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No end in sight to soaring electricity prices

As the number of closures in the manufacturing and minerals-processing sector grows, it is worth reflecting on how and why the repeated warnings from these sectors about the debilitating impact of steadily higher energy costs were ignored. Less than a decade ago, Australia enjoyed the lowest energy costs in the developed world. It was an intrinsic part of our comparative advantage as a trading nation. But today that advantage has largely gone.


The Australian minerals industry strongly supports the Free Trade Agreement with South Korea - one of our longest term and most important export markets. Australian iron ore and coal has helped transform the South Korean economy by providing the raw materials to build modern cities and affordable energy to power their vibrant manufacturing sector.About 75 per cent of Australia’s exports to South Korea are minerals and energy products with a total value of $15.3 billion. The South Korean FTA will provide a significant boost to Australia’s exporters by removing tariffs on a range of commodities including gold, titanium oxide, lead and nickel. The minerals industry congratulates Trade Minister Andrew Robb for his determination to deliver this and other FTAs in the interests of Australia’s exporters. The Federal Government’s focus on FTAs sends a powerful signal on the importance of open trade and investment to Australia’s future prosperity.


The carbon tax, the Renewable Energy Target (RET) and a range of other energy policy interventions at the federal and state government level are imposing steadily higher electricity costs on households and businesses. No other country has adopted such a unilateral assault on its comparative advantage. In its submission to the Federal Government’s Energy White Paper, the MCA urges the Commonwealth to reverse these policy mistakes by urgently repealing the carbon tax and phasing out the Renewable Energy Target – a $20 billion subsidy to the renewable energy sector to 2020; a cost that is borne by householders and industry. Australia does not have to choose between coal-fired power and a low emissions economy. Technological advances in more efficient coal-fired power stations and carbon capture and storage offers potential for base load coal power with a sharply reduced carbon footprint. As part of a medium term plan to keep energy costs down and carbon emissions lower, Australia should seek to capitalise on its rich uranium endowment by re-starting a national debate on nuclear power. Coal fired power is expected to increase by 76 per cent around the world between now and 2035. Nuclear power will grow by 51 per cent over the same period. Australia is well placed to meet a significant share of this demand – generating jobs and national income – with the right policies in place. This will require an urgent and sustained effort to reduce energy costs by abolishing the carbon tax and phasing out the RET, an ambitious deregulation agenda, a stable tax regime to promote investment, the streamlining of project approvals and a new round of workplace reform. Australia should use its participation in a range of global bodies to be a leading advocate for a global solution to the problem of energy poverty. Nearly half the world’s population has no or limited access to energy. An estimated 1.3 billion people have no access to energy at all.


The Minerals Council of Australia (MCA) welcomes the opportunity to comment on the Water Bill Exposure Draft. Water is a critical input into mineral exploration and development operations. Secure and cost effective access to water through efficient water markets and industry water stewardship is a key plank of the minerals industry advocacy.

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