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We'll rein in energy costs, says Macfarlane


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Australian businesses and consumers pay too much for electricity, the nation’s Minister for Industry, Ian Macfarlane, has admitted.

Macfarlane has told an Adelaide business audience that energy generation costs are low in Australia – it’s the next stage that provides high costs.

The prices paid for electricity have to be “reined in” and “we’re working on that”, he said.

Macfarlane was talking about energy options at an American Chamber of Commerce lunch in Adelaide on Friday.

After his opening speech on the challenges facing Australia’s manufacturing industry, he was being interviewed by AmCham’s Leigh McClusky  when the conversation turned to electricity and other power options.

“I’m an unashamed supporter of nuclear power,” Macfarlane said.

“I see it as something that those countries that are embracing it, its providing them with a zero emission option.

“But I understand that we are spoiled for choice.

“We do have a very big coal-fired sector which provides very cheap electricity…at least at the power station gate.

“The cost after that needs to be reined in I have to say … we’re working on that.”

Mcfarlane said the options available make it difficult to make a case for nuclear energy.

“Then we’ve got gas and a substantial renewable energy sector, but Australians at this stage haven’t shown any inclination to go down that (nuclear) road, especially since Fukishima.

“At some point Australians will come back to that debate and hopefully we have a science debate, not a scare debate.”

Macfarlanes comments are likely to re-ignite debate on the role of the Australian Energy Regulator (AER) and recent decisions to allow electricity distribution companies to increase their charges.

The AER regulates energy markets and networks under national energy market legislation introduced in 2010.

Its functions, which mostly relate to energy markets in eastern and southern Australia, include setting the prices charged for using energy networks (electricity poles and wires and gas pipelines) to transport energy to customers.

The AER regulates retail energy markets in the ACT, South Australia, Tasmania (electricity only) and New South Wales.

Macfarlane also addressed the issue of Australia’s next generation of submarines and where they will be built.

In a wide-ranging assessment, he told reminded the audience that “you haven’t built a submarine in South Australia for almost 15 years, so this suggestion that thousands of jobs will be cut is a bit of a stretch”.

“This is not an industry assistance program, it’s not a regional assistance program, it’s a defence program where we aim to get the best submarine at the best price.”

Mcfarlane said that whatever decision is made, “there will be more jobs, more new jobs in SA”.

“No matter where the submarines are built, there is only one place that final fit out can take place and that’s here in South Australia.

“The final technical, highly sophisticated, top secret equipment that gets fitted to those submarines , has to be done here and the good news is it’s high value jobs, high value work.

“There will be more maintenance jobs.”



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