Latest news with #FutureMadeinAustralia
Sky News AU
3 days ago
- Business
- Sky News AU
Jim Chalmers resorting to new taxes is a misguided attempt to ‘purchase prosperity' as private investment in the Australian economy crashes
Earlier this month, a collapsed high-voltage wire near Strathfield Station brought Sydney's entire railway network to a halt, forcing commuters to endure days of chaos and delay. The State Government and rail officials scrambled to apologise, offering a fare-free travel day as compensation. But no number of free rides can repair the ancient cabling, rigid work practices, and flawed design that make the city's rail system so fragile. Sydney's rail meltdown is more than a transport failure - it is a metaphor for Australia's broader political and economic malaise. A system that appears to function smoothly on the surface is merely running on inertia. Beneath the facade lies decay: decades of short-termism, underinvestment, and complacency. This week's news that business investment is falling confirms the rot has spread to the foundations of the national economy and that the current government has little appetite for structural reform. Non-mining investment contracted by 1.6 per cent nationally in the March quarter, while private capital expenditure dropped by 5.3 per cent in Victoria in the three months to March. Yet private investment is the engine of job creation, productivity, and wage growth. Without it, the reverse holds: business shrinks, employment stagnates, and economic momentum falters. Capital - the lifeblood of any economy - flows to where it is welcomed and where returns are reliable. Under Treasurer Jim Chalmers, businesses are increasingly wary of investing in Australia, deterred by high costs, regulatory burdens, and policy uncertainty. The Albanese government's Future Made in Australia strategy risks remaining a slogan unless it can reverse this investment drought. But rising energy costs and an increasingly unreliable power supply are driving manufacturers offshore. On top of that, Australia's high labour costs and complex industrial relations system deter new ventures. CSL Chairman Brian McNamee captured the mood when he said businesses were reacting to 'an accumulation of hostile policies and government crowding out of enterprise'. Investment capital, he warned, 'will find homes elsewhere that are more welcoming and reward risk-taking'. These cracks in our economic edifice didn't appear overnight. Like Sydney's ageing power lines and outdated rolling stock, the deterioration has been years in the making. Australia's GDP per capita has now declined for seven consecutive quarters - a sign that, were it not for population growth through immigration, the country would be in recession. Productivity, the key driver of long-term prosperity, has flatlined. Over the past two decades, it has grown at just 0.7 per cent per year. In the last year, growth was a mere 0.5 per cent. Small wonder that living standards have been slipping since the pandemic. Whatever growth the economy shows is increasingly the product of government spending - now at 27 per cent of GDP, up two points from pre-COVID levels. But governments cannot purchase prosperity any more than they can restore a rail system with free travel days. Eventually, they resort to new taxes. Mr Chalmers' proposal to tax unrealised capital gains in superannuation is one such example - a measure that will discourage long-term savings and further undermine private investment. Self-managed super funds, often used to back small business and start-ups, will be particularly affected. For a cautionary tale, we need only look to Germany, a country long admired for its engineering excellence and export-driven economy. But as Wolfgang Münchau explains in 'Kaputt: The End of the German Miracle ' , complacency and underinvestment have taken their toll. Germany's efficiency endured as a reputation long after it disappeared as a rea lity. The nation failed to keep pace with the digital era, relying instead in analogue infrastructure and unreliable energy sources. Dependence on Russian gas and costly renewables sent electricity prices soaring - now among the highest in Europe. Meanwhile, Germany's vaunted rail system has become a symbol of national decline. Deutsche Bahn, once synonymous with precision and quality, is now plagued by delays, technical faults, and overcrowding. In 2024, just 62 per cent of long-distance trains arrived on time. In April, Swiss operator SBB cut two cross-border services, fearing Germany's dysfunction would spill over into their own network. The parallels with Australia are sobering. Both nations rode waves of prosperity driven by commodity exports while neglecting the need for reform. Both now face the consequences: rigid regulatory systems, soaring power prices, stagnant productivity, and eroded competitiveness. And in both countries, the signs of decline were ignored until something broke. Germany kept betting against the digital age. Australia, too, risks believing its own myth of resilience and economic strength, long after the underlying conditions have shifted. If we don't act now to address structural weaknesses, the next broken wire, literal or metaphorical, will leave more than just a railway in chaos. Nick Cater is a senior fellow at Menzies Research Centre and a regular contributor to Sky News Australia
The Advertiser
26-05-2025
- Business
- The Advertiser
Australia urged to spend big while green iron is hot
