Politics with Michelle Grattan: Treasurer Jim Chalmers on jobs and work

Treasurer Jim Chalmers released his White Paper on employment this week.

Its aim is for everyone who wants a job to be able to get one without having to search for too long.

The paper says that a surprisingly large number of people are looking for work or for more hours of work, some three million, and that’s when unemployment is at a low 3.7% and we have labour shortages in multiple sectors.

Chalmers recognises that Australia’s labour market is “really resilient” and the government started in a position of “genuine strength” but the unemployment figures don’t paint the full picture:

There are other indications around under utilisation and other data that we talk about in the white paper, but also a lot of people confront barriers to working or to working more. And that’s why really a big feature, a key focus of the white paper is how do we make it easier for people to grab the opportunities of a changing economy, which is creating jobs.

In this podcast, Chalmers also canvasses inflation, migration, the cost of living pressures on households and concerns about China’s economy. Läs mer…

Grattan on Friday: In the second half of this term Albanese will need to concentrate on delivery

Labor’s national landscape is changing. Daniel Andrews’ abrupt exit from the Victorian premiership this week is the latest development in a wider picture.

Just a few months ago, two of the strongest state Labor leaders in recent history were solidly ensconced in Western Australia and Victoria, and Labor had just taken power in New South Wales. Federally, Anthony Albanese retained most of his glow. The Voice referendum was in positive territory (although declining support presaged what was to come).

Now both WA’s Mark McGowan and Andrews have walked away. Federally, Labor is looking like an ordinary government. “Ordinary”, not as in “bad”, but “ordinary” in the sense of a government facing a host of problems in what are difficult times, most notably a cost-of-living crisis and what seems a cold climate for trying to achieve a significant change to the constitution.

Looking a year ahead, Labor will be struggling against the electoral tide in Queensland, where (on present polling) the Palaszczuk government could lose office.

Palaszczuk has said she is determined to stay at the helm for the election, but her leadership has been under pressure from her colleagues.

COVID enabled Andrews and McGowan to transcend their state stages to become national figures. Of the COVID premiers, only Palaszczuk remains (ACT Chief Minister Andrew Barr is also still there).

The COVID era is behind us – except that Bureau of Statistics figures out this week put COVID as third among leading causes of death in 2022, behind heart disease and dementia. (In 2020, it ranked 38th; in 2021, 33rd.) That makes it all the more unfortunate Albanese has excluded, in the formal terms of reference for his COVID inquiry, the unilateral actions of state governments.

The changing of the guard in Victorian and WA Labor, the Queensland government’s troubles and the challenges for the Albanese government are morale boosters for the Liberals.

But the Liberals are a shambles in Victoria and a tiny rump in WA, so there are no early recoveries in those states. Queensland provides their bright spot at state level. Federally, the best the Dutton opposition probably could hope for at the next election would be to push Labor into minority government.

Albanese could never aspire to Bob Hawke’s “messiah” status. But after the 2022 election he soared high, elevated in part by people’s relief the Morrison government was gone; in political terms, the country seemed to have emerged from a black hole into the sunlight.

The Labor government launched into intense activity, including a plethora of reviews, and promised a better style of politics. The pace of activity continues, but inevitably political reality has set in.

Criticisms of the government range from overreach to underreach, achievement failing to reach ambition, corner-cutting. It comes from the right and the left and, on issues like the pursuit of emissions reduction, from both ends of the spectrum simultaneously.

Let’s not bypass the positives. The budget is in better shape than thought possible – partly through fortuitous circumstances, although the government stresses its finding and banking savings. Whatever the mix, there’s a surplus of $22 billion for last financial year and (despite Treasurer Jim Chalmers’ caution) surely a good prospect of a surplus this financial year. But while the budget is currently looking good, the economy is headed to slower growth.

Chalmers is a workhorse and has brought some changes (including the reforms of the Reserve Bank) and foreshadowed others (such as a revamp of the Productivity Commission). This week he released his employment white paper.

The paper is a reminder that it’s one thing to set out aspirations and directions, another to land delivery. A measure of the long-term worth of this paper will be the extent to which it does deliver jobs and extra hours to the up to 3 million people it says are seeking them. That will require effort on multiple fronts to reduce the disadvantages many of these people have.

