Announcement date
27 March 2024
Link to announcement
Net Zero Economy Authority Bill introduced | PM&C (pmc.gov.au)
Problem being addressed
The upcoming announced closure of coal-fired and gas-fired power stations and dependent supplier businesses is likely to have significant negative employment and other social impacts on workers and regional communities, as evidenced by literature from past closure events and feedback received from stakeholders. Job losses will likely arise as stations close, both at the facilities themselves and in companies providing supplies and services to them. Communities are concerned there will be insufficient job opportunities available for retrenched workers based on previous closure events. Careful consideration is required to mitigate the risks of poor social and economic outcomes associated with long-term unemployment in regional communities that may result from facility closures.
Proposal
The Impact Analysis focusses on power stations with sizeable workforces and announced closure dates, which are predominantly coal-fired power stations. The analysis considers the potential impact of three different policy options on employers, workers, governments and communities. The net benefits of two policy options through to 2035 have been estimated using an abridged cost benefit analysis (CBA) framework and a combination of quantitative and qualitative analysis. The three policy options are:
- Option 1: a ‘status quo’ option, in which existing supports for workers are relied on, with no further intervention from the Australian Government
- Option 2: implementing a pooled redeployment policy for workers at closing coal-fired power stations, some gas-fired power stations and dependent suppliers, with all parties participating voluntarily
- Option 3: implementing a pooled redeployment policy for workers at closing coal-fired power stations, some gas-fired power stations and dependent suppliers, underpinned by a legislative framework that:
- includes the ability to require closing power station operators and their dependent suppliers to participate in pooled redeployment arrangements; and
- requires participating closing employers and dependent suppliers to take actions to support employees to achieve employment outcomes including participation in the redeployment pool, subject to their operational requirements.
Assessed Impact Analysis outcome
Good practice
Assessment comments
The analysis in the IA is good quality overall. The IA addresses the seven IA questions and follows an appropriate policy development process commensurate with the significance of the problem and magnitude of the proposed intervention. To have been assessed as ‘exemplary’ under the Guide, the IA would have benefited from a further detailed evaluation plan that included detailed measurement against the policy objectives and consideration of the qualitative impacts of the preferred option.
Regulatory Burden
The Net Zero Economy Agency estimates the preferred option (Option 3) will result in an increase in regulatory costs of $1.5 million per year, averaged over eleven years.