Australia’s increasing habit of choosing losers was highlighted again in the past week. Anyone but the most blinkered global-heating denier would know that Chinese demand for Australian coal would fall as renewables got cheaper, and that China wants to take some leadership on emissions to fill the vacuum left by the US under Trump.
Then last week, to make the matter bluntly obvious, politics entered the Chinese coal-importing equation. The Communist Party ordered Chinese coal users (both electricity and steel producers) not to order Australian coal, as payback for Australia playing politics with Covid-19, by demanding an inquiry into the virus’s Chinese source and the Chinese Government’s initial response to it.
Suddenly, Australia’s $14b annual coal exports to China are suspended. But we knew they were going to be wound down and end anyway, and yet we have done everything to pretend it would not happen, and carried on business as usual without a plan.
The Chinese Government has now put Australia on notice that it will source whatever increasingly smaller amount of coal it needs, from any other source than Australia unless Australia bends to its political will.
And with China’s new commitment to carbon neutrality by 2060, it can cite Australia’s poor record on making similar commitments to disingenuously justify its position.
Also this week, the International Energy Agency’s annual report found that solar power is now cheaper than new coal and gas generation. Yet the Government has demanded the private sector fund a new gas power station, or it will build it itself in defiance of voters’ wishes expressed in every opinion poll on the subject.
It is a bit ironic that the Australian Coalition Government is behaving in a similar way to the Chinese Communist Government – dictating to industry and becoming an industrial producer itself.
The cost of solar has fallen 18 per cent a year since 2010, and is only going to fall further. The cost of coal and gas will only go up. This year’s IEA report says coal has hit peak use and it is only downhill from here. It says the end of the coal era has been accelerated by the pandemic.
So, saving the planet aside, why is the Government backing losers instead of backing new winners? The answer can only be stupidity, ignorance or being beholden to donors. Or a combination of all three.
China’s coal move segues to another Australian losing choice over the past half decade. It has been a long time since a medium to large nation has projected power through all-out war against another nation, aside from multi-national regime- change events.
These days, power is being projected in ways like China’s coal move against Australia: economic manipulation. This is combined with soft power, cyber warfare and use of autonomous weapons.
Yet Australia has committed itself to hundreds of billions of dollars on weapon systems that suggest we might be invaded by another nation: submarines; jet fighters and ever more expensive manned vehicles which will be ever more vulnerable to cheap, small autonomous weapons in unproclaimed wars.
In this we have persisted with compatibility with US weapon systems because of yet other losing choices: joining the US in the Iraq and Afghanistan wars that were none of our business, and relying on the US as an ally when under Trump the US is proving selfish and unreliable with only the prospect of a slow return to pre-eminence if at all under a new president.
Also, in the face of China’s expansion of power, Australia made losing choices to severely cut back our diplomatic presence and use of soft power like Australian aid and the provision of Australian media services, especially in the Pacific.
Closer to home the choosing-losers syndrome has come home to roost again in the past few weeks. Since the migration bender begun by the Howard Government 20 years ago, Australia has been utterly dependent on high population growth to provide a mirage of sustained economic growth.
It has obviously been to the detriment of the environment and the amenity of the existing population, especially recent migrants, as it happens. But it has also created some structural imbalances.
Australia has relied on cheap youth labour on working visas, to pick our fruit crop. This is not available any more with the international borders closed. The fruit is rotting. Our university sector is also rotting having become far too reliant on overseas students seeking a back door to permanent residency.
We have made losing choices. With proper funding universities would never have become so dependent on overseas students. Proper wages should have been enforced in the orchards to make the jobs more attractive to locals, even if fruit prices rose.
We also have a “skills shortage” because the borders have closed. But we should have been training people already here instead of allowing employers the cheap option to employ people from overseas, leaving state governments to pick up the infrastructure and environmental costs of over-population.
This month’s pandemic-recovery Budget also did some loser picking. It targeted government support to low-employing manufacturing rather than high-employing education and childcare. Also, as I have long argued on these pages, for economy and fairness, childcare should be free. If more women entered the workforce it would be good for the economy and give women better prospects for a well-paying fulfilling career that would repay the investment in childcare many times over.
Yes, it is easy to be wise in hindsight, but it does not take much insight to know that Australia has been leaning into a losing trajectory for quite a long time. Too long, indeed. We must get smarter. And decision-makers in government must rid themselves of the festering, corrupt influences of corporate donations.
These days the biggest threat to Australian prosperity and security seems to me to be losing, dumb, donor-driven government decisions.
This article first appeared in The Canberra Times and other Australian media on 17 October 2020.