There is no manufacturing future without cheap energy


Sharri Markson from Sky News interviewed me on Wednesday night, where I explained why the Albanese government’s attempts to boost manufacturing would fail without plentiful and affordable energy.

Edited Transcript:

Australia is an energy superpower. We should have the cheapest energy in the world. But instead, through policy failure, we actually have some of the most expensive energy in the world.

That is driving up our cost of living. It is also sending our manufacturers broke.


So, instead of fixing the energy market directly and lowering the cost of energy for households and businesses, the federal government is instead going to spend our money to band-aid over its own policy failures.

Australia has incredibly high energy prices—electricity and gas. We export the lion’s share of our coal and the lion’s share of our gas.

We are an energy superpower. We should have incredibly cheap energy. But through policy failures, we actually have some of the most expensive energy in the world.


As a result, we have a conga line of manufacturers that are going broke or have warned that they are going to exit Australia.

Qenos was Australia’s last plastics manufacturer, Orica the explosives manufacturer, Nestle, and PepsiCo have all warned in the last month that Australia’s energy costs are far too high.

They said that they are going to either exit Australia or have already exited Australia (in the case of Qenos).


So, while the Albanese government bangs on about its Future Made manufacturing policy, we have all these manufacturers who have said that Australia is a bad place to do business because the energy costs are so high.

I think the federal government needs to focus on fixing the energy market and delivering us cheap energy.

Then our manufacturers can actually survive, rather than throwing taxpayer money at all these boondoggle pet renewable manufacturing projects.

About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.