Leith Van Onselen said that Labor's proposed emissions policy could deliver a major blow to Australian industry and drive manufacturing offshore [1].
The warning comes as the Australian industrial sector faces mounting pressure from rising operational costs. If the proposed policies are implemented, critics argue that the added financial burden could make domestic production unsustainable compared to international competitors.
Van Onselen, the chief economist at Macrobusiness, said during an interview with News24 host Peta Credlin [1]. He described the potential impact of the climate push as "absolutely disastrous were it to come to pass" [1].
The economist highlighted that the industrial sector is already in a precarious position. He said the policy would deal another hammer blow to Australian industry which, let’s face it, is already reeling from high energy costs [1].
According to Van Onselen, the primary risk is the cumulative effect of these costs [1]. While the government seeks to meet climate targets, the economic friction created by new emissions mandates may accelerate the trend of offshoring manufacturing to countries with lower regulatory costs [1].
This tension reflects a broader debate within Australia regarding the balance between environmental goals and economic sovereignty. The potential for industrial decline remains a central point of contention for economists monitoring the energy market [1].
“This would be absolutely disastrous were it to come to pass.”
The warning from Macrobusiness underscores a critical tension in Australia's transition to a low-carbon economy. If emissions policies increase the cost of doing business while energy prices remain high, the country risks 'carbon leakage,' where industries move to jurisdictions with laxer rules. This would result in the same global emissions but a loss of domestic jobs and industrial capacity.