The housing crisis provides an even sharper test of delivery. The government has various initiatives on the go, but the rate of construction is slow. Meanwhile an immigration rate running above an already large forecast adds to the housing pressures.

Labor boasts it’s implementing its election commitments. More generally, the (nearly completed) first half of the government’s first term has seen many policy announcements – the second half will need to emphasise delivery.

As the cost-of-living crisis grips the country, Chalmers has to fend off the popular calls for extra spending. This week brought unwelcome news on inflation, which has risen from an annual rate of 4.9% in July to 5.2% in August. That puts more attention on the Reserve Bank’s meeting next Tuesday – the first under new governor Michele Bullock – but Chalmers has played down the prospect of a rate rise.

Enough time has elapsed to show which ministers are good performers and who’s struggling. Transport Minister Catherine King is in the latter category. The government has still not been able to put behind it, or adequately explain, its decision to deny Qatar Airways the extra flights it sought.

A Senate inquiry (which the government had unsuccessfully tried to head off) this week probed the entrails of that decision, with senators giving the bosses of Qantas (favoured by the outcome) a hard time, and the government resisting providing documents. King, meanwhile, was on leave, for the school holidays. She has now been invited to appear before the committee but can’t be forced to do so.

The inquiry is emblematic: the Senate is becoming increasingly willing to take on the government. This is both despite and because of its progressive majority (the Greens have been poking the government bear on occasion, notably over housing).

Although the government is anxious to show it is concentrating on more than the Voice, the referendum will dominate the fortnight before the October 14 vote. On present indications, the government expects to lose. Albanese is preparing for defeat (while not conceding it), telling the Guardian’s Katharine Murphy the referendum will have been worthwhile regardless because it has brought the issue of Indigenous disadvantage to the fore.

Later in the month, Albanese will be in Washington on a state visit, feted at the White House. In politics, much is comparative. The Australian prime minister might privately muse that whatever problems he faces, they are way, way easier than those confronting his host. Läs mer…

Word from The Hill: Assessing Daniel Andrews, the extraordinary Pezzullo story, senators give Qantas chiefs a hard time

As well as her interviews with politicians and experts, Politics with Michelle Grattan includes “Word from The Hill”, where she discusses the news with members of The Conversation’s politics team.

In this podcast Michelle and politics editor Amanda Dunn discuss Victorian premier Daniel Andrews’ exit, as well as the revelation of extraordinary texts from leading public servant Mike Pezzullo promoting his views to the Coalition government through a Liberal insider.

They also canvass the Senate inquiry into the Qatar Airways saga, with Qantas chairman Richard Goyder and its new CEO Vanessa Hudson given a very hard time by committee members at a hearing on Wednesday. Läs mer…

Dan Andrews quits after nine years as premier of Victoria

Dan Andrews has announced he is quitting, after nearly nine years as premier and three election wins.

Andrews’ surprise announcement came early Tuesday afternoon. He said his resignation would take effect at 5pm Wednesday.

He told a news conference it was not an easy decision “because as much as we have achieved together, there’s so much more to do. But when it’s time, it’s time”.

He said recently, in talking to his family, “thoughts of what life will be like after this job has started to creep in.

”I have always known that the moment that happens it is time to go and to give this privilege, this amazing responsibility, to someone else.”

Andrews, 51, who became premier in December 2014, has been a highly controversial state leader, instigating the toughest lockdowns in the country during COVID. But despite criticisms of that, he won the November 2022 election handsomely. Andrews said he had never been focused on being “100 per cent popular”.

He said he came to his decision fairly recently. But it was right to “go when they are asking you to stay”.

“I am worse than a workaholic,” he said, with every waking moment consumed with the work. He did not know what he would do next. He wouldn’t do much for a while.

Andrews said when he had previously declared he would stay for the duration of this parliamentary term, “it was true then”. He had since changed his mind.

The state caucus will meet on Wednesday to anoint a new premier, with Deputy Premier Jacinta Allen widely favoured. Andrews said if there was a ballot he would be voting.

