Chapter 2Support for the bills
Introduction
2.1This chapter considers the evidence provided to the committee in submissions and at the public hearing, which overwhelmingly supported the intent of the Net Zero Economy Authority Bill 2024 (the bill) and the Net Zero Economy Authority (Transitional Provisions) Bill 2024 to establish the Authority to oversee Australia’s transition to a net zero economy.
2.2The chapter begins by summarising various aspects of the broad support for the bills and then considers the following matters in greater detail:
support for regions in transition;
support for workers in transitioning employment;
the business and energy sector; and
greater certainty for investors and superannuation funds.
Broad support for the bills
2.3Many witnesses and submitters noted that the Authority would be able to coordinate and oversee Australia's response to the substantial challenge of decarbonisation, while maximising the economic opportunities offered for industries, workers, and communities.
2.4It was broadly accepted that the Authority would greatly increase Australia's opportunities for growth in a net zero economy.
2.5The Next Economy, a not-for-profit regional economic development agency, highlighted the critical role the Authority would play in coordinating diverse stakeholders including federal, state and territory governments, noting it:
…applauds the decision to establish [the Authority] as an independent statutory authority, reportingto the Prime Minister. We also agree with the plan to provide targeted support through the Energy Industry Jobs Plan to transition workers from coal and gas fired power stations.
2.6Several stakeholders noted the dangers of a 'disorderly' transition. For example, the Australian Council of Trade Unions (ACTU) stated that, without the Authority, 'Australia would be uniquely at risk of experiencing an unjust, disorderly transition'.
2.7The Investor Group on Climate Change drew on international research to warn the committee of the greater economic costs to the global economy of a disorderly compared to an orderly transition:
the cost of an orderly transition is about one or two per cent of global GDP;
the cost of a disorderly transition is about five per cent of global GDP; and
the cost of doing nothing is about a 10 per cent reduction in global GDP due to the impacts of climate change.
2.8Similarly, Climateworks, an independent not-for-profit that 'bridges the gap between research and climate action', cast the Authority as 'a key element for achieving success from both an economic and an emissions perspective [that] will help ensure Australia's industries, regions and communities are positioned to prosper in a decarbonising global economy'.
2.9The Australian Manufacturing Workers' Union suggested it signalled a new approach to sustainable growth that would also benefit workers and the manufacturing sector:
For too long, environmental sustainability and creating more jobs in the manufacturing and energy production sectors have been seen as incompatible with one another. The [AMWU] rejects this framing. Our union believes that decarbonisation represents an unprecedented opportunity to revive our nation's battered but resilient manufacturing sector…The [bill] establishes the necessary framework to achieve an interventionist approach to maximising the benefits of the transition for Australian industry, whilst placing workers and the environment at the centre of this transition.
2.10The Centre for Future Work argued that the employment and labour transition mechanisms in the bill would be:
….innovative, important, and timely, and will meaningfully improve the prospects for workers in some fossil fuel energy activities to transition smoothly and without undue economic dislocation into other work, as their industries are phased out in line with Australia's climate policy commitments and the pressing need for Australia to quickly reduce greenhouse gas emissions. The transition measures envisioned in this legislation are strong, and backed up with important enforcement mechanisms–including through unique integration with the existing powers of the Fair Work Commission.
2.11The Grattan Institute noted that an Authority, as proposed by the bill, could 'help meet the challenges' of structural changes to the economy, providing that its design allowed for 'bottom-up changes, driven from the regions by regional communities,' and that it was retained as a long-term presence.
2.12The Centre for Future Work suggested the implemented bill could provide principles with the necessary flexibility to accommodate future needs:
by serving as a valuable precedent for the necessary extension of this or similar transition strategies to other groups of fossil fuel workers not yet covered by the provisions described in these Bills; and
providing important reassurance to other fossil fuel workers and their communities that the phase-out of fossil fuel production, processing and use can occur in a manner that does not undermine their livelihoods.
2.13Environmental organisations noted that the Authority would enable Australia to move towards better environmental outcomes while at the same time, supporting a 'just transition' for workers and communities, as Australia is bound to do under the Paris Agreement. For example, Friends of the Earth Australia submitted that:
This is a significant reform that will provide much needed guidance for economic transitions already underway and will be a key foundation stone for Australia to take ambitious action on the climate crisis while ensuring that workers and communities are not left behind.
Support for regions in transition
2.14The Authority's focus on supporting affected communities was well-received by many regional stakeholders. Several submissions noted the importance of the Authority's focus on ensuring a 'just transition' for communities and workers affected by decarbonising Australia’s economy. For example, the Smart Energy Council submitted:
The Authority's mandate to support and benefit regions and workers should assist with 'a just transition', where no community is left behind as the country moves towards a renewable energy-dominated future. This aspect of the bill underscores its importance from a socio-economic perspective, as it should assist with the transition and see both environmental and economic outcomes and, also support job creation in new industries.
