Macaulay questions ministers on Q&A


Printing Industries CEO Andrew Macaulay was in the ABC Q&A audience last night, asking Energy Minister Josh Frydenberg and Shadow Energy Minister Chris Bowen what they plan to do to address the energy cost surges that are affected the print industry.


During the nation’s top rated panel discussion show Macaulay asked, “I represent the print and packaging sectors, which, with the decline of car manufacturing in Australia is the largest employer in the country. These employers are in urban and regional Australia, and are predominantly SMEs. The skyrocketing cost of energy has crippled manufacturing in this country. The Government has initiated the National Energy Guarantee (NEG) which will hypothetically provide reductions or relief on energy costs in up to three years.


“My question is, what will the Government and Opposition do to provide relief to the manufacturing industry, to keep skilled jobs in Australia, and keep manufacturing in Australia?


Frydenberg responded, “The biggest thing we can do to reduce power prices is to get more gas into the market, because that is now setting the price for electricity as 10 coal fired power stations have closed over the last five to six years.


“The Prime Minister took the leadership there and intervened in the gas market, and we have now seen the big LNG suppliers offer Australians gas first before it is exported overseas. The ACCC has said that gas prices have come down by up to 50 per cent.


“The long term solution for that is for the states, who own the resources under the ground, to overturn moratoriums and bans on development and adopt a scientific evidence-based approach.


“Other components of the energy bill are networks, the poles and wires, 50 per cent of the bill. We have passed legislation that if done previously would have saved consumers $6.5bn. The NEG will be a long lasting solution in this country to integrate energy and climate policy, which will hopefully overcome partisanship.


Host Tony Jones then returned to Macaulay, who reiterated, “When people in the industry reach the end of their long-term energy contracts, they are getting 200 per cent price increases.

“It is a crisis right now, we are seeing a reduction in employment in manufacturing in Australia as we speak. It is here, what can we do immediately? We are talking about offsets for energy increases, methods for industry to sustain production, and employment when they are seeing price shocks we have not seen since the 1970s. The only way that production can be continued is to move it offshore.

“Packaging is one of the fastest growing sectors of our economy, but it can be moved offshore.”

Frydenberg responded, “We are dealing with this now, and there is no silver bullet. You have to deal with every aspect of the supply chain. What has been missing in Australia is certainty at the policy level. When you are a businesses seeking to make a 20, 30, 40 year bet by building a power plant, you need long-term certainty. The NEG has been widely supported by the biggest employers in the country. I would say to Bowen it is important that Labor does, as we need to give investors bipartisan certainty.”

Labor’s Chris Bowen then gave the Opposition response, getting in a serve on the government, by saying, “Josh is 100 per cent right to say the biggest problem is policy certainty. The problem is the Liberal party has been in office for five years, and we still do not have policy certainty, and we have had massive changes in policy. Trying to strike a bipartisan agreement with the Government is difficult when Frydenberg can not get his preferred policy through his own party room, let alone through us.


“I think that Frydenberg, Mark Butler, me, and Scott Morrison could sit down and quickly agree on a bipartisan energy policy, but Frydenberg would not be able to get it through the Liberal party room, and the climate change deniers he has got to deal with. I feel sorry for Frydenberg having to deal with them, but the fact of the matter is you have to deal with the Craig Kellys of the world to get your policy through, and it is hard work.”


Tony Jones cut in at this point, reminding Bowen that Macaulay had discussed print businesses that were at risk of immediately shutting down.


Bowen responded, “I understand that completely, but I am saying that Frydenberg is right to point to policy certainty, we have not been provided any. Frydenberg is also right to point to gas as an immediate challenge and opportunity. We went to the last election promising a national interest test on gas exports, a type of gas reservation policy. Frydenberg said it would be the end of the world, it was a massive intervention, terrible protectionism, and now he has adopted it. It should have been adopted way back then.


“The Government should have known this problem was coming, they were warned early about gas shortages that were going to hit us, and the gas shortages are leading to massive energy bills for manufacturers. Australia’s last glass manufacturer in Dandenong is having massive increases in its bills. I do not know how they are going to possibly get through it. It is gas that is the most immediate thing which can be done.


“If there are sensible things we can help the Government to do we will do them.


Frydenberg responded, “Bowen, you know… because you brought it up, I will bring it up. In your 2012 energy white paper and in written advice from the energy market regulator when you were in Government, you were told about the impact of supply/demand of having a big export industry, and now we are paying the price.


Ending the back and forth, Jones intersected, saying, “What we are hearing now is political bickering, but neither of you have said we need an emergency plan to save these jobs, or these factories. I want to quickly hear once more from Macaulay, what you have heard from both the politicians, does it give you any comfort?


Macaulay, “I am sorry, I know both of you are trying to find a solution, but the reality is we are talking about employment today. We are talking about investment in the industry today.


Policy from all Governments, State and Federal, has created sovereign risk in Australia which gets directly to the issue of investment, it is an issue in energy production, an issue in investment in high-technology which goes into manufacturing.


“We need to know what the solution to it is immediately, because the easiest solution for capital is to move offshore.”


 


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