Australia\u2019s manufacturing industry is in terminal decline, falling to only around 5% of the economy in 2024, down from around 14% in the late 1970s.<\/p>\n\n\n\n
Australia has the lowest manufacturing share in the OECD. One of the recent causes of Australian manufacturing decline has been soaring energy costs on the East Coast of Australia. East Coast gas prices have tripled since liquified natural gas (LNG) exports commenced out of Gladstone eleven years ago, which has driven corresponding rises in electricity prices.<\/p>\n\n\n\n
Around 25% less gas has been supplied to the East Coast domestic market, despite gas production doubling over the past decade. According to ASIC, around 1400 manufacturers have collapsed since 2022-23. Over the last few years, major Australian manufacturers have downsized or closed completely.<\/p>\n\n\n\n
The reality is that if East Coast Australia begins importing LNG, the gas price will rocket from around $12 a gigajoule currently to import parity prices of around $20 a gigajoule. Electricity prices will also soar given gas\u2019s vital role in firming and as a marginal price setter in the wholesale electricity market.<\/p>\n\n\n\n
More Australian manufacturers will be driven out of business by high energy costs, and the only ones that will survive will be those that are non-tradable, like bricks, or reliant on government subsidies. Domestically made building material costs will also rise, making it more expensive to build homes and harder to meet housing supply targets.<\/p>\n\n\n\n
Put simply, the Albanese government must emulate the Coalition\u2019s gas reservation policy. Otherwise, Australia faces soaring energy costs, higher inflation, and further deindustrialisation.<\/p>\n\n\n\n
Macrobusiness<\/p>\n","protected":false},"excerpt":{"rendered":"
Put simply, the Albanese government must emulate the Coalition\u2019s gas reservation policy.<\/p>\n","protected":false},"author":22,"featured_media":217678,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"footnotes":""},"categories":[273,999,35],"tags":[10839,5982,10650,16738],"class_list":["post-217677","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-australia","category-australia-politics","category-breaking-news","tag-australian-labor-party","tag-canberra","tag-coalition","tag-manufacturing"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t