He had spoken to Prime Minister Anthony Albanese who was “a bit shocked”. “I thanked him for the partnership.”

Earlier this year another longstanding Labor premier, Mark McGowan in Western Australia, resigned unexpectedly.

Albanese said Andrews was a man of “great conviction, enormous compassion, and a fierce determination to make a difference”. Läs mer…

View from The Hill: ’Player’ Mike Pezzullo undone by power play

Mike Pezzullo, one of Canberra’s most powerful and certainly most controversial public servants, cannot survive the revelation of the trove of text messages showing him blatantly inserting himself into the political process.

Pezzullo, the secretary of the Department of Home Affairs, has been stood aside while his extraordinary behaviour, exposed by Nine Entertainment, is scrutinised by a former public service commissioner, Lynelle Briggs. But the end of the story is predictable.

In the tsunami of encrypted texts, running over five years and sent to Scott Briggs (no relation to Lynelle Briggs), a Liberal insider and confidant of prime ministers Malcolm Turnbull and Scott Morrison, Pezzullo repeatedly lobbied for his departmental interests and his views.

He dissed ministers in the way of these interests or those (and other people) he didn’t rate. He used Briggs to seek leverage with the then PMs, asking for his opinions to be passed on. Briggs was happy to comply.

Nine says it learned of the messages “via a third party who obtained lawful access to them”.

Pezzullo is a one-off in the today’s public service. He can perhaps be partly understood by referring back to the so-called bureaucratic “mandarins” of decades ago. They ran their departments with iron grips, and in some cases were, or tried to be, as powerful as ministers, or more so. They gave no quarter in bureaucratic battles.

The mandarins were “players”. Pezzullo is a “player”.

He’s tough and polarising, with supporters and bitter enemies. Critics have long questioned his judgement. On security matters, he’s the hawks’ hawk. While at first blush his texts appear highly partisan, that is too simplistic an interpretation. He fights bureaucratic and policy/ideological battles, rather than being directly party-political.

His addiction to texting is certainly bipartisan. Within the Albanese government they joke about it starting first thing in the morning and running well into the night.

As a public servant, Pezzullo has served both sides of politics. When in the defence department, he was lead author of the Rudd government’s 2009 defence white paper, which raised the hackles of China. Earlier, he was a senior staffer to Kim Beazley when Beazley was opposition leader. His primary interest is defence – he would have liked nothing better than to head the defence department.

When Anthony Albanese won government, some in Labor wanted Pezzullo gone. He survived not least because the new home affairs minister, Clare O’Neil, in charge of this huge, sprawling empire, needed an experienced hand.

In some ways, Pezzullo is a stickler for process – as we saw when Morrison was trying to make political use of a boat headed for Australia on election day – which makes these texts all the more shocking. But he portrayed himself as acting in broader interests, telling Briggs at one point during the 2018 battle over the prime ministership, “I say that from a policy perspective and not from a Liberal leadership perspective”.

Pezzullo lobbied relentlessly for the creation of the home affairs “super” department, which Turnbull set up in December 2017 to placate the ambitious Peter Dutton.

Those who resisted its establishment, particularly then attorney-general George Brandis, became Pezzullo’s targets. He accused Brandis of “lawyering” public servants “into a state of befuddlement”.

Pezzullo is particularly fond of military imagery. During the struggle to get home affairs up, he texted Briggs, “I am running deep and silent. Won’t come up to periscope depth for a while”. In another message he said the attorney-general’s department needed to be “put to the sword” on a matter, then “we can break out of the Normandy beachhead”. (In a 2021 Anzac Day message to staff Pezzullo caused a public ruckus when he wrote of “the drums of war” beating.)

Moderates were an all-round worry in the Pezzullo texts. Marise Payne, in the defence portfolio, was “completely ineffectual”, “a problem” and “doesn’t have a clear view of the national interest”. Julie Bishop received short shrift; he “almost had a heart attack” when she put her hand up as a candidate in the 2018 upheaval. He was sarcastically relieved when Briggs assured him she had few numbers.

