Our politicians are repeating mistakes they made with the car industry and GMH

When the former prime minister Malcolm Turnbull announced the project in March 2017, he said it would cost $2bn and be commissioned by 2021. This was revised upwards several times and, in April last year, a $5.1bn contract for partial construction was awarded. (This excludes the costs of transmission and other considerable expenses.) The main contractor recently claimed the project will take eight years to build, bringing us to 2027 before the full scheme is completed. Further delays and cost increases are anticipated.

Snowy Hydro 2.0 will be an expensive white elephant (says energy expert Bruce Mountain). He says the project will end up costing five times what it was supposed to, and take twice as long to build. It is commonly believed that the scheme was promoted only for reasons of political opportunism. Given disunity within the federal Coalition over energy policy, Snowy Hydro 2.0 seemed politically expedient because it involves neither coal, nuclear power, or further wind or solar capacity.

According to the Productivity Commission, government investment in electricity market assets raises several concerns: reduced pressure to resolve problems in market rules; possible pressure to keep prices down by reducing the return on the publicly-owned assets; and the potential for 'special deals' to be offered to some customers (e.g. Alcoa), which can lead to a cycle of on-going assistance. The fundamental problem is said to be that investors do not have sufficient confidence in the market rules to make long-term energy investments.

The latest idea for future industry involves the space industry.

The Australian Government is looking to grow Australia's space industry by 20,000 jobs into a $12 billion sector by 2030 (three times its current size according to the Government), starting with its new national space headquarters in (guess where?) Adelaide. PM Morrison announced the $41 million Adelaide space facility in 2018, and the Coalition is investing a total of $700 million into the sector, including $150 million into Australian businesses so they can pick up more work by partnering with NASA's Moon to Mars initiative.

The estimated US$400 billion space economy worldwide is still largely dominated by large aerospace and defence companies. Wall Street's consensus is that it will grow into a multi-trillion-dollar economy in the next 10 to 20 years.

The question for Australia is what elements of this can reasonably be expected to be served by Australian companies. Historically, our involvement has been mainly limited to satellite communications and support to NASA from our southern hemisphere location. It is also now 56 years since a rocket launch took place from Woomera SA, the start of Europe's ill-fated cooperative venture [European Launcher Development Organisation (ELDO)].

Two conclusions seem obvious. Firstly, the government seems to be in conflict with own advice not to engage in subsidising industries. Secondly it may be optimistic to assume that Australia will be able to attract a more substantial share of the world space industry, which is now a more mature industry in many northern hemisphere countries.

A further issue in industry assistance relates to our steel industry.

On the one hand our biggest steel producer, BlueScope Steel, has continually flagged concerns about high electricity prices in Australia and the reduced reliability of power supplies. Its CEO confirmed that, owing to high electricity and gas prices in Australia, BlueScope is spending US$700m (AU$1b) to expand its North Star steel mill in Ohio, USA.

At the same time the new owner of Arrium steelworks in Whyalla, SA (UK billionaire industrialist Sanjeev Gupta) launched a $1 billion, one-gigawatt renewable energy plan based in South Australia's mid-north, that he says will lead Australian industry's transition to more competitive power. The project will produce 280 megawatts of power and feature 780,000 solar panels, generating enough electricity for 96,000 homes. Mr Gupta has said that renewables offered the best future for energy-intensive industries, though the world has yet to see solar provide the capacity necessary to run arc furnaces 24/7.

Mr Gupta has a record of requiring public subsidies for his business ventures.