The 2018-19 pre-Budget submission from the Minerals Council of Australia provides a number of important public policy initiatives involving lower taxes, less regulation, and less tape. Many of these policy recommendations are consistent with a long line of Institute of Public Affairs research to limit the size, scope and reach of government and expand economic liberty to make Australia more prosperous. Taken together, these initiatives, if implemented, would help to ensure Australian’s have access to affordable and reliable energy in a competitive economy.
The recommendation to cut Australia’s high company tax rate to 25 per cent is the minimum necessary to ensure Australia is a relatively attractive place in which to do business. With business investment near record lows as a percentage of GDP, it is more important than ever that governments make sure Australia is open for business. Cutting the company tax will increase economic output by around $17 billion per year, which will flow to workers as higher wages and shareholders as higher returns.
Importantly, the MCA also recommends a series of sensible, middle of the road reforms in the energy market. The first is to establish One Stop Shops for environmental approvals and assessments between state governments and the Commonwealth government. Such an initiative will reduce red tape and duplication between the two layers of government. The second is to remove the ability of green groups to engage in vexatious litigation which delays the implementation of projects that have already been approved by the relevant Minister. The IPA found that such litigation undertaken under Section 487 of the EPBC Act has imposed costs of $1.2 billion. The IPA strongly recommends that Section 487 be repealed entirely.
The third initiative is to remove the water trigger for coal seam gas and large coal development. These requirements largely duplicate existing state requirements, and strangely targets water use in the mining sector, even though that sector accounts for less than 3% of national water consumption.
The fourth initiative is to remove nuclear actions as an automatic trigger in the EPBC Act and to lift the ban on nuclear power. Australia has around a third of the world’s total uranium supplies, yet it is a vastly under-developed resource. Governments in Australia should look to the potential of uranium energy to play a role in Australia’s future energy mix.
Overall, Australia’s energy market is suffering from years of poor public policy which has promoted unreliable, high-cost renewables at the expense of reliable, low-cost coal. Over the long term the only sustainable solution is for the government to stop picking winners, which means withdrawing from the Paris Climate Agreement and removing emission reductions requirements as a component of Australia’s energy policy. Australia makes no noticeable difference to the global climate, and it is not in our national interest to pretend that we do.