Source : the age
Labor will offer $2 billion to help aluminium smelters cut their use of fossil fuels and shift to renewable energy in a bold election pitch to support thousands of manufacturing jobs, contrasting the subsidies with the Coalition plan to build nuclear power stations.
The federal plan will allow four big smelters to claim tax credits for every tonne of aluminium they produce under contracts from renewable electricity suppliers, in a direct pitch for blue-collar votes ahead of the election.
The subsidies will flow to smelters at Portland in Victoria, Tomago in NSW, Gladstone in Queensland and Bell Bay in northern Tasmania, all in key seats where big industries confront rising electricity prices and workers fear job losses.
Tomago aluminium smelter in Hunter Valley, NSW
Prime Minister Anthony Albanese will announce the plan on Monday in the NSW Hunter Valley, home to the Tomago smelter, with the claim that the credits will help quadruple the aluminium sector to $6 billion in annual revenue by 2050.
Opposition Leader Peter Dutton has blamed Labor for the increase in electricity prices and is promising to bring costs down with a $331 billion investment in seven nuclear power stations by 2050, arguing they will be more reliable than solar and wind power.
Albanese is planning a series of manufacturing policies before parliament resumes on February 4, with Labor ministers fanning out to key electorates over the next fortnight to campaign on energy, health, roads and other key issues for voters.
In a sign of the way local issues could decide key seats in a tight election, Albanese promised $500 million on the weekend for the Fifteenth Avenue road project in western Sydney to link Liverpool to the new Western Sydney International Airport, and Dutton matched the promise on Sunday.
Dutton also launched a pitch to small business voters over the weekend with a promise to let them claim up to $20,000 in tax deductions for meal and entertainment expenses.
Small business groups and the hospitality sector welcomed Dutton’s policy, which he said would last for two years and exclude alcohol, as a way to sustain spending in cafes and restaurants.
The four big aluminium smelters are key flashpoints in the argument over the shift to renewable energy, with the Portland site recently sealing a nine-year energy deal to cut its use of fossil fuels, while the Tomago site warned in November that the cost of clean energy was too high.
Industry Minister Ed Husic said the new policy would get “jobs up and emissions down” by using the production credits to support the case for renewable energy at each smelter.
Alcoa’s Portland aluminium smelter Credit: Andrew De La Rue
The Bell Bay smelter is in the marginal electorate of Bass, the Gladstone site is in the Nationals seat of Flynn, Portland is in the Liberal seat of Wannon and Tomago is in the seat of Paterson, held by Labor on a margin of 3.3 per cent and targeted by the Liberals.
While the Bell Bay smelter has access to clean power from Tasmania’s hydro industry, the transition to renewables is more challenging at the three other locations. The federal scheme will be based on contracts with each company, negotiated separately.
American company Alcoa runs the Portland smelter with Marubeni and Citic as minority shareholders, employing 760 people. With demand for aluminium rising, it plans to ramp up production after reaching an energy supply contract with AGL in September.
At Tomago Aluminium, however, chief executive Jerome Dozol warned in November that renewable energy was too expensive and the company would not be able to meet goals to cut greenhouse gas emissions by 2030.
“The price of electricity on offer is too expensive for us to keep operating without government intervention,” he said. Tomago employs more than 1,000 workers.
Rio Tinto, the mining giant that operates the Bell Bay and Gladstone smelters, backed the Labor policy in a crucial move when the Coalition is seeking corporate support for its nuclear plan.
The chief executive of the company’s Australian operations, Kellie Parker, said traditional energy sources were becoming uncompetitive and the new policy would help “future-proof” the industry.
The Australian Aluminium Council, which has sparred with the government over its measures to impose costs on companies for their carbon emissions, also backed the Green Aluminium Production Credit.
Council chief Marghanita Johnson called the new policy a “substantial step forward” for the sector and said it would support 75,000 direct and indirect jobs.
Opposition Leader Peter DuttonCredit: Luis Enrique Ascui
Dutton stepped up his attack on the government over energy policy on Sunday in a speech to Liberal supporters in the Queensland electorate of Ryan, held by the Greens but previously held by the Liberals.
“We know that our economy is hamstrung by exorbitant energy costs, and thanks to Labor’s policies we’re paying some of the highest power prices in the world,” he said.
“The Albanese government’s reckless renewables-only policy will carpet Queensland’s prime agricultural land and national parks.”
The federal government energy policy does not support renewable energy alone. It assumes the construction of new gas-fired power stations over the decades ahead to provide electricity when solar, wind and other sources are not available.
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