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.”
…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 – 5.00am
Victoria 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.
…Read more: https://www.afr.com/policy/economy/victoria-is-the-hardest-place-in-australia-to-do-business-survey-20220207-p59udj
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’
UPDATED 2:11AM NOVEMBER 20, 2010, FIRST PUBLISHED AT 12:00AM NOVEMBER 20, 2010
UNIONISTS 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’.
…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
Clean 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.
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.
…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.