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Big economic opportunity, if only

Dec 30, 2020
Posts 0 Science Economy Climate Action

Originally posted on 30 December 2020 by Elana Mitchell

Climate change is the biggest threat to Australia’s economy but it’s also the biggest economic opportunity in the country’s history.

With boundless plains and world-leading sun and wind resources, our ability to produce cheap renewable energy is unparalleled. And, with the best endowment of raw material inputs for lithium-ion batteries, we also have the capacity to build the energy storage that will allow us to use renewable energy when the sun isn’t shining and wind isn’t blowing. With our major trading partners moving to net-zero emissions we are in a truly unique position to benefit from action on climate.


So far, Federal Government policy, or lack of it, has paralysed climate action.

This very deliberate strategy uses disinformation to confuse people so political parties can keep their fossil fuel corporate donors happy.

Who are the losers? Well, it’s you and me, it’s the national economy and of course future generations.

The so-called gas led recovery is a case in point. The Government pretends gas is ‘clean’ and essential for keeping power prices down. It’s not. Gas emissions are certainly lower than coal – up to 40% – but it is a fossil fuel and to limit global warming to a 1.5 degree increase in temperature, gas must be phased out as soon as possible.

Besides, renewable energy is now cheaper than gas and coal and once renewable energy generation exceeds demand we can store it using batteries, hydro and green hydrogen and we can export it to other countries, as we now do gas. 

As a nation we are extraordinarily wealthy. And it’s not just financial wealth. Our natural resources and beauty, our human capital, our work ethic and our creative multiculturalism are strongly in our favour.   

If the government had a vision for the future and was working for all Australians, not vested interest, we could go from being “a (somewhat) lucky country” to a nation that moves forward with intent.

Our economic plan is underpinned by policy goals in 3 key areas:

  1. Reforming the Tax System
  2. Supporting Individuals and Small Business through the COVID-Crisis and Developing Energy & Infrastructure
  3. Funding Science & Innovation
Investment in Science and Innovation will reinvent the economy by advancing technology. Infrastructure investment will facilitate the clean energy transition and our tax reforms, along with smarter stimulus, will help fund the transformation in a fiscally responsible manner.

The traditional cleavages that have defined major party membership in Australia continue to change. Many workers who were historically represented by the ALP and/or the unions no longer feel that either have their best interests in mind. By the same token, many traditional Liberal/National Party voters have become disenfranchised by the coalition’s unwillingness to address societal issues such as climate change. Both parties lack a coherent narrative for understanding modern Australia nor do they present a vision for Australia’s future. The COVID-19 pandemic has brought this lack of vision by both parties starkly into focus.

In the last 20 years, manufacturing as a percent of Australian GDP has declined from 12% to 6%. Steel production has almost halved, and in the last five years, Holden, Ford and Toyota have shut their Australian production. Union membership has fallen from around 25% to 15% of the workforce.

These trends reflect the impacts of globalisation and free trade, with industrial activity moving offshore, growing inequality and Australia’s economy becoming increasingly dominated by service industries like tourism, education and finance & professional services. Australia is not alone in the changes we have observed over the past few decades. The share of GDP which goes to workers in the form of wages has declined across most of the developed world. The path to a robust economic recovery does not involve keeping the same broken system and cutting wages even more. It requires taking the leap and developing the industries of the future.

In brief, economic growth must serve the purpose of the economy. Short term solutions such as population growth, austerity and bad debt should not be relied upon as the drivers of growth as it will eventually lead to reduced standards of living and environmental destruction. Instead, our nation needs to implement our comprehensive economic platform which will build a smarter economy, one that is fairer, more efficient and productive and, most importantly, ensure our economy can reach it’s full potential without taking from future generations.

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