduce uncertainty,to overthrow the government,to kill its policy and to win power at the election due by May.
No more renewable energy projects for the next decade? As if the Coaliton cares. Says Nationals leader Littleproud:“The Coalition’s plan for nuclear reduces the need for large-scale renewable developments.”
The biggest global investment boom in decades is under way,rebuilding the planet’s energy systems. How big? The International Energy Agency estimates that $US200 trillion (about $300 trillion) will be invested worldwide in creating the net zero economy over the next three decades. That’s equivalent to twice the total world GDP this year.
Australia,under this nuclear policy,is prepared to sit it out. The trillions will flow to the countries that offer investors a welcoming policy landscape,not a dizzying Luna Park of political and policy thrills. While Australia waits for a future Coalition government to deliver on a promise of building nuclear reactors. It’s a recipe for investment and economic stagnation.
So if new investment dries up,where does the extra electricity come from over the quarter of a century until the Coalition’s reactor fleet is fully online? The Nationals have the answer to that,too.
“Coal needs to be extended,” says Nationals MP Keith Pitt. “Otherwise,the lights go out.”
This is why the new Coalition policy cancels Australia’s existing commitment to a 43 per cent emissions cut by 2030.
In the real world,where companies make products and export them,the Energy Users Association’s Richards says:“We can’t kick the emissions-reduction can down the road. We have to deal with it.”
Why? Apart from anything else,the EU is planning to impose punitive tariffs on imports from countries lagging on cutting greenhouse emissions.
“Unfortunately,” concludes Richards,“the nuclear plan looks like it kicks the emissions can down the road.”
But at least Dutton assures us that,if and when we get nuclear energy,it’ll be cheaper:“I want to bring Australians’ power prices down.” But nuclear isn’t likely to achieve that,unless the government-built nuclear reactors supply government-subsidised electricity indefinitely.
Former Liberal prime minister Malcolm Turnbull,now an investor in renewables,points out in this week that “the cheapest form of new generation is wind and,above all,solar PV. The energy sector knows that and has zero interest in building new coal-fired power stations. And Australian families know that too,which is why we have the highest rate of rooftop solar PV in the world.
“Nuclear generation,on the other hand,is the single most expensive form of new generation.”
Turnbull describes the Dutton plan as “the worst of all energy worlds. It is designed to delay and obstruct the rollout of renewables,it will increase,massively,the cost of electricity,and it will extend our reliance on burning coal. So higher emissions and higher electricity costs!”
None of which is to say that Labor’s plan will succeed. But it does have a plan,investors are investing,the transition to net zero is under way,and,while the government has been forced to introduce more gas as an interim supply source,it is the only practical policy on offer.
So the Coalition’s nuclear plan is all politics and posturing,a Potemkin village of elaborate facades hiding an undesirable reality,a political alternative,not an energy solution.
Surely it’s dead on arrival,right? Only if you live in what the US Republican political strategist Karl Rove once called “the reality-based community”. And if the era of Donald Trump teaches us anything,it’s that politics is not necessarily interested in reality. Trump repeats often enough,loudly enough,that the 2020 election was stolen from him,and a third of Americans believe the lie unshakably.
Besides,remember the Voice? When Anthony Albanese proposed the Voice,he had all the opinion polls in his favour. He had big business,the sporting codes and the cultural elites on side.
Yet Dutton out-campaigned him,reversed the polls and defeated the referendum emphatically. Labor says the energy debate will be harder for Dutton to win because it requires him to build a positive case,not simply demolish an existing one.
But this is politics,and it has its own realities. Dutton could indeed fail on the policy plausibility yet win the campaign.
Nostrovia!
Peter Hartcher is political editor.
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