Victoria at a fork in the road on energy

Despite the modesty of the major party promises, the difference on energy between the alternative future governments is stark.

This weekend’s Victorian state election provides voters with a fairly stark choice about the future of energy policy in the state. Yet the campaigns of the major parties have barely touched the issues of energy and the environment.

The numerous promises have been focused on local commitments and jobs, education and health have predominated. These are the issues that pollsters have found connecting with swinging voters. The defining battleground has been transport where the Napthine Government initially made the East West Link toll road its centrepiece and then sensing the mood, made an extravagant series of public transport policies.

Labor has focused on removing 50 of the most hated level crossings. It has criticised the Coalition promises of new rail lines as “paper promises” because they won’t be delivered until the mid 2020’s. Labor has concentrated on a more modest set of projects, including $300 million to restart work on the Melbourne Metro and moves to protect jobs by building rolling stock in Victoria.

Energy policy has been barely mentioned with a key difference being that Labor will retain the Victorian Energy Efficiency Target (VEET) scheme, whereas the Coalition are committed to abolishing it. Labor has relaxed, but not abolished, Ted Baillieu’s restrictive planning rules that strangled the wind power sector. It will also inject $200 million in jobs incentives to try to revive the renewable energy industry to a 2010 level of activity.

Labor will revive some, but not all, of the climate change policies enacted by former Premier, John Brumby in the pre-Copenhagen period of enthusiastic State based climate action. The national climate war that Tony Abbott won has left climate policy firmly in Canberra with most States unwilling to re-enter the space. In some cases, such as the RET, States are now unable to enact their own legislation because the Commonwealth laws prevail.

The Victorian Greens have tried to press their credentials by outbidding everyone and promising to close the entire brown coal sector by 2023. The extreme plan to shut 2200 megawatts within 12 months (Anglesea, Hazelwood and part of Yallourn W) stretches credulity and highlights the position the Greens have taken as idealists on the sidelines.

The improbability of their claim that the remaining coal powered stations could be scrapped in just eight years has meant the policy has been widely ignored. These are the sorts of goals that might be achievable by 2040 but the immediate challenge is to reduce brown coal from a 95% market share to something south of 75% by 2020.

If, as is quite possible, the Greens have the balance of power in the upper house (Legislative Council) they will need to find more practical incremental policies to leverage their influence.

Despite the modesty of the major party promises, the actual difference between the directions to be taken by the alternative future governments are stark.

Labor is focused on demand management, consumer costs and rebooting energy reform and renewables. The Coalition’s lacks a detailed agenda but wants to close down government involvement in the sector which it sees as completely privatised and only subject to national economic regulatory functions.

The defining electoral issue remains the East West Link, which was elevated even further when the Prime Minister declared the election to be a referendum on the project. In doing so he gave the winner a mandate – that most precious of things in politics.

If Labor wins, the project is dead. If the Liberals win, it will have the political legitimacy that it has so far lacked. The final hurdle for the project would be whether the planning approval survives each of the three Supreme Court challenges currently underway.

Lend Lease and its consortium partners would still face protracted and well organised community resistance. In the early months, this would focus on sit-ins to prevent the excavation of a huge cutting in the central part of Royal Park – the largest hole ever proposed to be dug in Melbourne.

Denis Napthine has misread the public mood and put all his eggs in one basket, making the tollway the cornerstone of his government while Daniel Andrews has staked his reputation on reversing the hastily signed contracts. The tollroad may turn out to be a very large political hole.

The Premier expected a wave of support from the outer eastern suburbs and motorists generally. This never emerged and the East West Link has remained relatively friendless outside of government. Marginal seat voters have concerns much closer to home and the $18 billion total price tag has left them wondering why this vast sum could not be spent fixing more significant local problems.

The contract is said to contain a secret “poison pill” to try to prevent it being reversed. The legality of this is doubtful but the endorsement of the Prime Minister of the election as a referendum puts paid to this threat and the “sovereign risk” argument against cancelling the contract.

If Labor wins the election there will be no doubt about its mandate to terminate the project. It can re-direct funding to its public transport and road priorities and the removal of 50 level crossings causing congestion at numerous locations across Melbourne.

The decision to scrap the project would not just be the new government’s doing, but a change endorsed in an election where the major issue was the fate of the project.

Lend Lease told the Court of Appeal that it had spent $60 million so far on the project. This would be a small price to pay to change direction and invest the rest of the $18 billion on higher priority projects with a publicly proven benefit for the community.

It would also be a small price to change direction on how Melbourne develops and protect its renowned liveability by investing in public transport instead of roads.

Andrew Herington is a former Labor ministerial adviser now a Melbourne freelance writer who has worked with community groups opposing the East West Link.

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