In that battle, in which Dutton (Pezzullo’s minister) challenged Turnbull and Morrison ultimately emerged as prime minister, Pezzullo was concerned about who would end up his minister.

“You need a right winger in there – people smugglers will be watching”, he texted Briggs.

“Any suggestion of a moderate going in would be potentially lethal viz” for Operation Sovereign Borders, he said.

Pezzullo had little time for the head of the prime minister’s department, Martin Parkinson: he was not up to the job and “entirely lacking in self awareness”. In one of those nice ironies of politics, Parkinson was commissioned by the Labor government to lead O’Neil’s migration review.

Pezzullo, whose tug-of-war appearances at Senate estimates hearings are often compulsory viewing, complained to Briggs in 2020, after enduring a very long session, that the hearings were “actually a concern for our democracy”. But he boasted that “in batting terms we are 0-400”.

Free speech came well behind security in Pezzullo’s priorities. After an awkward story by reporter Annika Smethurst, who was subjected to a police raid, Pezzullo reportedly argued for a revival of the D-notice system, under which editors were requested not to publish certain information affecting defence or national security. It didn’t happen.

Pezzullo in one text asked Briggs, “Please keep our conversations confidential. Tricky tight rope for me”. Tricky indeed. The player obsessed by security has been undone by some unidentified power play that has left him totally exposed. Läs mer…

Government’s employment white paper commits to jobs for all who want them – and help to get them

The employment white paper, released on Monday, has outlined multiple measures the Albanese government will implement to assist the about three million people who want jobs or more hours of work.

They include making permanent a temporary measure allowing pensioners to earn more, smoothing the transition to work for people on welfare, and alleviating the disadvantage many of the unemployed face.

In the white paper, prepared by Treasury, the government commits to full employment, which it defines as “everyone who wants a job [being] able to find one without having to search for too long”.

It does not put a number on the unemployment rate this represents.

The government will make permanent the current work bonus measure for older pensioners and eligible veterans so they can work more without reducing their pension.

It will double the period during which many income support recipients can receive no payment, thus allowing them to keep access to social security benefits such as concession cards for longer when they first get back into work.

Social enterprises will be backed to address persistent labour market disadvantage. TAFE will be boosted, and the take up of “higher apprenticeships” in the priority areas of net zero, the care and digitisation will be accelerated.

In addition to nine immediate measures the paper looks to longer term policies to enhance people’s access to the labour market.

“The government’s vision is for a dynamic and inclusive labour market in which everyone has the opportunity for secure, fairly paid work and people, businesses and communities can be beneficiaries of change and thrive. We are working to create more opportunities for more people in more places,” the paper says.

The paper comes as the unemployment rate is at 3.7%, which is expected to tick up as the economy slows. This is very low for modern times but the white paper highlights constraints to higher employment.

“Inclusive full employment is about broadening opportunities, lowering barriers to work including discrimination, and reducing structural underutilisation over time to increase the level of employment in our economy.”

Commonwealth Treasury

Structural underutilisation is a mismatch between potential workers and available work. Reasons include workers’ skills not matching what the jobs need, workers and jobs being geographically apart, and barriers presented by disadvantage or discrimination.

“The government will take a broad approach to achieving sustained and inclusive full employment. This includes sound macroeconomic management to help keep employment as close as possible to its current maximum sustainable level in the short term. We are also committed to addressing the structural sources of underutilisation to increase the level of full employment that can be sustained over time without adding to inflationary pressures,” the paper says.

“We are taking comprehensive action, including improved education, migration and regional planning systems, and setting out reform directions to improve key enablers such as employment services, affordable and accessible child care, and housing. We are equipping the workforce with the skills needed for the jobs of the future, and enhancing the ability of individuals and businesses to adapt to the modern labour market”.

The report says increasing participation in work promotes social inclusion as well as boosting the country’s economic potential.

It notes the five regions with the highest long term unemployment make up 12% of all the country’s long term unemployed, although they have only 5% of the working age population.

Disadvantage can led to “intergenerational cycles of joblessness”, the paper says. Complex personal circumstances and discrimination compound local factors.

“Many people face multiple, interconnected barriers to employment such as a lack of access to services or secure and affordable housing.”