Australia has a unique opportunity to trade its dirty coal and gas industry for cleaner green iron market and make four times the revenue from its export by 2060, a study suggests. But there are hurdles to producing green iron in Australia, the report says, and government and businesses need to invest to beat rival nations racing to cash in on the opportunity. The Superpower Institute released the findings in its Green Iron Plan for Australia report on Monday, analysing potential restrictions and opportunities to establishing a local industry. The research comes three months after the government announced a $1 billion investment in green iron production, including $500 million to support existing and new developments. Green iron is produced using renewable energy resources such as hydrogen and electricity generated by the sun and wind rather than coal or gas, and has the potential to cut 90 per cent of emissions from the steelmaking process. Australia is considered a strong potential green iron producer as it is the world's biggest iron ore exporter, but the report identified three obstacles to its production. Early investors were not being given enough financial support, infrastructure to support its production was lacking, and the absence of an international carbon price made it hard to compete with fossil fuel-based iron, the report found. If these issues were addressed, Australia could have a clear pathway to producing green iron, cutting emissions and taking advantage of its natural resources, Superpower Institute chair Rod Sims said. "If anyone is going to make green iron, it's going to be Australia," he told AAP. "Every international study I've seen - and I've seen a few - says that if you want green iron, Australia is either one of the small number of top places or is the best place to do it." Introducing a green iron production tax credit of $170 per tonne could temporarily address the lack of a carbon price, the report found, while grants of up to 30 per cent could help to establish early green iron projects. Other recommendations include introducing a green hydrogen certification scheme and researching trade opportunities. Australia could generate up to $386 billion a year from green iron by 2060, the report found. Mr Sims said the nation should aim to have between two and four projects in operation by 2030. "Australia is the world's largest producer of gas and coal combined but they will go down as the world moves to net zero, therefore you need a foot in the other camp," he said. Small green iron plants are already planned in countries including Germany, Sweden and Namibia. Green iron projects in Australia include Fortescue's Christmas Creek project, expected to begin production before the end of 2025, and a $3.5 billion Gladstone project backed by Quinbrook Infrastructure Partners. Government commitments to green metals include $750 million from the Future Made in Australia fund and $500 million from the Green Iron Investment Fund. Productivity Assistant Minister Andrew Leigh said the government would seek to make strategic investments to help establish the industry. "No one thinks public investment is a substitute for private capital," he said. "There are moments, especially during structural transitions, when governments can play a useful role in reducing uncertainty, addressing market failures, and de-risking early stage ambition." Australia has a unique opportunity to trade its dirty coal and gas industry for cleaner green iron market and make four times the revenue from its export by 2060, a study suggests. But there are hurdles to producing green iron in Australia, the report says, and government and businesses need to invest to beat rival nations racing to cash in on the opportunity. The Superpower Institute released the findings in its Green Iron Plan for Australia report on Monday, analysing potential restrictions and opportunities to establishing a local industry. The research comes three months after the government announced a $1 billion investment in green iron production, including $500 million to support existing and new developments. Green iron is produced using renewable energy resources such as hydrogen and electricity generated by the sun and wind rather than coal or gas, and has the potential to cut 90 per cent of emissions from the steelmaking process. Australia is considered a strong potential green iron producer as it is the world's biggest iron ore exporter, but the report identified three obstacles to its production. Early investors were not being given enough financial support, infrastructure to support its production was lacking, and the absence of an international carbon price made it hard to compete with fossil fuel-based iron, the report found. If these issues were addressed, Australia could have a clear pathway to producing green iron, cutting emissions and taking advantage of its natural resources, Superpower Institute chair Rod Sims said. "If anyone is going to make green iron, it's going to be Australia," he told AAP. "Every international study I've seen - and I've seen a few - says that if you want green iron, Australia is either one of the small number of top places or is the best place to do it." Introducing a green iron production tax credit of $170 per tonne could temporarily address the lack of a carbon price, the report found, while grants of up to 30 per cent could help to establish early green iron projects. Other recommendations include introducing a green hydrogen certification scheme and researching trade opportunities. Australia could generate up to $386 billion a year from green iron by 2060, the report found. Mr Sims said the nation should aim to have between two and four projects in operation by 2030. "Australia is the world's largest producer of gas and coal combined but they will go down as the world moves to net zero, therefore you need a foot in the other camp," he said. Small green iron plants are already planned in countries including Germany, Sweden and Namibia. Green iron