David Faber
Australia, and with it South Australia, stands at an historical crossroads of socioeconomic development. With climate change a pressing peril, the need to rely on emerging renewable energy technologies, whose costs are dropping relative to fossil fuels, to promote employment in sunrise industries, is imperative.
Only innovative thinking superseding outdated dogma and vested interests will suffice. When all is said and done, the weakness of the defunct National Energy Guarantee was the unnecessary reliance it placed on vested interests seeking to perpetuate investment in old coal technology which fuels global warming. Fortunately, a tendency to innovative thinking, while not unalloyed, has been one of the strengths of South Australian society since colonisation by imperial utopians in 1836.
Progressive people on this question are above partisan considerations. They don't care who does the right thing by the public interest so long as it is done and done pronto. It is possible that South Australia's Liberal Environment Minister, Dan van Holst Pellekaan, being a conservative conviction politician with a scientific, engineering background, understands all this.
The first party to implement an energy policy which is not in denial about global warming will lay the foundation for an electoral ascendancy for a couple of terms at least. So long, of course, as retail electricity prices can be brought down from the obscene levels that neo-liberal privatisation, pursued over recent generations by both major parties, has occasioned.
Certainly, the SA Environment Minister has indicated recently, in response to the parliamentary implosion of Liberal-conservatism at the Federal level over just this question, that a national energy policy may have to be cobbled together by the states if the state Coalition parties are to save Liberal-conservatism's scorched bacon. The hot breath of the ALP will be upon conservatives in this policy arena. The ALP vaunts clued-up exponents like South Australian Mark Butler as an articulate spokesperson regarding energy and climate change, so temporising is not an option for Liberal conservatives.
Sir Thomas Playford
Where energy questions are concerned, the figure of Sir Thomas Playford (1896‒1981) is inspirational. As longstanding SA Premier from 1938-65 [!] he broke the mould of centuries-long Liberal small-state ideology to intervene in the energy sector immediately after the Second World War.
He was able to do so in part because of the bi-partisan progressive Liberal consensus which was a feature of the responses of Liberals and Social Democrats to the Depressions of the 1890s and 1930s. He thus set a peripheral economy on a balanced course of state-fostered industrialisation and diversification.
The legend that Playford single-handedly diversified the state economy and guaranteed generations of prosperity independently of international and national conditions is exaggerated. But he achieved a great deal through state economic leadership and nationalisation of the conservative and unenterprising Board of the Adelaide Electricity Supply Co. (AESC). This was done in the teeth of resistance from his party and its old money, patrician constituents, but with the support of the Labor Opposition.
The tale of how he accomplished this in the public interest is instructive. It identifies factors to which recourse must likewise be had in the future. It is a story of more than regional significance at the current juncture, given that South Australia will in time benefit from playing a leading national role in promoting the transformation of energy infrastructure on a low-cost renewable basis.
The crisis which faced Playford came when the AESC refused point blank to replace imported NSW coking coal. The supply of this had been interrupted during the War in part due to industrial strife. Playford was sufficiently conservative, prejudiced and unfamiliar with the labour movement that he thought the strife, which did threaten South Australia's interests however it was caused, was due to Communist union officials duping the miners. Indeed, his biographer, Stewart Cockburn, commits the historical howler of supposing that the Communist Party fomented unrest to sabotage the war effort in the name of the Nazi-Soviet Pact!
Labour historian Tom Sheridan, in analysing later Cold War industrial relations, has found that such myths had long flown in the face of the fact that, if anything, the men 'exploited' Communists by voting to back them in to union office because of their superior work ethic as proletarian representatives. This was acknowledged at the time by Anti-communists like Santamaria and senior ALP exponents.
