South Australians playing with nuclear waste

If you missed it just ponder this for a moment. In South Australia the Labor Party is sticking by its leader's commitment to press on with investigating the viability of hosting the world's used nuclear fuels and associated waste. While the Liberal opposition is happy to employ rhetoric usually only uttered by the local Greens and anti-nuclear activists in opposing Premier Jay Weatherill's vision.

Where this will end is anyone's informed guess but it speaks to a larger issue in contemporary politics, namely the contest between rising populism and the hope of genuine political leadership capable of evoking a narrative associated with a vision.

Deciding to fight the opportunism of Opposition leader, Mr Steven Marshall, when he broke with bipartisanship on the 'nuclear dump' question, Mr Weatherill is gambling that in coming months he will find evidence to support the Nuclear Fuel Cycle Royal Commission finding that significant economic benefits were in the offing. With the Liberals and the Greens opposed, and many of his colleagues decidedly uncertain, he may be gambling his leadership ahead of the March 2018 State election.

Labor seeks an almost impossible fifth term against the background of relatively high unemployment and depressed sentiment due to the closure of automotive manufacturing and the announcement two years ago that BHP Billiton was mothballing plans to dig the largest open-cut mine in the world, the Olympic Dam project.

Royal Commisioner and former SA Governor, Kevin Scarce, handed his report to the South Australian Government in May this year and, as noted above, it pointed to a potential economic bonanza should the State entertain hosting other countries used nuclear fuel. Any prospect of progressing this debate rested squarely on two key factors, bipartisanship and a reasonable degree of public consent.

The Premier now finds himself engaged in a game of brinksmanship with Opposition Leader Steven Marshall, who, until last week, took a bipartisan position on the question of whether or not the state should entertain hosting a repository for used nuclear fuel. Certainly, Premier Weatherill surprised many commentators, and shocked the Opposition and the anti-nuclear lobby, with his decision to keep the issue alive. Aware that there have been no protests of thousands, and that the Citizens' Jury process was flawed, he sees strategic advantage in exposing Mr Marshall as opportunistic and out of step with the Liberal Party's business constituency. Mr Weatherill's aim is to encourage the Liberals back to bipartisanship, and this is the necessary prerequisite for any future referendum.

Both in Parliament and in a recent opinion article, Mr Weatherillstressed the dimensions of the opportunity identified by the Royal Commission when he observed:

…our State could benefit from projected revenue of $257 billion. If we were to invest this into a State Wealth Fund, this could accumulate to $445 billion for South Australia. This is the equivalent of $260,000 for every single person in our State. As Premier, it is my duty to explore such an opportunity.

It is the prospect of an economic bonanza that keeps this issue alive. The new challenge for Mr Weatherill is to find proof that the Royal Commission's financial modeling is not fundamentally in error as some economists argue.

This will not be easy, as I explain below, now that bipartisanship is broken. However, Mr Weatherill knows that if he can demonstrate the robustness of the modeling that social consent, including the consent of Aboriginal South Australians, will more than likely follow. The reason is simple: South Australians know their economy is in deep trouble and are looking for viable means to arrest its de-industrialisation.

In Parliament, Mr Weatherill said, 'There will be no referendum until bipartisanship is restored. At the heart of bipartisanship will be the policy processes that occur inside the Liberal Party.' [Hansard Tuesday 15 November 2016 p.7758]. The Premier aims to foster division among Liberal MPs and Party supporters and expose Mr Marshall as shallow and opportunistic. No doubt these machinations befuddle many on-lookers as prominent local radio host and columnist David Penberthypointed to a recent column:

When it comes to the question of nuclear waste storage, this is how the politics currently shapes up in this confusing little state of ours.

The one political leader who believes there may yet be merit in the proposal is a lifelong member of Labor's Left Faction, the same grouping which brought us the half-pregnant "three mines" policy on uranium mining, and which has historically opposed any further expansion of the nuclear fuel cycle.

Sensing that many Liberal MPs, Party members, and the business community were shocked by Mr Marshall's sudden decision to break with bipartisanship, Mr Weatherill lampooned the Opposition in Parliament. He painted the picture of Mr Marshall as now keen to ally with the protesters 'painted out, in their gas masks … with the nuclear waste barrels [and] bongo drums' [Hansard 15 November 2016, p.7759]. The question is, why does a Left-aligned Labor Premier so doggedly defend an issue that has lost bipartisan support, that was rejected by two thirds of the citizen jurors, and that, according to Unions SA leader, Joe Szakacs,represents a "crazy or brave" move from a "tone deaf" leader?