2.15Similarly, the submission made by the Australian Education Union cast the establishment of the Authority:
…as a key mechanism to ensure the workers and communities currently reliant on carbon intensive industries for employment and economic activity, are provided with a just transition as the Australian economy decarbonises… it is also necessary to ensure that the regions that have been powering Australia over many decades, continue to thrive and grow, and importantly avoid the severe impact of an unjust transition.
2.16Likewise, the Hunter Jobs Alliance, which represents the people, businesses, and organisations of the Hunter Valley, submitted that:
We welcome the creation of a national Net Zero Economy Authority with the capacity and power to support regional authorities, local communities and individual workers over the long process of transition. We support the intention and strong design of this Bill and look forward to the work of the Net Zero Economy Authority in assisting communities that host emissions-intensive industries in making a fair and sustainable transition into the net zero economy.
2.17The need for an independent statutory authority to effectively guide regional communities through the net zero transition was supported by regional and local governments. In its submission, the Local Government Association of Queensland stated that:
As Queensland's economy transforms to a clean energy future, resource communities and their local councils need to ensure they have place-based plans that respond to the economic and social challenges that will bring. A successful transformation needs to be coordinated across government departments at a Federal and State level, but driven and delivered locally.
2.18According to their submission, the Isaac Regional Council was also a longstanding advocate for the creation of a Commonwealth Government entity to assist in the net zero transition. The council submitted that:
Isaac Regional Council has been very vocal on the need for a National Transformation Authority and targeted transformation planning for resource communities. In particular, the need for place-based plans to manage the transition to Net Zero and capitalise on local opportunities.
2.19The bill was also supported by organisations with expertise in assisting regional transition, by working with businesses and communities to ensure effective and sustainable development. For example, RE-Alliance submitted:
Governments, workers, communities and industries need a strong partner in a dedicated federal agency with the depth of funding to collaborate and coordinate many aspects required to support regions in navigating the transition. Community leaders and local governments want support to leverage clean energy investments into long-term economic prosperity for their regions so there will be good jobs and a future in their regions for decades to come.
The Net Zero Economy Agency is a key element required to build evidence-based, nationally coordinated programs for workforce and industry as we move away from fossil fuels and derive economic value from zero and low-carbon businesses, industries and products. It is economically sensible to reduce climate impacts and grow zero-emissions industries. Our major trading partners are heading in this direction and Australia has a strong comparative advantage in low-cost renewable energy resources.
2.20The Next Economy stated that:
Through our regional engagement we have consistently heard from all stakeholder groups that greater coordination of public and private sector participation and investment will help regions to transition their economies and agree that the Authority will play an important role in supporting this to happen in a more efficient and timely manner.
2.21Beyond Zero Emissions (BZE) drew attention to a different facet of support outlined in the bills and endorsed the Authority's focus on prioritising infrastructure and facilities in new energy and manufacturing:
Just as crucial skills are essential to enabling the new energy and manufacturing economy, so too is infrastructure. BZE welcomes the Authority's intent to focus on a priority pipeline of projects that include the refining and processing of critical minerals, energy storage, hydrogen production, and the development of green metals. This clarity and invigorated focus on prioritising infrastructure and facilities are welcomed as they complement—and are indeed essential to—delivering benefits to workers and communities.
Support for workers in transitioning employment
2.22Groups representing employees supported the broad reforms proposed in the bills.
2.23Notably, the ACTU made a submission that was explicitly endorsed by submissions made by other trade unions. The submission urged that the bills should be passed immediately, as there are currently 'at least' five coal-fired and four gas-fired powers stations with planned closures before 2030, with more to come. With this outlook, the ACTU submitted that thousands of workers will be affected, alongside their dependent families and communities, and so the bill should be passed:
…by 1 July, 2024 to ensure that the workers and communities currently reliant on these facilities for employment and economic activity are given the support they need, with enough lead-time to transition as the economy decarbonises. It is also necessary to ensure that the regions that have been powering Australia for generations can continue to thrive, avoiding the lasting socio-economic fallout of an unjust transition.
2.24The ACTU outlined instances where the closure of power stations has been managed badly, both in Australia and overseas, and drew the committee's attention to the serious and long-term effects on not only affected workers, but also their communities and regional economies.
2.25The Collieries' Staff and Officials Association, representing supervisory and professional staff in the coal industry, noted examples where closing mines had been handled badly, leaving affected workers with no assistance towards new careers, and communities with deep and complex social and economic problems. It argued these examples demonstrated a clear need for a transition Authority to provide 'government support to coal miners regarding information provision, retraining and redeployment into well paid jobs in the same region'.