projects in Australia include Fortescue's Christmas Creek project, expected to begin production before the end of 2025, and a $3.5 billion Gladstone project backed by Quinbrook Infrastructure Partners. Government commitments to green metals include $750 million from the Future Made in Australia fund and $500 million from the Green Iron Investment Fund. Productivity Assistant Minister Andrew Leigh said the government would seek to make strategic investments to help establish the industry. "No one thinks public investment is a substitute for private capital," he said. "There are moments, especially during structural transitions, when governments can play a useful role in reducing uncertainty, addressing market failures, and de-risking early stage ambition." Australia has a unique opportunity to trade its dirty coal and gas industry for cleaner green iron market and make four times the revenue from its export by 2060, a study suggests. But there are hurdles to producing green iron in Australia, the report says, and government and businesses need to invest to beat rival nations racing to cash in on the opportunity. The Superpower Institute released the findings in its Green Iron Plan for Australia report on Monday, analysing potential restrictions and opportunities to establishing a local industry. The research comes three months after the government announced a $1 billion investment in green iron production, including $500 million to support existing and new developments. Green iron is produced using renewable energy resources such as hydrogen and electricity generated by the sun and wind rather than coal or gas, and has the potential to cut 90 per cent of emissions from the steelmaking process. Australia is considered a strong potential green iron producer as it is the world's biggest iron ore exporter, but the report identified three obstacles to its production. Early investors were not being given enough financial support, infrastructure to support its production was lacking, and the absence of an international carbon price made it hard to compete with fossil fuel-based iron, the report found. If these issues were addressed, Australia could have a clear pathway to producing green iron, cutting emissions and taking advantage of its natural resources, Superpower Institute chair Rod Sims said. "If anyone is going to make green iron, it's going to be Australia," he told AAP. "Every international study I've seen - and I've seen a few - says that if you want green iron, Australia is either one of the small number of top places or is the best place to do it." Introducing a green iron production tax credit of $170 per tonne could temporarily address the lack of a carbon price, the report found, while grants of up to 30 per cent could help to establish early green iron projects. Other recommendations include introducing a green hydrogen certification scheme and researching trade opportunities. Australia could generate up to $386 billion a year from green iron by 2060, the report found. Mr Sims said the nation should aim to have between two and four projects in operation by 2030. "Australia is the world's largest producer of gas and coal combined but they will go down as the world moves to net zero, therefore you need a foot in the other camp," he said. Small green iron plants are already planned in countries including Germany, Sweden and Namibia. Green iron projects in Australia include Fortescue's Christmas Creek project, expected to begin production before the end of 2025, and a $3.5 billion Gladstone project backed by Quinbrook Infrastructure Partners. Government commitments to green metals include $750 million from the Future Made in Australia fund and $500 million from the Green Iron Investment Fund. Productivity Assistant Minister Andrew Leigh said the government would seek to make strategic investments to help establish the industry. "No one thinks public investment is a substitute for private capital," he said. "There are moments, especially during structural transitions, when governments can play a useful role in reducing uncertainty, addressing market failures, and de-risking early stage ambition." Australia has a unique opportunity to trade its dirty coal and gas industry for cleaner green iron market and make four times the revenue from its export by 2060, a study suggests. But there are hurdles to producing green iron in Australia, the report says, and government and businesses need to invest to beat rival nations racing to cash in on the opportunity. The Superpower Institute released the findings in its Green Iron Plan for Australia report on Monday, analysing potential restrictions and opportunities to establishing a local industry. The research comes three months after the government announced a $1 billion investment in green iron production, including $500 million to support existing and new developments. Green iron is produced using renewable energy resources such as hydrogen and electricity generated by the sun and wind rather than coal or gas, and has the potential to cut 90 per cent of emissions from the steelmaking process. Australia is considered a strong potential green iron producer as it is the world's biggest iron ore exporter, but the report identified three obstacles to its production. Early investors were not being given enough financial support, infrastructure to support its production was lacking, and the absence of an international carbon price made it hard to compete with fossil fuel-based iron, the report found. If these issues were addressed, Australia could have a clear pathway to producing green iron, cutting emissions and taking advantage of its natural resources, Superpower Institute chair Rod Sims said. "If anyone is going to make green iron, it's