Essay by Eric Worrall
“… We need to see 25GW of new [generators] between now and 2035 …” – but Victoria is consistently voted the hardest place to do business in Australia.
Victorian government urges more investment in renewables as revived SEC won’t be enough to reach target
Lily D’Ambrosio says less than a quarter of the energy needed will come from the SEC and urges industry to produce remaining 20.5GW
Adeshola Ore Wed 12 Apr 2023 17.37 AEST
Victoria’s energy minister has urged private companies to help do the heavy lifting in the state’s transition to renewable energy, saying the revived public State Electricity Commission (SEC) will not crowd out the market.
Lily D’Ambrosio told an industry event on Wednesday that less than a quarter of the renewable energy required to meet the state’s 2035 emissions reduction target would come from the SEC, and called for investment to produce the remaining 20.5 gigawatts that is needed.
This comes after the revival of the SEC became a flagship election promise of the state government last year, which Daniel Andrews repeatedly highlighted after Labor won a third term of government.
D’Ambrosio assured private companies that the SEC was not designed to be “crowding out the market for private investment”.
“There’s lots of room and we need all of you who’ve got an interest in this space to come and continue to build, knowing that there’s plenty to be done in our state,” she said.
“We need to see 25GW of new [generators] between now and 2035.”
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Read more: https://www.theguardian.com/australia-news/2023/apr/12/victorian-government-urges-more-investment-in-renewables-as-revived-sec-wont-be-enough-to-reach-target
In 2022 Victoria was voted the hardest place to do business in a business survey. The following was published in Australia’s premier financial paper, the Australian Financial Review. Our equivalent to the Wall Street Journal;
Victoria is the hardest place in Australia to do business, says survey
Patrick Durkin BOSS Deputy editor
Feb 9, 2022 – 5.00amVictoria has been ranked as the highest-taxing state with the largest public sector and most red tape, making it one of the hardest places in the country to do business, a damning new report finds.
More than half the national businesses polled said Victoria was the hardest state to do business in. Four out of five said they had difficulty accessing the labour and skills they needed and only 7per cent said the Andrews government was doing a good job of reducing the cost of doing business.
Victoria ranked well in some areas such as infrastructure (the government released a Deloitte report on Tuesday that put the value of major projects at $174.4 billion) as well as utilities, research and development, and higher education. But the state’s productivity levels have fallen badly over the past decade, and the time and cost of setting up a business has risen to the highest of all the states.
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Read more: https://www.afr.com/policy/economy/victoria-is-the-hardest-place-in-australia-to-do-business-survey-20220207-p59udj
The 2022 business survey is no outlier, there are stories from 2023, 2021, 2020, 2018 describing the difficulties of doing business in Victoria. Plenty more where they came from.
Why is Victoria such a difficult place to do business?
I believe the problem is decades of worker centric government. Labor union affiliated socialist politicians have dominated Victorian politics for much of the last half century, and have heavily tilted the table in favour of workers rights. Even on those few occasions when “conservatives” have won elections in Victoria, they aren’t what most Americans would recognise as conservative, they tend to be more closely politically aligned with US Democrats than Republicans.
As a result of the long term bias towards workers rights, labor union organisers enjoy strong legal protections, which they have sometimes been accused of abusing.
Large construction projects, even green projects, are frequently marred by accusations of organised labor standover tactics.
The following tale of woe is from Victoria’s desalination project, a high priority green project inspired by Climate Commissioner Tim Flannery’s ridiculous 2006 prediction that Australia faced permanent drought.
Unionists ‘forced desal hirings’
THEAUSTRALIAN
UPDATED 2:11AM NOVEMBER 20, 2010, FIRST PUBLISHED AT 12:00AM NOVEMBER 20, 2010UNIONISTS at Victoria’s desalination plant have been using strong-arm tactics on job recruiters to force the hiring of preferred union members.
This is according to intelligence from operatives who conducted a spying operation code-named Pluto Project.
The extraordinarily generous wages and conditions on offer, the forcefulness of union figures and the pressure on builders to meet tight construction deadlines for the Brumby government’s $5 billion-plus plant had led to numerous unacceptable hirings, sources said yesterday.
“A number of people hired on that site have never even worked in construction or on a site before,” said one senior source.
“Managers have been giving in to compulsory unionism because the union dictates who will work on the site. Supervisors go through the induction office and say ‘to keep sweet with the unions, put these people on’.
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Read more: https://www.theaustralian.com.au/nation/investigations/unionists-forced-desal-hirings/news-story/40d4b2af70b6c67ee19ef30f6838fb40
John Setka, who is currently the head of the Victorian, South Australian and Tasmanian branches of the CFMEU, Victoria’s premier construction labor union, in 2016 was accused by the Victorian Police of hiring outlaw motorcycle gangs as union enforcers.
This is just my take on the situation. Whatever the real reason, investment in Victorian green infrastructure is not proceeding as fast as Premier Dan would like.