Such observations need to be backdated, given that Cold War prejudice grew out of interwar Anti-socialism. At any rate, Playford appears to have misattributed to politics industrial strife which was in fact structurally incident on appalling working conditions in the NSW coalfields. Cockburn's error is important because it detracts from emphasis on the structural issue of the importance of energy autonomy for SA if it were to develop, provide employment and attract socioeconomic consensus. Nevertheless, Playford was not so blinkered as to substantially overlook the realities involved.
Be that as it may, Playford's response did harness Anti-communism to practice class collaboration with South Australia's constitutionally more moderate labour movement to mollify it, contributing to ongoing reduced wages and wage costs compared with interstate. These were made palatable to labour given a lower cost of living and higher employment.
Playford wanted a de-radicalised labour movement with which he could negotiate reliance on South Australia's competitive advantages of lower wages and reduced industrial disputation. This was the basis of a reasonably beautiful understanding which long endured between a labourist labour movement and a progressive conservative benevolent despot, as his biographer has hailed him. Of course, as MHA Frances Bedford has commented, he benefitted in this from the Playmander, South Australia's rurally-weighted gerrymander, which secured his rear politically. As an agrarian conservative he inherited the necessary mechanisms and sense of entitlement from the colonial era.
Playford recognised that natural monopolies, of which energy inputs were production costs, were best organised as public utilities. Needing to prime recovery from the Great Depression if he was to relieve unemployment and stay in office, he was persuaded by the economic analysis of his Auditor General, John William 'Bill' Wainwright. Wainwright argued for economic diversification through state fostered and led industrialisation to alleviate South Australia's excessive reliance on agrarian exports.
Wainwright argued that the industrialised eastern states benefitted from national protectionism at the expense of South Australia, which paid for the associated costs in terms of the higher prices of consumer products and manufacturing items and inputs. He had an arguable point. With his political future on the line, the practical and pragmatic Playford fully endorsed the reasoning of this fearless Keynesian public service advice, backing Wainwright to the hilt.
This was in part because Playford understood the social and political importance of promoting the public interest. Wainwright, who had a moderately unconventional economic education, was the theoretical father of postwar prosperity in South Australia, with Playford the entrepreneurial leader who signed off on and implemented his vision.
Vision thing
What is needed now in South Australia is more of the same leadership, animated by what conservative United States President George Bush senior called 'that vision thing.'
Playford wished to fuel his policies by exploiting the undeveloped resource of Leigh Creek reserves of low grade hard brown coal with little bitumen in its ore. The softer black coking coal imported from NSW burned at a higher temperature. The AESC had long declined to take an interest in developing a commodity which did not suit its antiquated boilers, which developed steam to turn turbines. They refused to reinvest in specialised, new-fangled boilers capable of exploiting Leigh Creek coal, frustrating Playford.
Then the AESC thumbed its nose at his interventionism, buying new old-fashioned boilers to replace those which were incapable of further operation. At this offense against the public interest, Playford pounced, carrying enough of his own party's Members with him to drive nationalisation legislation through both Houses of the South Australian Parliament with delighted ALP support. The game was up for conservative resistance to the Playford and Wainwright dispensation.
One test of historical significance of past experience is its contemporary legacy. Both major political parties can lay some claim to different aspects of the Playford legacy of state intervention in the name of progressive conservative development. Playford was a ruthless operator when necessary. In the good sense of the term he was a principled Machiavellian, a Liberal Premier capable of enforcing what were effectively Social Democratic socioeconomic policies in the public interest with Labor parliamentary votes, over the opposition of the majority of his conservative colleagues.
The modern lesson to be learned, in South Australia and elsewhere in the Commonwealth, is the political potential, available to all who have the vision and courage to seize it, of entrepreneurial, progressive energy policy, developing new energy sources for pioneering development on an ecologically safer and socioeconomically more savvy and less costly basis. Even if government were not to renationalise the utility companies, much could be accomplished by political and cultural leadership. Healthy political competition to win just climate laurels is wide open.
Published in Chain Reaction #134, December 2018. National magazine of Friends of the Earth Australia. www.foe.org.au/chain_reaction