Unemployment particularly affects certain cohorts, including Indigenous people, people with disabilities and the young.

The paper points to the major forces that will shape the economy over coming decades. They are the ageing population, a rising demand for care and support services, the growing use of digital and advanced technologies, the global net zero transformation, and increasing geopolitical risk and fragmentation disrupting supply chains and making resilience more important.

“These forces are changing the composition of our industries, workforce needs, and the nature of work itself.”

The paper looks to renewable energy and digital technologies to improve productivity and says boosting productivity in industries such as care and support services will be increasingly important. “Rather than repeating previous waves of reforms, Australia’s productivity agenda needs to respond to current economic circumstances and identify modern strategies to advance enduring policy goals.” Läs mer…

Employment white paper to deliver more highly qualified workers in net zero, care and digitisation

The government will commit $41 million for technical and further education and “higher apprenticeships” when it releases its white paper on employment on Monday.

Of this, $31 million will be for new TAFE “centres of excellence” and $10 million will be to develop higher and degree apprenticeships in the priority areas of care, net zero emissions, and digitisation.

Treasurer Jim Chalmers said on Sunday the white paper will sketch out 31 future reform directions and contain nine new policies. Its emphasis would be on action.

The extra funding will fast track up to six new centres of excellence under the five-year national skills agreement presently being negotiated. The new centres will be upgrades of existing TAFEs and will establish a co-ordinated national network of institutions that help address the economic challenges facing Australia in the transformation to cleaner energy, the care economy and digitisation.

“The intention is to create new degree apprenticeship qualifications and enable TAFEs to deliver new bachelor equivalent higher apprenticeships independent of universities, giving them capacity to provide students with opportunities to gain the advanced skills needed by industries,” Chalmers and education and skills ministers Jason Clare and Brendan O’Connor said in a statement.

“The government is aiming to double higher apprenticeship commencements in the priority areas identified in the white paper over five years.

”These reforms will mean that apprentices can get degree-level qualifications and university students can more easily get practical training and skills.”

Chalmers said the expansion of TAFE offerings would produce

more graduates with more of the skills they’ll need to make the most of the big shifts that are shaping our economy into the future – whether it’s the net zero transformation, growth in the care economy or adapting and adopting new technology.

The white paper, prepared by Treasury, will set out five objectives:

delivering sustained and inclusive full employment
promoting job security and strong, sustainable wage growth
reigniting productivity growth
filling skills needs and building the future workforce
overcoming barriers to employment and broadening opportunities.

Its initiatives will cover ten areas: strengthening economic foundations; modernising industry and regional policy; planning for the future workforce; broadening access to foundation skills; investing in skills, tertiary education and lifelong learning; reforming the migration system; building capabilities through employment services; reducing barriers to work; partnering with communities; and promoting inclusive, dynamic workplaces.

Centrally, the paper will outline the government’s definition of full employment. It has avoided putting a number on it, instead saying it will be achieved when “everyone who wants a job should be able to find one without searching for too long”.

The paper will say discussions of full employment have often too narrowly centred around statistical estimates of the non-accelerating inflation rate of unemployment or NAIRU

which do not capture the full extent of spare capacity in our economy or the full potential of our workforce. The NAIRU should not be confused with, nor constrain, longer-term policy objectives.

The government has “broader and bolder aspirations for full employment, aimed at increasing the maximum level of employment we can sustain over time, by reducing structural underutilisation”.

Chalmers on Sunday played down suggested differences between the white paper’s definition of full employment and the Reserve Bank’s calculation of NAIRU, saying it was important not to try to find differences where they did not exist.

The targets in the white paper should be seen as complementary to, but “not in conflict with” the Reserve Bank’s targets.

The paper will say there are at present 2.8 million people wanting work they don’t have or hours they don’t have – equivalent to one fifth of the current workforce. Läs mer…

View from The Hill: We can’t prepare for a future pandemic without fully looking at state governments’ decisions in the last one

Nearly a year ago, a privately financed inquiry, led by Peter Shergold, a former head of the prime minister’s department, undertook an inquiry into Australia’s handling of the COVID pandemic.

