The nation risks failing to take full advantage of the opportunities and benefits provided by net zero transformation without more decisive action across all levels of government, industry and the community, Treasurer Jim Chalmers has said.
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In a major speech outlining the government's approach to drive the nation's energy transformation and maximise the opportunities it provides, the Treasurer said "really important progress" had been made but warned much more needed to be done.
Dr Chalmers said the country had an abundance of solar and wind sources that, along with the world's largest pipeline of renewable hydrogen investment proposals, positioned it to become a renewable energy superpower.
But he warned that the country could fall short of realising that goal.
"Without more decisive action, across all levels of government, working with investors, industry and communities, the energy transition could fall short of what the country needs," he said.
"Put simply, to meet our potential, to maximise our advantages in renewable energy and the economic and industrial opportunities that will come from them, we need to get more projects off the ground, faster."
The Treasurer said important building blocks supporting the transition had been put in place but "we will need to do even more to ... meet our ambitions".
The government estimates an extra $225 billion of private and public investment will be needed by 2050.
![Treasurer Jim Chalmers says Australia might miss the renewable energy superpower mark. Picture by Gary Ramage Treasurer Jim Chalmers says Australia might miss the renewable energy superpower mark. Picture by Gary Ramage](/images/transform/v1/crop/frm/202296158/9c091ee9-d07f-4301-ae6a-3e527bee6aa3.jpg/r0_142_4000_2666_w1200_h678_fmax.jpg)
But Dr Chalmers said "just pumping capital into the transformation won't be enough" without reducing barriers including skills shortages, inadequate infrastructure and red tape.
Government action so far included a comprehensive approach to skills development through the Employment White Paper and the National Energy Workforce Strategy, including 10,000 green energy apprenticeships, he said.
Other measures included boosting economic dynamism through the Competition Review, encouraging investment by modernising capital markets and streamlining foreign investment processes and addressing critical infrastructure gaps through the Net Zero Authority.
Other countries are pushing hard on their own energy transformations, most notably China and the United States through its $520 billion Inflation Reduction Act.
The massive size of the Biden administration's program has raised concerns that it will suck in capital, skills and resources from across the world, including Australia, hampering local transition efforts.
Dr Chalmers said the US program was demand driven so its eventual size might exceed $520 billion and come close to $1 trillion.
The treasurer acknowledged that Australia would have to "incentivise capital, incentivise investment".
But he said the government's approach would complement but not copy such initiatives.
The energy transformation will be a centrepiece of the 2024 budget "through government investment and doing more to get private capital flowing towards our priorities", the Treasurer said.
He said the government had identified four initial industry priority areas, including refining and processing critical minerals, the manufacture of renewable generation and storage technologies, producing renewable hydrogen and forging green metals.
"By building Australia's capabilities in areas like these, we will make our economy more resilient, strengthen international partnerships, expand opportunity to the regions ... add more value and support a future made in Australia," the Treasurer said.
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The policy framework to guide this will evolve and adapt informed by analysis and advice from the nation's key economic institutions, including the Productivity Commission, he added.
As part of this, Dr Chalmers said the government had been in talks with incoming commission chair Danielle Wood on a Statement of Expectations which would "make clear that guiding our country towards a successful net zero transformation will be one of the key focus areas for a revamped and renewed Productivity Commission".
This will be the first such statement involving the commission and Dr Chalmers said it was important because the energy transformation should be "absolutely central to the work of the PC".
"We think the Productivity Commission has been an underutilised resource. It is, in lots of ways, the think tank for the Australian people," he said.
"I really believe that the net zero transformation will be the defining piece of the defining decade," the Treasurer said.
"Whether we succeed or fail ... will in large part be determined by how we maximise our advantages and leverage our strengths when it comes to energy in our economy. That's why it's such a major focus of the government."
But acting Opposition Leader Sussan Ley dismissed Dr Chalmers' comments as "just hopeless".
"I'm so disappointed that this government has not found a way over 18 months into their first term to actualise any energy policy. And they've never had their energy policies costed by the department or any credible sources," Ms Ley said.