As we’ve been writing for a while now, the last thing Australia needs is to invent new industries to employ workers, who are becoming an increasingly scarce commodity. Both sides of politics want us to get into building and crewing nuclear submarines. Peter Dutton wants a whole new nuclear power industry. And Labor is now throwing $1 billion at manufacturing solar panels — all part of our effort to be a “renewable superpower”, and also because, apparently, Australia invented the solar panels before losing control of the technology, so we’re really just bringing solar panels “home”.
The $1 billion price tag is small compared to the tens of billions Dutton’s nuclear fantasy will cost and insignificant compared to the waste of money involved in AUKUS, but Albanese’s solar panel investment might be the dumbest of the lot.
Why? Because other, much bigger governments, especially China, are also subsidising solar panel production — resulting in a huge production glut right at the time when Australia, belatedly, is joining in the stupidity.
A fortnight ago there was a rush of reports about massive job cuts at the world’s biggest solar panel maker, LONGi Green Energy Technology of China — perhaps up to one-third of its workforce. LONGi rejected the reports and said it was only planning to cut 5% of its total headcount of 80,000. The reason is the surge in global supplies of solar energy cells.
As the Financial Times noted, LONGi was part of Xi Jinping’s quest for self-sufficiency and even mastery of crucial renewable technology sectors. As protectionism always does, that has prompted China’s competitors, the European Union and the United States, to hit back both with their own subsidies and with blocks on Chinese exports, although these appear to be doing little to curb China’s growing dominance of the solar panel sector. But there is now a massive global oversupply of solar panels.
As a result, there’s never been a better time to buy solar panels — and never been a worse time to get into the production of them.
If, as Albanese says, the expenditure in solar panel manufacturing is about securing supply chains, that could easily be accomplished by redirecting that $1 billion to buying up Chinese solar panels so cheap they’re now being used as garden features, and storing them for use on Australian rooftops. But that lacks the political appeal of last week’s announcement in the Hunter Valley.
So what will we do with all the Australian-manufactured solar panels? Force the local industry to use them, pushing up the costs of renewables at a time when they should be falling?
Labor’s obsession with manufacturing — one that the Coalition for the most part shares, despite Tony Abbott chasing the car industry out of Australia — continues to reflect both the power of the (climate denialist) Australian Workers Union on the right of the party, and the Australian Manufacturing Workers Union on the left. It also reflects the mindset of many not just within the union movement or Labor, but more broadly, that manufacturing is somehow a more real economic activity than services industries or extractive industries.
The story of the Australian economy over the past 30 years has been the rise and rise of extractive industries and service industries. Our mining industry is very, very efficient, and the iron ore industry is cutting edge technologically: it is far advanced in areas like remote-controlled trains and autonomous vehicles compared to other countries — though that doesn’t stop it from being derided as merely “ripping dirt out of the ground”. Our agricultural industry, while not producing anywhere near as much in terms of export values, has enjoyed massive productivity growth and now exports and produces far more, with far fewer workers and less water per unit of production, than it ever used to.
And our services industries in areas like education and tourism are also massive export earners, reflecting Australia’s natural advantages in education and lifestyle.
Meanwhile, like every other western country, the proportion of the economy and workforce devoted to services has grown massively, with the new frontier of employment being caring services, from early childhood to old age and everywhere in between — all heavily feminised workforces.
But ignore all that, Labor is saying let’s invest more in traditional male-dominated manufacturing, despite Australia being hopelessly uncompetitive in production costs and scale, and not having enough workers for the rest of the economy let alone new industries.
And all of this, despite this being literally the worst time in history to invest in solar panel production. Dumb, dumb, dumb.