One of the Victorian Government’s responses has been to revive direct public ownership of energy infrastructure, to fund some green projects, and invite private investors to put up cash to fund all the other projects they want completed. They are at pains to assure private investors have nothing to fear from government funded renewable projects competing with private projects.
‘Perilous journey ahead’ under Victoria’s energy overhaul
Patrick Durkin and Angela Macdonald-Smith
Oct 21, 2022 – 4.54pmClean energy investors have warned of an investment drought and large energy users say their survival will be threatened unless the Victorian Labor government gets its radical plan to revive state ownership of electricity supply exactly right.
Big industry fears they will be slugged with higher prices and be forced to take on more risk under the plan by a re-elected Andrews government to revive the State Energy Corporation to invest, own and retail renewable power.
The fears voiced by the group representing companies such as Brickworks and Bluescope Steel came as major renewables investors said they won’t invest the tens of billions of dollars required to meet Victoria’s proposed 95 per cent renewables target for 2035 if they are disadvantaged in any way against the new state player.
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Private investors could face being squeezed out of new investment in energy under the plan, which the industry super sector – which would co-invest with the SEC – lined up to back. Morgan Stanley labelled the plan “a net negative” for major suppliers AGL Energy and Origin Energy.
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Read more: https://www.afr.com/companies/energy/perilous-journey-ahead-under-victoria-s-energy-overhaul-20221021-p5brro
Where does Victoria plan to raise the money, for these direct government investments in green energy projects?
One possibility is China. In 2021 Premier Dan tried to sign Victoria up to China’s Belt and Road.
China’s Belt and Road project has been accused of using corruption and sharp practices, of laying debt traps for unwary clients. In 2021, the Australian conservative federal government vetoed the Victorian Belt and Road proposal, but the Aussie federal conservatives lost the federal election held in 2022, were replaced by a far left Labor / Green Party coalition.
A few weeks ago, Victorian Premier Dan Andrews returned from a mystery trip to China with a big smile on his face. Reporters were excluded from the meetings in China. I wonder why Premier Dan felt the need for such secrecy?
If Premier Dan signs up to China’s Belt and Road, and the deal turns out to be a debt trap, anyone who invests in Victorian green energy infrastructure will be on the hook to service that debt.
If all this isn’t enough of an investment deterrent, during the Covid lockdowns of 2020-21, Premier Dan Andrews established a track record of imposing some of the most business unfriendly lockdown laws in Australia. At one point Victorian police opened fire with rubber bullets at a freedom protest, though Premier Dan denies issuing the order to start shooting.
Many businesses went bankrupt during the lockdown period, and many ordinary people suffered substantial financial losses because of actions taken by the Victorian Government during the lockdown. The Victorian Government has vehemently opposed paying compensation for their actions during the lockdown, even when the State Ombudsman recommends compensation is due.
The takeaway from the Victorian Government’s harsh treatment of compensation claimants over their heavy handed lockdown tactics, in my opinion is don’t expect any sympathy or help from the Victorian Government if your green project encounters a few road bumps.
Hands up who wants to sign up to the opportunity to invest in Victoria’s renewable energy push?
Update (EW): Rud Istvan points out Victoria’s state debt is enormous compared to other states. From the AFR in 2022:- “… Victoria’s net debt in absolute dollar terms is forecast to be larger than the total combined of NSW ($115 billion), Queensland ($39 billion) and Tasmania $5.2 billion) in 2025-26. …”
Update 2 (EW): Battleground Melbourne, which gives detailed eyewitness accounts of the brutal police tactics used to break up that freedom protest I mentioned, was played at Australia’s CPAC 2022. The protestors were unarmed, there were women and kids at the protest, they expected to be allowed to stage a peaceful protest.
What has large scale power generation got to to with (small) business regulation ?
The federal government decides the taxes, not the state government which has very minor ones in comparison- mostly taxes on transactions/sales of property and cars.
There isnt a coalition of labour and green, its the Liberals- Nationals who have an actual coalition as they dont have majority in parliament without it. Labour has a majority without the Greens. As for the senate , no government for decades coalition or not has control for many decades now. Smaller parties which there are many are played off against each other for baubles
“ Premier Dan Andrews established a track record of imposing some of the most business unfriendly lockdown laws in Australia. “
Some ?
The Queensland and West Australian governments lockdowns were just as strong
“Police were pelted with golf balls, batteries, and bottles during what was the third consecutive day of demonstrations against the Covid restrictions.”
From your link.
Under the laws that apply the government or Premier cant issue orders for the police while carrying out their duties. So a claim otherwise is baseless even when doing it as a denial _ remember Australian defamation law is very strict- the court can decided what a person really meant and hiding behind clever words wont work.
“Begging for private renewable investment”. Won’t happen. Here is why.