going to be Australia," he told AAP. "Every international study I've seen - and I've seen a few - says that if you want green iron, Australia is either one of the small number of top places or is the best place to do it." Introducing a green iron production tax credit of $170 per tonne could temporarily address the lack of a carbon price, the report found, while grants of up to 30 per cent could help to establish early green iron projects. Other recommendations include introducing a green hydrogen certification scheme and researching trade opportunities. Australia could generate up to $386 billion a year from green iron by 2060, the report found. Mr Sims said the nation should aim to have between two and four projects in operation by 2030. "Australia is the world's largest producer of gas and coal combined but they will go down as the world moves to net zero, therefore you need a foot in the other camp," he said. Small green iron plants are already planned in countries including Germany, Sweden and Namibia. Green iron projects in Australia include Fortescue's Christmas Creek project, expected to begin production before the end of 2025, and a $3.5 billion Gladstone project backed by Quinbrook Infrastructure Partners. Government commitments to green metals include $750 million from the Future Made in Australia fund and $500 million from the Green Iron Investment Fund. Productivity Assistant Minister Andrew Leigh said the government would seek to make strategic investments to help establish the industry. "No one thinks public investment is a substitute for private capital," he said. "There are moments, especially during structural transitions, when governments can play a useful role in reducing uncertainty, addressing market failures, and de-risking early stage ambition."
The Age
14-05-2025
- Business
- The Age
Net zero has been ground zero for energy ambition. What a chance we have now
This opportunity is redolent of the one that was seized by the Curtin and then Chifley governments during and immediately after World War II. John Curtin relied on two independents to govern through his first term from 1941 to 1943. The 1943 election delivered an overwhelming majority and a parliament like the one emerging now after May 3. The second Curtin government and the Chifley government that followed Curtin's death at the end of World War II established an economic reform programme that set up Australia for a quarter of a century of full employment with rising living standards for a growing population. The Chifley government was defeated in 1949 after the leading opposition figure, Robert Menzies, abandoned his United Australia Party, which had become captured by vested business interests. After the United Australia Party's catastrophic defeat in 1943, he established a Liberal Party that could appeal to broader interests and values of the democratic Australian polity. After the election, the Coalition holds only about 15 per cent of seats in the eight capital cities where most Australians live. A 21st-century Menzies would recognise the central role of Coalition approaches to climate and energy policy in the collapse of its electoral support in metropolitan Australia. Loading The renewed Albanese government has an opportunity to deliver the policies that can underpin Australia's use of its exceptionally rich renewable energy and sustainably harvested biomass resources to supply zero-carbon goods that other countries cannot supply economically for themselves. On election night, Albanese restated his commitment to using Australia's clean energy advantages to build a Future Made in Australia. Treasurer Jim Chalmers noted the opportunity that a strong electoral position provided to implement this vision, and told Australians it would not be wasted. Australian exports of goods embodying renewable energy could reduce global emissions by up to 10 per cent. They would generate export income for Australians vastly larger than are now provided by the gas and coal industries, which will decline as other countries reduce carbon emissions. The new industries are large enough to drive restoration of growth in Australian productivity and living standards after the dozen years of stagnation that began in 2013. The most important industries to drive Australia – the superpower industries – use hydrogen made with renewable energy. Recent announcements that many prominent hydrogen projects have been closed or shelved has generated talk that hydrogen is dead, or too underdeveloped for independent life. Like Mark Twain's death, those rumours are exaggerated. Apply sound economic principles to policy and the first hydrogen-based investments in new export industries are ready to go now. Hydrogen-based iron-making is ready for investment in the Upper Spencer Gulf of South Australia. Whyalla will have a sustainable future in iron-making based on green hydrogen, or it will have no sustainable future at all. The May 3 election has not changed in any way the physics, economics or ethics of climate change. What it has changed is the capacity of government in Australia to establish and maintain policies that will allow us to reduce domestic emissions in line with our international obligations. Loading It has strengthened the capacity of government to introduce and sustain policies that support Australia in contributing disproportionately to global decarbonisation by supplying goods embodying renewable energy that the high-income economies of North-East Asia and Europe cannot supply at reasonable cost from their own resources. It has opened an opportunity for Australia to leave behind a dozen years of stagnation of living standards and to enter a new era of full employment with rising incomes for an increasing population.
