Australian business is increasingly jaded and uneasy about the leadership of the major parties as the July election approaches. Company chiefs are particularly concerned by what they see as the Australian Labor Party’s war on large corporations and the Turnbull-led Coalition’s reluctance to face down trades union aggression or to pursue a medium term vision for the country by expanding the energy sector and financing infrastructure.
Jennifer Westacott, who heads the Business Council of Australia, has described Labor’s attacks as “dangerous”. The BCA has broken with tradition to launch a series of prime time television advertisements saying Labor’s policies will cost jobs and depress the economy. Ms Westacott says business is determined to fight back against one of the most aggressive anti-business campaigns in recent history.
Another leading critic has been Andrew Smith, chairman of Shell Australia, who had castigated political leaders for failing to grasp the need to develop Australia’s unconventional gas industry. The states of New South Wales and Victoria have halted all development of coal seam gas, despite each state having huge reserves of unmined coal; Queensland is making development much more difficult. Exploitation of shale reserves in central Australia is also subdued.
In a major speech, Smith said the industry was being held back by a “well-coordinated, well-funded, misleading and often dishonest political campaign” against unconventional gas exploration and extraction.
The problem for Mr. Smith and his cohorts is that in the early days of coal-seam gas, some elements of the industry were cavalier about the environmental risks and rode rough-shod over the misgivings of farmers on whose land operations were undertaken.
But, as Mr. Smith says, problems have arisen because of “manipulation by activists that have unfairly demonised both investors and workers that have contributed to the economic success of our nation.”
In his speech to the annual oil and gas industry conference, Mr. Smith issued a call to arms. “We must all put our heads above the parapet and contribute to the national debate.”, he said. “These are issues so important that our advocacy needs to transcend the interests of our businesses and industry, and make a greater contribution to the debate about our national prosperity. Policy areas such as meaningful industrial relations reform, and our industry’s role in providing reliable and affordable energy in a carbon constrained market.”
The Shell chairman listed a host of problems the industry needs to overcome, including rising costs and poor productivity, quoting a McKinsey study that says Australian resources projects are 30% more expensive than those in Canada. “Australia should always aspire to have the best paid workers in the world. But as a nation we must understand that this will only be sustainable if we are the world’s most productive workforce.”
Another big problem, as Mr. Smith described it, was that “there is no doubt our industry is the subject of an orchestrated, organised and well-funded campaign to stem in its further development”.
In a nod to climate change activists, Mr. Smith said it was absurd for the state of Victoria to be burning brown coal to generate electricity where the government had stifled huge potential developments of gas. “A well regulated onshore gas industry, like that in Queensland, is the only reliable way to displace the dirtiest power generation in the nation – as a partner with renewables. But neither Labor nor the Coalition has yet shown the political will to make this happen.”