SOUTH Australia’s economic failure could drag the Australian economy down with it. SA receives $1.30 in GST revenues for every dollar it spends, yet ABS figures show that from 1984-2014, 80,477 South Australians left SA permanently. Most were in their 20s and 30s, young workers seeking a better future elsewhere.
Tom Playford was premier from 1938 until 1965. He turned SA into an industrial powerhouse. SA’s population doubled during his reign. Today it’s a different story. An InDaily web story named 20 major industries that have closed or moved interstate. Companies included Mitsubishi and Bridgestone where national issues could be blamed, but names like Sanitarium, Sheridan, Qantas Catering, the Port Lincoln Tuna Cannery, Angas Park and McCain Foods point to a bigger problem.
Closure of Holden and its suppliers are another nail in SA’s coffin.
Regular readers of this column will recall the story I was told at the Mitsubishi factory. The spokesman said their engine plant was closing because, “There simply is not enough electricity”. Chrysler-Mitsubishi had, for years, been a major exporter of aluminium castings.
Aluminium is sometimes called “congealed electricity” because of the amount of power it consumes. Australia once produced the cheapest aluminium in the world, with many of these plants in SA.
Not today. Latest casualty is the New Castalloy factory, which produces the aluminium wheels for Harley-Davidson motor bikes. Donald Trump’s corporate tax reductions calling on American companies to bring their manufacturing jobs back to the US may be a factor.
But costly intermittent power, blackouts, and aluminium don’t go together. Union leader Peter Lamp said, “… the workers and the way they operate down there has nothing to do with the decision …”. He may be right. Workers are the victims of poor energy policy.
Adelaide’s ROH Wheels has long been part of the Australian automotive scene. But Holden and Ford started buying aluminium wheels from China. Only Toyota remained loyal, and now they have gone too. So why can’t SA manufacturers compete? The answer is energy.
In 2014 gas was costing ROH about $1 million each year. Gas supply costs rose by up to 70 per cent in 2017. To survive, ROH will need to find export markets. Skyrocketing energy costs could price Australian products out of world markets.
Last year Dick Smith was saying that Coles and Woolworths are threatening to take some of his products off their shelves because a French import is cheaper. High power prices are stopping him from cutting production costs.
SA’s suicidal commitment to wind power is killing jobs. Their $550million Tesla battery can only support the whole system for a few minutes. SA will pay $114million in 2017-18 for costly, polluting diesel generators to reduce blackouts when the wind doesn’t blow.
A Sydney Morning Herald story last Wednesday said that where electricity costs on Tuesday were about $181 a megawatt hour, they are predicted “to soar to … nearly $14,000 a megawatt hour in South Australia as temperatures are forecast to rise to … 38 degrees in Adelaide.” Wind energy only managed between 20 and 35 per cent capacity last Wednesday.
On Wednesday power failed during an operation at Royal Adelaide Hospital …