The report, Fault Lines, was a solid piece of work, delving into the commendable and poor aspects of the response to what was such a massive health and economic crisis.

Among its findings were that lockdowns and border closures should have been used less and schools in the main should have been kept open. Both internal borders and schools were state responsibilities.

Australia always needed a federal government-commissioned inquiry into the management of the pandemic. Anthony Albanese recognised this and before the election he indicated Labor would have one. But he was vague about its form.

Now we have seen that form, and it’s clearly inadequate.

The terms of reference, issued on Thursday, say the inquiry will take a “whole-of-government” view. A whole of Commonwealth government, that is.

They are very detailed. But Albanese and Health Minister Mark Butler summed up the inquiry’s remit when they said in a statement it would consider Commonwealth responses, including “the provision of vaccinations, treatments and key medical supplies to Australians, mental health support for those impacted by COVID-19 and lockdowns, financial support for individuals and business, and assistance for Australians abroad”.

While looking at these areas will inevitably lead the inquiry into the various interfaces with the states, the terms of reference specifically say it will not extend to “actions taken unilaterally by state and territory governments”.

The inquiry will be done by a three-member panel, comprising Robyn Kruk, who has formerly headed departments at state and federal level; Catherine Bennett, an eminent epidemiologist, and Angela Jackson, a health economist.

There was immediate criticism that the inquiry is not a royal commission. Albanese dismissed this line of attack, suggesting royal commissions took a long time, and judges weren’t necessarily the best people for this job. These arguments sounded somewhat strange, however the fact it isn’t a royal commission is not the central problem here.

That problem is its failure to include the decisions of the states and territories – and notably that line emphasising their specific exclusion.

The COVID response was as much at state as federal level – in fact, on many aspects the states were the drivers. For example the Morrison government did not favour schools being closed, but state governments took a different view and did it.

So why exclude the states’ decisions? There is no logic about that, but it looked like some obvious politics was at play.

Facing criticism that he was protecting Labor states, Albanese pointed to the political mix of these governments at the time, when half them were non-Labor. He also said there had been some changes of government and leadership in some states.

One, more credible, reason for excluding state decisions is to avoid giving ammunition for a possible future change of government. The Palaszczuk government goes to an election in late October next year. That government came under much criticism over its uncompromising border closure during COVID, with damaging publicity about a lack of compassionate. It is already facing an uphill fight to hang onto power. The last thing it would want would be an inquiry – which reports by September 30 next year – revisiting earlier decisions.

(Victoria’s Dan Andrews, who ran the harshest lockdowns, has his election behind him, but likely wouldn’t appreciate any potentially tough findings either.)

After what the government must have found an unexpectedly fierce attack over its inquiry, Butler on Friday argued it could get into state matters.

It would examine the health response – which included the public health and social measures. And they covered “distancing, contact tracing, border closures, lockdowns, all of those things are in scope. They’re utterly in scope of the inquiry. It would be extraordinary for them not to be,” he told the ABC.

That leaves the whole thing as clear as mud. On Butler’s words, it would seem up to the panel how far it wants to push the probing of state areas.

But broadly, it appears the Morrison government will have the blow torch applied, while the state administrations of the time will at most only get some indirect heat.

Albanese says the inquiry is aimed at looking forward to how we can be better prepared for the future.

But without a forensic eye on what was good and bad in the decisions taken by all governments, we will only receive advice on how to put Australia in the best position to deal with another such crisis. And by limiting the inquiry, the government has invited a cynical response from the public, who got to know quite a lot about how various governments performed in those hard times. Läs mer…

Grattan on Friday: Albanese government faces an uphill road and angry locals as it drives change to renewables

Fire fear is gripping many Australians, with extremely high temperatures for September.

One day this week some 20 schools on the New South Wales south coast were closed, amid rising weather risk. Sydney national parks were shut. Multiple fires broke out in the eastern states.

The nation is bracing. The memory of that horrendous 2019-20 summer is embedded in our psyche.

The Bureau of Meteorology this week formally declared an El Niño event, looking to a hot dry summer. That will put pressure on ageing coal-fired power stations and thus the power system.