Three factors need to be considered, with the first being the easy, opportunistic politics that Mr Marshall has played. He judged that the Citizens' Jury's two-thirds vote against further investigation had deeply embarrassed the Premier and that it signaled the 'death knell' for the proposal. However, Mr Weatherill was aware that serious questions had been raised about the Jury, including that the independent organising body had conceded there were problems.

The second lies with the Liberals' fears of Xenophon Team candidates campaigning, alongside the Greens, on a 'no dump' platform at the next state election. The Xenophon factor is huge in South Australian politics, but it is difficult to discern at this time how potent that might be on this issue. The third factor concerns Mr Marshall's assessment of the Royal Commission's financial modeling as being fundamentally unsound, which he has stressed publicly to justify breaking with bipartisanship.

The economic debate over the merits or otherwise of the nuclear waste proposal simply cannot be resolved one way or the other without amending section 13 of theNuclear Waste Storage Facility [Prohibition] Act 2000. The Royal Commission concluded that, as the Act currently stands, further public money cannot be spent investigating nuclear waste issues outside of community consultation. This is significant, for it relates to barriers to government being able to engage with potential customer countries, such as Japan, Taiwan and South Korea, on questions concerning what price per tonne, what quantity, and crucially, the preparedness to 'pre-commit' capital to build a repository so that South Australians don't have to foot the bill. This is the big 'known unknown' in this political and economic equation.

At this juncture, Mr Weatherill must be gambling that he can find an answer the hard way, through 'back-channels'-perhaps organised by private industry and organic community activities-so as to present a tangible economic bonanza.

Aware that the Citizens' Jury process was flawed, Mr Weatherill refers to the 50,000 South Australians engaged during the community consultation process, and touts a survey of 4,000 South Australians that 'found a plurality of South Australians supported pursing the idea – 43 per cent in favour and 37 per cent opposed, with the rest undecided.' It is important to note that this was a scientifically conducted random sample survey similar to another survey that reports on recent opinion polling showing a majority of South Australians in favour of the state exploring 'nuclear industry' options.

Also supporting the Premier's case is a recent review of the Royal Commission's financial modeling commissioned by the Joint Committee on Findings of the Nuclear Fuel Cycle Royal Commissionand undertaken by independent, expert economists with deep knowledge of the nuclear fuel cycle, as distinct from certain general economists,who have cast aspersions on the findings of the Royal Commission in what can only be described as stemming from an ideological opposition to the nuclear industry. The Nuclear Economics Consulting Group [NECG] reviewed work by consultants to the Royal Commission, Jacobs and MCM, observing:

Due to the preliminary nature of the Jacobs MCM Report, a critical review at this stage will naturally identify a multitude of detailed assumptions that can be questioned in different ways or even suggest different assumptions. This does not mean that the Jacobs MCM Report is not useful or relevant or that the Project is not a potentially attractive opportunity.

The NECG economists identified problems and issues, as any thorough peer review process would. Mr Marshall honed in on these problems, arguing the 'economics don't stack up' as his primary justification for breaking bipartisanship. Within days, however, he came under fire from his own side when former South Australian Liberal Senator and Party President, Sean Edwards, argued that "Nobody has tested the veracity of the people who claim it's not economical."

This, for mine, is a telling point: the economists opposed are generalists with various ideological dispositions. What is clearly required is genuine, dispassionate investigation.

In conclusion, Mr Weatherill's strategy appears to involve three stages.

The first is a return to bipartisanship, concomitant to amending of the Nuclear Waste Prohibition Act. The second involves a thorough investigation of the likely customers, what they would pay per tonne of used fuel, and how prepared they might be to pre-commit funds towards the development of facilities and infrastructure. On that basis, and if financially attractive, a renewed conversation with South Australians would follow. Aboriginal consent is the third factor and, here, the Premier believes there ought to be an ultimate veto for an Aboriginal community that has interests in the land that would host a facility. The Premier noted during a radio interview last week that both he and the former Royal Commissioner heard from some Aboriginal leaders that they want more time to understand the issue and that they were keen to see what benefits may be on offer should the economic case be validated.

What is clearly required is genuine, dispassionate investigation, and that remains Mr Weatherill's intent, though he may find few of his Ministers now having much heart for the cause. Should Mr Weatherill fail to produce evidence in coming months that supports the Royal Commission's findings his position may become untenable ahead of the March 2018 State election. Success on the other hand would sharply expose the opportunism of Mr Marshall in an age when voters are casting for a whiff of strong leadership.