At the Glasgow Climate Change Conference last year, the UK Government declared that the “end
of coal is in sight”. Like most climate change predictions this has proven to be way off the mark.
Over the last month coal has overtaken iron ore to be Australia’s largest export once again. Over the past 12 months Australia has exported $130 billion of coal and $120 billion of iron ore. Coal now accounts for almost a quarter of Australia’s total exports.
Long live King Coal. When you add on oil and gas, 40 per cent of Australia’s exports now come from fossil fuels. This wealth supports all Australians because it is generating record tax revenues for both state and federal governments. Our high value of exports also support the value of the Australian dollar, making everything from Amazon purchases to overseas holidays more affordable
for all Australians.
The record surge in fossil fuels exports is the result of record investments in Australian mining and gas a decade ago. Back then governments, including Labor governments, supported the expansion of coal and gas. The Beattie Government established a requirement for gas use for electricity helping to kick off coal seam gas in Queensland. The Rudd Government invested in Hunter rail lines to expand coal exports from Newcastle.
But that support has evaporated and now Labor Governments plan for the unncessary clousre of coal mines and gas fields at a time of record demand for our commodities.
As a result, while coal and gas exports are at record highs the decline in investment in coal and
gas is at record lows. The International Energy Agency has shown that there is a correlation between higher coal prices and higher investment in Australian coal mines.
With prices as high as they are now you would expect investment of more than $13 billion in Australian coal mining. Yet, investment is only at $7 billion. This $6 billion annual deficit is the cost of Labor’s lack of support for a future for coal mining.
Just 4 years ago Labor’s Environment spokesperson, Mark Butler, said that the Adani mine was “not financially viable” and that the coal price would be “in the doldrums for years”.
Now Labor is considering a new tax on coal and gas. Labor has gone from warning that coal will never make money again to now wanting to tax coal’s super profits in just a few years.
Notionally Labor is planning to use the tax it takes from Central Queensland to pay for people’s power bills all over the country. But taxes do not make things more affordable, they make things dearer.
In this case, taxing the coal industry because things have gone better than expected for it, will discourage anyone in the future from investing in Australian mining. When coal hit rock bottom in 2015, the Government was not there to help bail investors out.
Unfortunately, Australia is becoming like a South American country when it comes to mining policies. We change our position daily, there is no support for what the industry provides and
taxes are made up from nowhere to pay for the present priorities no matter what they mean for the future.
It is hard to explain why Labor would throw away decades of bipartisan and successful policies to help grow mining jobs in Australia. With the Soccer World Cup starting this month maybe they reckon if they adopt South American mining policies, the Socceroos will play like South Americans.
That makes about as much as sense anything else when it comes to how our government’s treat mining communities today.
