Craig Kelly (Hughes, Liberal Party) Share this | Hansard source

I do partly concur with members of the opposition on this motion—it is a sad day when any company closes down, especially a company with such a long and proud history like General Motors Holden in Adelaide. But the reality is that businesses have to be competitive. No business can continue to be subsidised by other businesses indefinitely, because ultimately someone has to pay for that subsidy. If one business wants to be subsidised, you have to put a higher tax on another business, which makes that business less efficient, deters them from expanding and deters them from employing people. The sad reality at the end of the day was that Holden in South Australia was no longer competitive, and that is why the decision to close down was made.

Holden is not the only company we have recently seen close down in South Australia. Only last week we saw that Coca-Cola were closing their operations in South Australia. They had a glass bottle manufacturing plant, a plant that obviously requires tremendous amounts of energy. It was very understandable that, with South Australia's high energy costs, Coca-Cola pulled out. They joined Pfizer, who pulled out of South Australia the week before. And, only a couple of days ago, we had the decision of Caroma to pull out of South Australia. All of us in this parliament should be very concerned about the exodus of manufacturing from South Australia.

One of the clear reasons for that exodus is the high cost of electricity in that state. It is not only the businesses that we see close down; it is also the unseen—the businesses that would have otherwise started up. Our economy relies on new investments and new business start-ups to keep the economy growing. But who is going to invest in a state that has such high electricity costs, such unreliable power? No business today would make that decision.

Madam Deputy Speaker, to give you some idea of the competitive disadvantage faced in South Australia: recently there was a report released by the Australian Energy Market Commission, looking at the prices in each state, and in New South Wales, for the year 2014-15, the average price of residential electricity was 22c per kilowatt hour, but in South Australia that amount was 30c per kilowatt hour. You had an almost 50 per cent higher price in South Australia than in New South Wales, so is it any wonder that we are seeing this exodus of manufacturing from South Australia?

South Australia not only has a competitive disadvantage within Australia; it also has a disadvantage compared to other countries. I recently had a look at some of the prices in Canada for electricity. In Edmonton, the average price for residential electricity is Can10.3c. The Canadian dollar and the Australian dollar are almost at parity, so you are looking at 10.3c in Edmonton but 30c in South Australia—three times the price. In Vancouver, the average price is 10.7c for electricity. In Calgary it is 10.4c. In Montreal, the average residential price for electricity is 7.23c. That is one quarter of the cost in South Australia.

We have a crisis in this country with electricity costs. We cannot ignore the problems in South Australia to double down on a renewable energy target in South Australia that has caused so much damage. I call on those members from South Australia to realise the crisis that is ahead of you and to call on your party to abandon your 50 per cent renewable energy target, because your state, most of all, cannot afford it.

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