Energy Policy Misfire: How Australia Could Self-Destruct

Leith van Onselen’s recent YouTube clip—“Australia’s energy policy will obliterate the economy and living standards”—is a no-punches-pulled warning. In an extract from his podcast with Martin North of Digital Finance Analytics, van Onselen lays out how current policy is setting Australia up for ruin.(see below)

The Cost of Failed Energy Strategy

1. Export Over Domesticate
   In the early 2010s, governments allowed East Coast gas producers to export LNG from Gladstone without reserving enough for domestic use. Fast forward, and we have skyrocketing power costs, frequent energy stress, and a dying manufacturing sector—while the nation continues to export gas to the world.(MacroBusiness)

2. Absurd Pricing Model
   Leith points to the stark contrast with the U.S., where domestic reservation policies keep retail gas prices at A$4/GJ—even while the U.S. remains the top exporter. Here in Australia? Prices range from A$12 to A$25/GJ. That gap isn’t policy-driven fairness—it’s self-inflicted financial suffering.

3. Manufacturing on Life Support
   The gas shortage has dismantled heavy industry. Leith notes that companies like Incitec Pivot and Qenos have folded under the pressure of inflated input costs. The result: jobs lost, communities weakened, and more reliance on foreign imports.

4. Renewables Aren’t the Magic Fix
   Locking in renewables like Snowy Hydro 2.0 and the Borumba Pumped Hydro means pouring billions into infrastructure that doesn’t generate power—only stores it. When combined with the need for backup systems and higher transmission costs, electricity prices are soaring—not falling.

The Real-World Impact

• Household Bills Soar: Families are paying through the nose to keep the lights on.

• Industries Flee: Australia’s energy cost disadvantage pushes business offshore.

• Stalling Prosperity: As energy becomes more expensive and unreliable, productivity drops and living standards slide.

Leith’s message? We’re sacrificing our manufacturing base, economic stability, and financial health—not for a better climate outcome, but for a misguided policy framework.

Australia's Energy Policy: Key Failures and Consequences                               

Policy / Action	Incentive / Rationale	Outcome / Consequence
Allowing LNG exports without domestic reservation	Boost export earnings, please multinational gas companies	Domestic gas shortages, soaring prices, industry collapse
Pricing linked to export parity	Align with global markets, maximize profits for gas producers	Retail gas prices 3–6× higher than U.S.; households and manufacturers suffer
Reliance on renewables (Snowy Hydro 2.0, Borumba, etc.)	Appear “green,” attract global ESG investors	Massive costs, higher electricity bills, unreliable baseload support
Neglecting manufacturing needs	Short-term political gain, focus on services economy	Closure of firms (Incitec Pivot, Qenos), loss of jobs, more imports
High transmission and backup costs	Enable wide-scale renewable rollout	Bills rise further; undermines competitiveness
Failure to protect consumers	Defer to corporate interests, avoid hard reform	Living standards fall, economic resilience weakens

Bottom Line

Australia is sitting on energy riches—but current policies have weaponised them against our economy. Instead of boosting prosperity, we’re eroding it—through exports prioritised over domestic security, and renewables built at the expense of reliability and affordability.

Leith van Onselen’s warning is clear: this isn’t just shortsighted. It's structurally harmful. And unless we course-correct, Australians will pay dearly.

The video is well worth viewing.