Sydney Morning Herald
14-05-2025
- Business
- Sydney Morning Herald
Net zero has been ground zero for energy ambition. What a chance we have now
This opportunity is redolent of the one that was seized by the Curtin and then Chifley governments during and immediately after World War II. John Curtin relied on two independents to govern through his first term from 1941 to 1943. The 1943 election delivered an overwhelming majority and a parliament like the one emerging now after May 3. The second Curtin government and the Chifley government that followed Curtin's death at the end of World War II established an economic reform programme that set up Australia for a quarter of a century of full employment with rising living standards for a growing population. The Chifley government was defeated in 1949 after the leading opposition figure, Robert Menzies, abandoned his United Australia Party, which had become captured by vested business interests. After the United Australia Party's catastrophic defeat in 1943, he established a Liberal Party that could appeal to broader interests and values of the democratic Australian polity. After the election, the Coalition holds only about 15 per cent of seats in the eight capital cities where most Australians live. A 21st-century Menzies would recognise the central role of Coalition approaches to climate and energy policy in the collapse of its electoral support in metropolitan Australia. Loading The renewed Albanese government has an opportunity to deliver the policies that can underpin Australia's use of its exceptionally rich renewable energy and sustainably harvested biomass resources to supply zero-carbon goods that other countries cannot supply economically for themselves. On election night, Albanese restated his commitment to using Australia's clean energy advantages to build a Future Made in Australia. Treasurer Jim Chalmers noted the opportunity that a strong electoral position provided to implement this vision, and told Australians it would not be wasted. Australian exports of goods embodying renewable energy could reduce global emissions by up to 10 per cent. They would generate export income for Australians vastly larger than are now provided by the gas and coal industries, which will decline as other countries reduce carbon emissions. The new industries are large enough to drive restoration of growth in Australian productivity and living standards after the dozen years of stagnation that began in 2013. The most important industries to drive Australia – the superpower industries – use hydrogen made with renewable energy. Recent announcements that many prominent hydrogen projects have been closed or shelved has generated talk that hydrogen is dead, or too underdeveloped for independent life. Like Mark Twain's death, those rumours are exaggerated. Apply sound economic principles to policy and the first hydrogen-based investments in new export industries are ready to go now. Hydrogen-based iron-making is ready for investment in the Upper Spencer Gulf of South Australia. Whyalla will have a sustainable future in iron-making based on green hydrogen, or it will have no sustainable future at all. The May 3 election has not changed in any way the physics, economics or ethics of climate change. What it has changed is the capacity of government in Australia to establish and maintain policies that will allow us to reduce domestic emissions in line with our international obligations. Loading It has strengthened the capacity of government to introduce and sustain policies that support Australia in contributing disproportionately to global decarbonisation by supplying goods embodying renewable energy that the high-income economies of North-East Asia and Europe cannot supply at reasonable cost from their own resources. It has opened an opportunity for Australia to leave behind a dozen years of stagnation of living standards and to enter a new era of full employment with rising incomes for an increasing population.
