‘Life must be quiet in DFAT when foreign policy has all the impact of a paper umbrella in a hurricane’

Australia has joined some of the major European economies – Britain, France, Germany – in what can only be described as a doom loop. The government spends recklessly on windmills and welfare, unconcerned about ballooning national debt and the mounting burden of interest payments. At the same time, it is consumed by a fixation on net zero by 2050, pushing up energy prices, hollowing out our industrial base and driving private sector investment offshore. Yet to afford windmills and welfare we need the economy to grow and growth comes from profitable private sector investment.

The state is growing larger while private enterprise is shrinking as a proportion of the economy. Foreign investment flows elsewhere – chiefly to the United States and emerging economies. Even our foreign policy is performative, not purposeful. The malaise is palpable. Australia, once dynamic and exciting has lost its mojo. We’ve embraced the European model and with the same results.

This is very noticeable when travelling overseas. Once people would ask me about Australia’s economy. How did we achieve high rates of economic growth, low unemployment, a budget surplus, and pay off all our government debt? I got a standing ovation in New York making a speech about it once. It wasn’t the quality of the speech that generated the ovation, it was the facts.

And we used to be so active on the international stage helping to establish the Chemical Weapons Convention, bringing the Comprehensive Nuclear Test Ban Treaty into life, helping to draft the International Criminal Court Statute (maybe we shouldn’t have done that). We helped build new countries like East Timor, saved older ones like Solomon Islands, and contributed quite aggressively and meaningfully to the war against Islamic terrorism.

But now, where is Australia? Life must be quiet in the Department of Foreign Affairs and Trade, and not just because many of them are working from home! Our foreign policy has all the impact of a paper umbrella in a hurricane. It’s driven by domestic politics. We take positions such as recognising a non-existent state of Palestine not because it’s going to make any difference other than giving encouragement to the world’s most egregious terrorist organisation, but because it plays well in certain far-left constituencies in Australia.

The question is: Can we recapture our ambition as a country? Well, we won’t if we maintain the same incoherent approach to public policy. Climate policy is the best example of this incoherence. We barely debate whether to commit to net zero by 2050. Yet to even question the policy is seen as heresy. There’s so little debate about it that most Australians misunderstand what “net zero” even means. It is not gross zero. Presumably, it still allows for emissions, provided they are offset through technologies such as carbon capture and storage and tree planting.

But how much do the net zero policies cost? The government never says and no one seems to mind. It is the height of policy irresponsibility to pursue a policy so consequential without assessing the costs.

Even so, the path to net zero must not come at the expense of two absolute imperatives: affordable electricity and reliable electricity. No economy can grow without both. Yet in pursuit of net zero, governments are implementing policies that push up costs and undermine grid reliability.

Yes, battery technology may improve. Perhaps costs will fall. But we cannot simply assume breakthroughs. Governments are mandating ever greater reliance on wind and solar, both intermittent sources, which require massive investment in transmission lines and backup generation.

This is expensive and disruptive. For all the rhetoric about the energy transition, consider this: fossil fuels still account for 91 per cent of Australia’s total energy consumption. Twenty years ago, it was 94 per cent. After hundreds of billions of dollars invested in renewables, that is the result. A three-percentage-point change.

Meanwhile, energy costs rise in one of the most energy rich countries in the world. Companies close. Some relocate offshore, others survive only through government subsidies. The Whyalla Steelworks and Port Pirie smelter both rely on coal. Without subsidies, they would collapse. So the government undermines cheap energy on the one hand, and subsidises businesses damaged by that policy on the other. It’s nuts.

Then there is gas. Australia has vast reserves and was once the world’s largest LNG exporter. Yet Victoria, perversely, bans its extraction – forcing the state to spend around a billion dollars on an LNG terminal. That too is nuts.

The same confusion extends to electric vehicles. Governments subsidise their purchase, then turn around and discuss taxing them. Subsidise with one hand, tax with the other. This is not policy; it is muddle. Yes, it’s nuts.

Without rapid and extraordinary technological change, Australia will not achieve net zero by 2050. That does not mean the aspiration is worthless. Aspirations matter. We aspire to eliminate road deaths. We aspire to end landfill. Yet we compromise, because absolutism would be catastrophic.

The same principle applies to net zero. It is a noble aspiration, but the costs of absolutism will destroy the economy. Leaders must be honest about that. They must explain that while Australians support emissions reduction, they do not support endless increases in electricity bills or the deindustrialisation of the nation. You cannot have one without the other.

Nor should Australians be misled into believing that if Australia achieves net zero that will stop bushfires or floods. The science does not say that. But activists and politicians alike encourage this false impression, because it is politically “clever”.

Climate change is a global phenomenon. Australia’s contribution, whatever we do, will make no measurable difference to the global climate. That is not an argument for doing nothing. We should contribute proportionately, as a responsible international citizen. But we should not tank our economy in the process.

The first duty of leadership is to tell the truth, however unpalatable. That means acknowledging the limits of what Australia can achieve and the costs of chasing what in many cases are illusions. If we are serious about escaping the doom loop, we must rediscover ambition, embrace coherence in policy, and above all, stop misleading ourselves.