Shaping Change in Australia

Australia's new Labor government has work to do, and chemical engineers can help, says Alexandra Meldrum

THE election of a new Labor government in Australia brings stronger focus on climate action and productivity– areas that employ many chemical engineers. In the early days of the new government, announcements are coming thick and fast. Complex decisions must be made, and there will be tradeoffs, which will need to balance the benefits and risks of the present, with those of the future. The change in government is taking place at a time of increased global volatility, and structural change in industries employing Australian engineers.

In his victory speech, the new Prime Minister, Anthony Albanese, spoke of his priorities: the opportunity to shape change and work together to end the climate wars, for Australia to be a renewable energy superpower, to drive productivity, and to strengthen the care sector.

I think that this brings change and opportunities in many areas employing chemical engineers.

The change of government is happening in a period of global volatility, with high inflation and supply chain constraints. There are labour shortages and price spikes in key areas such as food, energy and construction. A historical inflection point, many long-term trends have shifted or accelerated, including climate change, energy transition, geopolitical pressures, structural changes in the economy and technological development, including data and the digital economy. 

The last few years have been a tough time for many in Australia. Some communities are still recovering from drought, bushfires, floods, pandemic, and still more floods. Our communities have ongoing health, mental health and wellbeing challenges. Polls had indicated the top voter priorities included climate change, cost of living and a desire for a strong economy with jobs.

Societies are defined by how they respond to challenges

I think the focus on climate change and renewable energy points to strong opportunities for those with chemical engineering expertise. Some industries employing chemical engineers will decline, and other areas will expand and are desperately seeking skilled employees. 

The new government has announced a jobs summit to focus on pay deals and productivity. I think there also needs to be renewed collaborative efforts to address climate change and sustainability. This would address topics such as energy transition and circular economy – areas where chemical engineers bring expertise and work well with other professionals. This is not an activity where government, universities, business or professionals can achieve change on their own – the greatest synergies will come through collaboration. Decisions need to take a longer perspective, and balance value against risk.

I am encouraged by the new emphasis on working together. When I was the lead from the Department of Industry on the Taskforce addressing circular economy, I especially valued the input from our colleagues across other government departments, as well as industry, consultants and academia. We couldn’t have developed the analysis without that cooperation.  Bringing people together, we brought deeper expertise and insights, and created greater ownership for delivery of the policy.

What do we need?

I think we need a detailed integrated plan for climate change, to ensure the skills, innovation, infrastructure and collaboration to achieve the climate change goals, whilst carefully managing challenging questions such as managing an energy transition, to be orderly, just and sustainable.

We need to embrace lifelong learning. People are likely to have many different careers during their lifetimes. Skills training and education, including short-term courses, can all assist with the upskilling and employment transition that is necessary to address labour shortages.

Government policy and plans should be based on expert advice, incorporating the views of community. They should be evidence-based, with careful consideration of the benefits and costs. The design should focus on outcomes, be built on sound evaluation principles, and take a long-term view.

Consultation is important. When I was in the National Taskforce to develop the National Hydrogen Strategy, we got outstanding inputs by consulting with a range of industry and community stakeholders, as well as the scientific experts. Similarly, when I led our consultation work on productivity, the best ideas came from consultation. Chemical engineers should be looking for those opportunities to engage in projects and to speak out on areas where we can offer independent, evidence-based expertise.

It's important to be open to new ideas and innovation. When I led our consultation work on productivity, we designed the consultation to ensure that we brought people together from a wide range of industries and regions to discuss topics such as energy, water, infrastructure and skills. The insights from roundtable discussions and written consultations greatly broadened and deepened the content of the reports with recommendations to improve productivity.  Productivity and innovation are areas in which chemical engineers bring valuable expertise, working alongside other professionals.

We need longer-term thinking. For long-term investments, we need to break clear of the short-term policy cycles that lead to “boom and bust” changes in funding and support for programmes and projects in critical areas such as education, energy, research, innovation and infrastructure.

The situation is moving quickly since the election

In his first month in office, Prime Minister Anthony Albanese and the Minister for Climate Change and Energy, Chris Bowen conveyed Australia’s updated Nationally Determined Contribution (NDC) under the Paris Agreement to the Executive Secretary of the United Nations Framework Convention on Climate Change (UNFCCC). This formalises Australia’s pledge to reduce greenhouse gas emissions by 43% below 2005 levels by 2030.

The pledge is for stronger climate ambition, as it has increased Australia’s 2030 emissions reduction target from 28% to 43%.

Peak bodies called on the 8 June 2022 Energy Ministers' meeting to work together to calm the volatility and introduce longer-term measures to moderate energy prices and cut emissions by improving supply and lifting demand-side efficiency, energy management and fuel switching.

The new minister for Climate Change and Energy, Chris Bowen, called a meeting of the federal and state energy ministers that agreed with an integrated national plan, to manage the energy transition.

A new Department of Climate Change, Energy, the Environment and Water is being established to advise the Government on implementing its suite of climate policy measures, including the new 2030 emissions target and changes to the energy safeguard mechanism, and a reboot of the national environmental agenda.

But the environment is dynamic and the immediate challenges are significant

The market operator AEMO has intervened in the national energy market, to ensure supply. The Reserve Bank of Australia has stepped in to withdraw the extraordinary support to the economy during the pandemic and announced the largest increase in the official cash rate in 22 years.

I think one of the biggest questions about how it all plays out is the tension between contradictory policy objectives of the expansionary fiscal policy (with even more fuel added during the election campaign promises) and contractionary monetary policy required to tame inflation. Furthermore, some election promises such as increasing construction and infrastructure don’t seem to take account of the supply chain constraints and workforce shortages. Infrastructure Australia has indicated that many of the promised projects should not be built.

Chemical engineering expertise is especially valuable

Chemical engineers – with our training in energy and systems thinking, and industry experience – bring specific expertise and insights of value to these national debates, planning, projects, and delivery of change, in these areas of priority. 

There is much initial activity of establishing a new government. It will be interesting to watch how the announced plans develop. It’s important to all of us. 

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Alexandra Meldrum is Vice President Learned Society and member of the Board of Trustees at IChemE. She is a chemical engineer and economist, who has worked in Australia in leadership roles in government in the NSW Department of Industry and the Office of the Productivity Commissioner in Treasury.