The lack of a clear energy policy, and six changes of Prime Minister, over the past decade has sapped business confidence, according to the head of the Australian Industry Group (Ai Group).
It will also impact the ability of Australian businesses to compete internationally, Ai Group’s chief executive Innes Willox told RN Breakfast on Tuesday.
“Well I almost watched Groundhog Day last night just to remind myself that we’ve been here before.
“This is an issue which has been absolutely destructive — not just for politics in Australia, but also business in Australia.
“We supported the NEG, knowing that it’s not perfect … but knowing it would at least provide a clear framework for investment.
“And, now that it appears the government has decided not to follow through … with the NEG, we’re back to a point where businesses are wondering what’s next.”
The bosses from the nation’s largest companies have also spoken out about the policy uncertainty:
Tony Johnson, Ernst & Young: “The instability in Australian politics comes at a high cost to business confidence, as companies delay plans and stall investment. This comes at the cost of jobs and economic development.”
Andrew McKenzie, BHP: “Businessmen like me will always ask for certainty so we can plan. We’d also like to see policy which makes economic sense, which improves investability of the country. But we work in many geographies around the world where we don’t always get our wishes granted.”
Brad Banducci, Woolworths: “Consumer confidence and certainty is key to us, and that’s what we’re looking for from the political end of town.”
Government action will discourage investment
The Business Council has criticised the Government’s “extreme” plan to force energy providers to sell some of their assets as a “last resort”.
“It is a bandaid solution that will at best provide short-term relief,” the council’s chief executive Jennifer Westacott said in a statement.
“By exacerbating sovereign risk and interfering in market outcomes, the proposals will discourage investment in urgently needed dispatchable power with serious consequences for prices and reliability down the track.
“Unfortunately, the cost of continued ad hoc intervention in the electricity market will ultimately be borne by Australian households, businesses and workers.”
The Property Council described the Government’s decision to prolong energy policy uncertainty as “disappointing” for businesses and consumers.
“We urge both the Government and Opposition not to abandon the NEG and pursue every possible effort to progress legislation through the Parliament,” said the Property Council’s chief executive Ken Morrison.
“We simply cannot afford to leave the question of emissions reduction unresolved.
“Leaving action on emissions reduction to the states and territories to pursue a patchwork of inconsistent approaches is not the answer.
“An energy policy without agreed emissions reduction targets does not end the energy stalemate and does not provide the certainty to support new investment in energy supply.”
Climate change is a ‘material risk’
In addition, the Australian Council of Superannuation Investors (ACSI) called the Government’s change of heart “regrettable”.
“Climate change represents a material risk to the value of [our members’] investments,” ACSI’s chief executive Louise Davidson said in a statement.
“A smooth transition to low-emissions energy presents a far lower risk to investments — the retirement savings of millions of Australians — than a disorderly one.”
“This decision means further delays to much-needed investment in energy generation to lower emissions and energy prices for consumers through increased supply.”