2.26The Mining and Energy Union, which represents most coal miners and power station workers, stated that the Plan set out in the bill would provide a critically important support for workers affected by carbon emissions reduction transition:
The most important policy objective for supporting workers displaced by the energy transition is the creation of a tangible pathway to a new–and decent – job. Programs to support retraining (for example) and investment in the development of new industries in affected regions are both essential, but insufficient without a clear framework to facilitate worker redeployment.
The Energy Industry Jobs Plan, set out in Part 5 of the Bill, provides this framework.
Business and energy sector
2.27Stakeholders from the business and energy sectors were broadly positive about the establishment of the Authority as a key mechanism in transitioning to a net zero economy, noting that some concerns are discussed in the following chapter.
2.28The Business Council of Australia (BCA) supported the objectives of the bill targeted at promoting orderly and positive decarbonisation, the achievement of our emissions targets, and in supporting regions and workers in benefiting from the net zero transformation task. The BCA stated that the 'Government is in the unique position to assist in the coordination and integration required across the economy and the community to transition to net zero'.
2.29At the public hearing, Ms Wendy Black, Executive Director of Policy of the BCA, explained that the BCA strongly supported the bill and moving from an agency to the Authority because Australia is a critical phase in the transition now:
The next decade is going to be the one where, in these particular communities, you're going to get the biggest transition and the biggest change, but it's also a time of opportunity. But to get those benefits, you are going to have to bring a lot of people together, and the feedback that we get from our members is that, at the moment, despite all the goodwill, the investment in new technologies and trying to find the new workforce, it's just not coming together.
2.30The Ai Group submitted that it was 'strongly supportive of elements' of the bill, including that it was a 'positive step' towards ensuring better management of the economic, social, employment and regional impacts of transition'.
2.31Mr David Feeney from the Australian Energy Council, the peak body for electricity generation and retail business, supported the bill as a helpful step towards a whole-of-society focus to a fair energy transition:
We envisage the Authority as offering supplementary support to existing industry and regional efforts to support affected workers, in line with the accepted view that bottom-up locally driven efforts are more likely to reflect the needs of the affected community. With that in mind, we recognise that the government and authority want to make sure that the support programs industry are providing are adequate to support workers and maintain public and regional support for the energy transition.
2.32The Smart Energy Council, representing the renewable energy sector, welcomed the establishment of the Authority, as a 'critical step towards achieving a transition that is environmentally sustainable and also ensures long-term stability as Australia's and the world's energy shifts over time'. Furthermore:
…the Authority will help mitigate the impacts of climate change while fostering economic opportunities in emerging green technologies and industries. The SEC hopes that this will be in contrast to the impacts of energy transitions that have occurred overseas.
The Authority's mandate to support and benefit regions and workers should assist with 'a just transition', where no community is left behind as the country moves towards a renewable energy-dominated future. This aspect of the bill underscores its importance from a socio-economic perspective, as it should assist with the transition and see both environmental and economic outcomes and, also support job creation in new industries.
Greater certainty for investors and superannuation funds
2.33Investor groups, including superannuation funds, also welcomed the bill, as it would add certainty to their investment decisions, and assist them building sustainable portfolios.
2.34For example, the Clean Energy Investor Group observed that the bill set out a 'comprehensive strategy to reduce greenhouse gas emissions while fostering economic growth, aiming to position Australia as a global leader in renewable energy'. Moreover, it saw value in other aspects of the bill, noting:
the Plan is commendable as it ensures a just transition for workers affected by the shift from fossil fuel-based industries, promoting social equity and labour market resilience;
the clear governance structures outlined for the CEO and other officials within the Authority will underpin effective management and strategic decision-making; and
the bill's provision for dynamic adjustment of the Authority's functions and the Plan is crucial for adapting to the evolving landscape of the energy sector.
2.35Mr Erwin Jackson, the Managing Director of Policy for the Investor Group on Climate Change, stated that the establishment of the Authority has the potential to 'unlock billions of dollars for the transition' through improving 'information, coordination and communication flows with investors and industry'. It supported the Authority's role as the governments net zero 'shopfront' to improve information and communication to investors, as well as a facilitator of investment in initiatives, including through the Clean Energy Finance Corporation and the National Reconstruction Fund Corporation.
2.36The committee also received very positive views from several superannuation funds. For example, Ms Mary Delahunty, CEO of the Association of Superannuation Funds of Australia, stated at the public hearing that establishing the Authority would 'assist investors and communities to coordinate the enormous but crucial task' of transitioning Australia for the future prosperity of all.
2.37The following chapter sets out matters raised in evidence, as well as the committee's views and recommendation.