Apart from for a small minority, the argument about global warming is over. But the debate still rages about dealing with climate change and, close to home, Australia’s energy transition, which is under way but accompanied by increasing pain and problems.

Labor scored well politically when it issued its pre-election plan for the transition to renewables. It came with an election promise of an average $275 saving on household electricity bills by 2025. The promise will be unattainable, and in the meantime households face sky-high power bills, with only some benefiting from the government’s relief package.

Most people accept our energy system must move from fossil fuels, especially coal, to renewables as soon as practicable. But there are serious obstacles on the ground – literally.

The government uses the “not in my backyard” scare when the opposition proposes nuclear should be added to the energy mix. Now it is confronted by “not in our backyard” resistance from farmers and local communities to the big transmission cables needed to carry the renewable power. As well, there’s a backlash in some areas to wind turbines.

In 2014, then-Treasurer Joe Hockey was ridiculed when he described wind turbines around Lake George (near Canberra) as “a blight on the landscape”. The then opposition environment spokesman, Mark Butler, said Hockey was making “an utterly ridiculous contribution”. Labor can’t afford to laugh anymore.

Climate Change and Energy Minister Chris Bowen was in the NSW Hunter region this week to try to calm anger about the government’s declaration of a zone off the coast for future wind projects. Among their objections, locals have raised the harm to birds, sea life and the view.

The South Australian government has argued the proposed Southern Ocean zone for wind farms, off the coast of Victoria and SA, should stop at the Victorian border.

The rows breaking out over power cables and wind turbines are classic examples of major developments clashing with other priorities, whether commercial (tourism, fishing, agriculture), environmental or aesthetic. We’ve seen these battles for decades with mining projects. They’ve now moved into the age of renewables.

Australia is not alone on this issue, which is rearing its head in Britain and elsewhere. The Albanese government’s difficulty is there will be so many breakouts. It remains to be seen whether citizen discontent will translate into voter backlash in particular seats.

Infrastructure Minister Catherine King has felt the heat in her electorate of Ballarat. In a submission earlier this year, made as the local MP, to an Australian Energy Market Operator’s report on the proposed Victoria-New South Wales Interconnector (VNI) West transmission link, she repeated her long-held concerns about the consultative process.

As Australia continues its transition to net zero, there will be increasing need for new projects,“ she wrote. ”In rolling out these projects, it will be important to engage thoroughly and honestly with impacted communities all throughout the process – from project conception, to construction and beyond.”

In July, Bowen announced a “community engagement review” to improve engagement on renewable energy infrastructure upgrades and new developments, to report
by year’s end.

The process is tortuous and often fractious. And, as the Grattan Institute’s energy expert, Tony Wood, has pointed out, investment in renewables is stalled because of the slowness in getting the transmission grid in place.

The implications are substantial. The government is committed to having renewables generating 82% of our electricity by 2030. The present level is 35%. Wood says: “We are nowhere near where we need to be. We are way behind in time and way over in cost.”

The transition problems are making the opposition bolder in pushing its case to have nuclear power on the agenda. It argues if nuclear could replace some of the retiring coal-fired power stations, the existing grid could be used, reducing the disruption by new cables. But it has produced nothing specific on how nuclear will feature in its policy. Nor is it clear how politically risky raising the nuclear option is for the Coalition.

In an attempted political hit, Bowen this week issued an estimate that replacing coal-fired stations with nuclear would cost $387 billion. Given all the uncertainties, numbers mean little, although most experts maintain the nuclear path would not be economically viable any time soon. Even so, the government suddenly sounds defensive when rejecting even lifting the present ban on nuclear.

Pushed on Monday on the ABC’s Q+A about the ban, Bowen said that would be “a massive distraction. It would take a lot of our public debate”. This seems an odd argument. Whether nuclear power should be considered surely rests on two basic questions: whether the the conversation
market believes it viable and whether the public considers it acceptable.

At least the government this week had some good news on the gas front: the latest estimates by the Australian Competition and Consumer Commission indicate the country will go into early next year with an adequate supply for the domestic market. Treasurer Jim Chalmers was quick to declare the opposition’s “fearmongering” about the government’s imposition of pricing caps had been unjustified.