Even Warren Buffet (who owns a lot of wind) says it makes no sense without major subsidies. His utility company is admittedly just subsidy farming Iowa wind.
Victoria current debt is about 25% of its GDP, 50% higher than any other AUS province—about equal to NSW, Queensland, and Tasmania combined. Already Victoria is too broke to afford the subsidies that might entice private investment. And that is before it’s hostile business climate—which facts might be related.
I can relate from direct experience in running businesses in Victoria over 3 decades and still consulting to associates there.
Most projects and services in the broad infrastructure category there are a closed shop as far as chances of winning contracts controlled by VicGov.
If your company has not gained “pre-qualification” to their numerous supplier panels, you’re just making up the numbers by tendering.
The hoops you have to jump through to get on their “pre-qualified supplier panels” are heavily loaded with union-preferred / dominated interests.
I’d love a dollar for every time I’ve had the reply from a bureaucrat about why our admittedly competitive submission was not even considered – “sorry, our hands are tied”.
One of the businesses I consult to is going through this (again) at this very moment.
It’s risky enough investing time in trying to be a supplier to VicGov.
I’d hate to be investing big dollars in actually funding one of their union-run projects.
Victoria appears to be what California wants to be. AB5 was a gift to the unions, and Victoria seems to have such measures already well established.
You covered the situation in Victoria well.
The sad part is that the Victorian Liberals offer no alternative. I cannot see version 2 of Jeff Kennett in the wings primed to get the state out of its corrupt mess.
When the wind blows and/or the sun comes out, the price that all generators get paid drops to zero, or even goes negative. They have to pay to put electricity into the grid. When the wind stops and the sun goes down, the price skyrockets. This is because there are next to no renewables on the grid and they fall back on coal and gas. With this economics, why would any investor build renewables?
And for all those numpties out there, batteries aren’t generators, they are storage.
There’s only one thing for Danistan to do-
Victorian government in talks to secure a bailout in upcoming federal budget | news.com.au — Australia’s leading news site
After all Albo is the new empathetic Jacinda Adern with a shoulder to cry on-
‘Symbol of hope and inspiration’: Albanese listed in Times’ most influential people (msn.com)
Back in the 1980-90 era when we were exploring for new Australian mines (and finding them) we evaluated each year whether we would bother with Victoria, the State with the worst laws. Late in that era we made a small effort, not because the laws and regs had improved, but because the history of decent gold at Bendigo/Ballarat/Castlemaine was attractive.
How can present-day leaders dismiss the reality that Victoria’s history was put on the map and largely funded from this mining? That for decades, Victoria’s cheap, reliable electricity depended on big coal mines, now being closed down by politics? That today, all that is keeping the nation from bankruptcy is.exported mineral wealth? Talk about biting the hand that feeds you!
Our schools even teach pupils that mining is dirty and needs to be cancelled.
When did you ever see a mining personality nominated for Australian of the Year? The most recent winner was into something about female body relaxation, I hear.
Think about the levels of hate that control the minds of many of our present politicians. It is a sickness in need of some good doctors to treat. We still have some, when the TGA lets them do what doctors do.
Geoff S
“Renewable”?
Wind, solar, and battery systems last, at best 20 years, are not recyclable, and consume more energy in their construction and operation than they will ever produce.
You are being lied to each and every time someone calls these systems “renewable”.
Xi Dan Stairman dan anrOOZE..how the hell he got re elected?
but hes asskissed the teals n greentards
if hes done deals with china the crap will hit the blades
people who got suckered into PV and heatpump water heaters arent so happy
125litre water isnt enough for more than 2 person homes, but thats what the unsuspecting got. pv returns are down to 3c
and supply charges by my powerco just leapt from 99c a day to 1.26 for SFA
Yea Greens, put your own money where your mouths are! We all know that is not the way they work though. The watermelons always demand other peoples money to fund their agenda.
“Pretty nice country you got here. It’d be too bad if it burned down.”
Doesn’t matter if it is Red China or Black Rock, or a Bloomin’ Berg, Whoever comes in with the cash is going to want a big payback, right of way, a big chunk of the property, kickbacks, and recurring virgin sacrifice. Expect a visit from Dimon Jimmy, his boys will be around to set it up.
Good luck,most rational investors want a return on their money. Renewables don’t do that,
“95 per cent renewables target for 2035″ — total insanity, might as well hook everything up to a perpetual motion machine.
I can attest to the difficulty of working in Victoria and this goes back to the 1990s. I first moved to the state in about 1990 and eventually got to run a company in the years when John Halfpenny ran Victoria. Even when Kennett came to power the deeply entrenched Labor-Loving “deep state” bureaucrats continued to wield the power. +20 years later it seems little has changed.
Australia is a mess. What a disappointment. I wouldn’t think a state or province or what ever they call them would have the authority to make trade deals independent of the national government. Especially with a country like China. Australia really needs to get its act together and boot all these eco socialist freaks out of office.