Techday NZ
14-05-2025
- Business
- Techday NZ
What CFOs need to know about smarter building management
As businesses face rising energy costs, evolving regulations and growing ESG expectations, Chief Financial Officers (CFOs) are increasingly required to take the lead to ensure companies are compliant and delivering operational outcomes. Beyond financial oversight, CFOs are taking a leading role in ensuring that infrastructure investments align with long-term sustainability and cost-saving goals. As we understand, the recently passed Future Made in Australia policy highlights the Australian Government's commitment to clean energy, technology and innovation – reinforcing the need for businesses to adopt smarter, more efficient building management strategies. Additionally, new reporting requirements require large businesses to disclose climate-related risks, making energy efficiency and sustainability a bottom-line priority rather than just a compliance tick box. For instance, the Australian Government Emissions Reporting is another requirement which supports transparency, all Commonwealth entities and Commonwealth companies are required to report in their annual reports, the emissions from their operations in Australia or Australia's external territories . This is providing a picture of emissions from operations across all Commonwealth entities and companies, and helping to prepare for the phased implementation of the Commonwealth Climate Disclosure initiative. In this evolving landscape, CFOs cannot afford to overlook the role of building infrastructure and management in their financial and sustainability strategies. Outdated Heating, Ventilation and Air Conditioning (HVAC) and cooling systems are not just a maintenance issue – they are a major drain on operational budgets with high energy consumption and increasing carbon footprints. As expectations around ESG and financial caution grow, CFOs need to reframe smarter building solutions as both a cost-cutting measure and a long-term investment in sustainability. Here are three key strategies to consider: #1 Implement digital energy management to cut costs and reduce emissions Many businesses may lack real-time visibility into their buildings' energy consumption, resulting in inefficiencies, unnecessary costs and excessive emissions. For example, a commercial office building running HVAC systems at full capacity overnight, despite minimal occupancy, is a common scenario where energy waste occurs. In a carbon-conscious world, corporations face a significant challenge as buildings contribute over 40% of global energy and GHG emissions, with HVAC systems alone responsible for nearly 15%. By implementing digital energy management solutions, businesses can set energy efficiency targets, track real-time consumption and automate system adjustments to minimise waste. Companies such as Automated Logic (part of Carrier) use advance algorithms to continuously optimise HVAC performance, adapting to occupancy patterns and weather fluctuations. Beyond reducing costs, digital energy management solutions also equip CFOs with credible, measurable insights into energy usage and emissions reduction. This may assist compliance with mandatory disclosure. #2 Adopt Cooling-as-a Service (CaaS) to improve cash flow and sustainability Cooling systems such as chillers or rooftop units are among the largest energy consumers in commercial buildings and replacing outdated units requires substantial capital investment. Cooling-as-a-Service (CaaS) allows customers to contract for ongoing, reliable operation and maintenance of cooling systems over an extended period and predictable payments rather than incurring an up-front capital cost for system or equipment purchases. The financial model allows customers to focus on their core business while benefiting from expert management of cooling infrastructure, ensuring comfort and operational efficiency. For CFOs, CaaS offers more than just predictable costs. It delivers a strategic path to modernise infrastructure, enhance energy performance, and meet ESG targets without straining capital budgets. #3 Invest in smart building management to increase asset value and productivity Commercial buildings that do not meet evolving sustainability benchmarks may risk declining asset values and reduced tenant demand. In commercial real estate, properties with low energy efficiency ratings often struggle to attract premium tenants, as companies prioritise sustainable workspaces that align with their own ESG commitments. Moreover, industrial facilities with outdated infrastructure face higher insurance costs and operational risks, making them less desirable for long-term investments. Integrating thermal battery technology and other energy storage solutions can turn buildings into dynamic energy assets, reducing dependence on traditional grids while improving energy resilience. Additionally, pursuing Green Star or NABERS certification enhances property value and tenant appeal. These accreditations act as differentiators in a market that prioritises sustainability, helping businesses achieve higher occupancy rates, improved rental yields, and long-term asset resilience. CFOs play a crucial role in driving cost-effective, ESG-aligned building management strategies. By integrating digital energy management, Cooling-as-a-Service, and smart building technologies, they can improve operational efficiencies, enhance sustainability performance, and secure competitive advantages in an evolving regulatory and economic landscape. "Disclaimer: This is for general information and is intended for general guidance only and Carrier is not liable for any loss or damages arising out of the use of this information".