On the other hand, gas is coming under mounting attack from climate activists, as the government defends it as a transition fuel.

In political terms, the energy transition will put pressure on Labor on several fronts between now and the next election.

The first, and most obvious, is high power bills, feeding into the cost-of-living crisis.

Second, the localised arguments about the infrastructure will continue.

Third, investors will need more reassurance.

Fourth, the efficiency of the energy system must be maintained through difficult times.

And fifth, the government will need to hold the line against the Greens and the more militant parts of the climate movement that will attack it for not going fast enough to meet the climate challenge.

Those are the knowns. One unknown is whether we’ll get a really bad fire season and the implications that would have. Läs mer…

View from The Hill: Josh Frydenberg puts political ambition aside to remain in business

Former Treasurer Josh Frydenberg’s decision to put a business future before an attempted political revival is a blow for the Liberal Party, but a relief for the teal member for Kooyong, Monique Ryan.

Opposition Leader Peter Dutton might regard his former colleague’s decision with mixed feelings. Frydenberg would probably have increased the chance of the Liberals regaining Kooyong in 2025.

But if elected, Frydenberg would have become an obvious choice for party leader (on the very reasonable assumption the Coalition was still in opposition). More immediately, speculation about that prospect would have dogged Dutton in the run-up to the next election.

For Frydenberg, this must be a bittersweet moment. As he said in a note to Kooyong branch members, telling them he wouldn’t be seeking preselection, “It is a difficult decision and one I have been weighing up for some time”.

His aspiration to be prime minister has been long-standing, strong and obvious. He was indefatigable as treasurer, a quality shared by his successor Jim Chalmers, who also aspires to the top job. But business gives him a bright, lucrative, family-friendly future, without the pressures and uncertainties that politics bring.

Anyway, winning back Kooyong (which Frydenberg held from 2010-22) would have been no shoo-in. Ryan is regarded as more vulnerable than some of the other teals, but the demographics of the seat have been changing and there is a boundary redistribution to come.

After joining Goldman Sachs following his defeat, Frydenberg will now become chairman of the investment bank in Australia and New Zealand.

The firm said:

In this role, Josh will focus on further deepening and strengthening client coverage across the A/NZ region. He will continue to offer advice on economic and geopolitical issues as the firm’s senior regional advisor for Asia Pacific.

While it’s possible Frydenberg, 52, might consider running in the election after next – and he hasn’t closed off that option – it would seem unlikely.

The 2025 election was the logical time to try for a comeback. A term on and much water will have gone under the bridge – in his own life and in politics. The Liberal line-up would be different, the road to leadership potentially harder. Perhaps the fight in Kooyong would be more difficult.

Frydenberg became of a victim of the teal wave. He had stuck very close to former Prime Minister Scott Morrison: loyalty is an admirable character trait but not always a political advantage.

If he, rather than Morrison, had led into the last election, the Coalition might have done better; on the other hand, a leadership change carries its own costs. In any case, it was never on the cards.

Frydenberg, a conservative who became more centrist as time went on, was treasurer in extraordinary circumstances, confronting the economic challenges and demands imposed by the pandemic. He oversaw the wage subsidy JobKeeper program that, while it had its flaws which have seemed more significant in retrospect, was critical to keeping many businesses and workers afloat.

Independent economist Chris Richardson says JobKeeper “wasn’t perfect but it was bloody beautiful”. He praises Frydenberg’s COVID performance, saying,

The key thing was to make the wheels of government move faster than they had ever moved before. I give him high marks for that.

Another independent economist, Saul Eslake, agrees Frydenberg did a good job during COVID, with the only serious mistake being in some of the detail of JobKeeper.

He was right to throw overboard all the Coalition rhetoric about debt and deficit. He was honest, thoughtful and consultative.

Morrison, Eslake says, was a “huge handicap” because he was not an effective communicator of economic ideas, “in contrast to the prime ministers who backed Paul Keating and Peter Costello, the two most successful treasurers of recent history”.

But for the pandemic, Frydenberg would have seen the budget back in black. That achievement now belongs to Chalmers, who is savouring the moment. Läs mer…