In the past few months we’ve seen some pretty major announcements illustrating the precarious nature of Australia’s manufacturing sector, all of which shouldn’t come as a surprise given the value of the dollar and structural weaknesses of many Australian manufacturing facilities. Yet what did come as a surprise was the relative absence of ‘chicken little’ claims that tied these announcements to the carbon price.
As some examples, we’ve seen Shell announce it will close its Geelong refinery (unless a very unlikely buyer comes along), Holden said it will sack 500 workers or around 20 per cent of its payroll, and the Gove alumina refinery was saved from the precipice of closure by a last minute deal for government to subsidise the supply of natural gas. Outside of manufacturing, we’ve seen Woodside finally pull the pin on developing its Browse oil and gas field via an LNG plant at James Price Point.
Yet all these events were reported with barely a mention of that dreaded carbon tax wrecking ball. Instead the reporting was pretty much straight down the line with little sensationalism.
Shell has an ageing facility, poor economies of scale and changing strategic priorities. Holden and Australian car manufacturing more generally lack globally competitive economies of scale. Gove’s remote location has made it dependent on highly expensive fuel oil.
In relation to Browse, construction costs are excessively high right now, and there are other options such as floating LNG plants or piping it to an existing LNG facility. And common across all of these events is the huge influence of the high Australian dollar.
A number of these projects are big greenhouse gas emitters. The Browse development would have been one of the biggest sources of emissions in the country, in the league of Hazelwood power station. The relatively small prominence given by media to the carbon price is therefore especially noteworthy.
Just a few months ago, at the height of the carbon tax hysteria, even Fairfax’s mass redundancy was blamed on the carbon tax by the opposition and garnered media coverage. Yet the emissions and energy involved in Fairfax’s operations are tiny relative to the size of its business.
The heat has now clearly dissipated from the whole scare campaign. The general public are no longer interested in reading about carbon tax wrecking ball stories because they just don’t align with their lived experience. Consequently, bar the odd feeble attempt by right-wing commentators, the media has also largely lost interest.
However judging from the latest poll results it looks like this has all come too late for Labor, and too late for the ongoing survival of the carbon pricing mechanism.
The one issue of relevance is whether, having exposed the scare campaign as a lie, Labor will have the courage to resist Abbott’s attempt to repeal the carbon price in the Senate post-September. Climate Change Minister Greg Combet has said pricing carbon has been Labor policy for a decade, so the party isn’t about to roll-over.
But who’s to say they’ll be quite so principled after suffering a big election loss, with a new leader in place who has few ties to the carbon pricing policy.