Mining billionaire Andrew Forrest has urged the federal government to stop “micromanaging” Australia’s energy transition and use the upheaval caused by conflict in the Middle East and its political capital to accelerate the electrification of the economy.
The Fortescue executive chairman said the war in Iran had laid bare the fragility of fossil fuel markets and hardened a long-term “megatrend” away from oil, diesel and gas, arguing key supply routes such as the Strait of Hormuz would not return to their previous stability.
The world’s fourth-largest iron ore miner said the disruption should be treated as a strategic opening rather than merely another geopolitical crisis, warning Australia was at risk of squandering an economic advantage if it remained tied to imported fuels.
“It doesn’t matter if you’re Hanson, if you’re Liberal, you’re Labor. I couldn’t care less: to every politician, you are in a long-term megatrend. This is your opportunity to lead,” Forrest, who will open the Smart Energy Conference in Sydney on Wednesday, said.
“Use the fact that the Strait of Hormuz isn’t coming back… Things aren’t going to return to the way they once were.”
The intervention amounts to a pointed challenge to the Albanese government’s policy settings after Labor’s expanded parliamentary majority a year ago. Forrest argued the government now had the political capital to pursue deeper structural reform instead of incremental change.
“I believe that with a 94-seat majority, now is the time for bold moves, where we lead, not micromanage,” he said.
Drawing a historical parallel with the Coalition government of former prime minister Malcolm Fraser in December 1975, Forrest suggested governments that fail to use large mandates are eventually punished by voters.
“You look at the Fraser government decades ago, who won a landslide majority and then didn’t use it … they weren’t rewarded,” he said.
Forrest is pushing for that to begin by the government capping the fuel tax credit at $50 million a year per beneficiary, which he says would not only deliver estimated savings of $2.46 billion – to reallocate for cost-of-living relief – but remove a major disincentive for major companies to electrify.
He said capping the rebate for the biggest mining users rather than abolishing it outright, would keep in place support for farmers, fishers and smaller businesses while redirecting pressure onto the largest industrial claimants.
“Subsidising diesel, which is 100 per cent made outside of Australia, 100 per cent exposed to oligarchs, to dictatorships, to war … is a continuing error which we, which Australia, does not need,” he said.
“If you keep it in place, then you distort the innovation, which is what Australia is best at… innovating, finding a way through, making good on the journey, no matter how tough.”
Wary of his critics within Australia’s powerful mining lobby, Forrest pointed to Fortescue’s development of 200 megawatts of renewable energy in the Pilbara, to be in place by 2028, including solar and wind power backed up by a series of industrial-sized batteries.
Squadron Energy, the renewables outfit owned by Forrest, is also overseeing the only wind project currently under construction in NSW, 14km east of Wellington in the state’s central west.
He pushed back on claims his own advocacy was driven by vested interests, pointing to Fortescue’s own transition away from fossil fuels.
“Now, people who say ‘Twiggy’s just going for vested interest’, I’d say, ‘what are you doing to prove your words?’” he said.
“I know what I’m doing to prove my words, my entire company is committed now to eliminating diesel from our supply chains, and we’re transforming our entire company to a much kinder, much more advanced, much more interesting place to work. What are you doing?”
But he also warned that governments and renewable projects needed to work harder to mitigate backlash in regional communities, urging a rethink of the design of the electricity and transmission system, arguing infrastructure had too often been built around legacy constraints.
“Australia doesn’t need to be putting energy wherever the grid is. We should be putting the grid wherever the energy is,” he said.
“I am a farmer. I’ve got other people’s infrastructure going all over my own family property. The argument has always been ‘well, it’s in the national interest’, so therefore we just do it. But actually … it’s also in a particular company’s interest, so they’re not bearing the cost, whereas I am as a farmer. And so I actually see that argument.”
Forrest said without strong leadership Australia also risked drifting towards a more divisive, US-style political climate, arguing fear-based campaigning and social fragmentation could derail long-term reform.
He said importing elements of the American political system — particularly its polarisation and short-termism — would come at a cost to living standards and social cohesion, undermining the kind of consensus needed to drive large-scale economic change.
“If your only argument is to cause distrust, is to cause fragmentation of Australians to fear each other, then you’re taking us back,” he said. “Look at America … you can see by the disaster of higher living prices, lower standards of living as a result, just isn’t where we want to be,” he said.
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Rob Harris is the national correspondent for The Sydney Morning Herald and The Age based in Canberra. He is a former Europe correspondent.Connect via email.