Australia isn’t trying to stop global warming, we’re subsidising it.
While here in the ACT we’re on track to source 100% of our electricity from renewable energy by 2020, in Queensland the state government is doubling down on the number one contributor to climate change – coal.
Despite banks, economists and the Australian people showing little interest in handing Indian coal giant Adani billions of dollars to dig up a heap of carbon, many politicians just can’t say wait to throw your money at it. The Queensland government’s enthusiasm is exceeded only by the Turnbull government, which has taken to fondling lumps of coal on the floor of Parliament.
Ten days before the last Queensland election, then Opposition leader Palaszczuk blasted the Newman government for picking winners and losers, warning:
“What we’re seeing at the moment is Campbell Newman throwing a bucket of taxpayers’ cash…at one particular company [Adani].”
Palaszczuk further promised “Queenslander taxpayers’ money is not going to be used to fund commercial operations”. She of course then went on to win the election in a one of Australia’s biggest political upsets.
Subsidies for coal are unpopular
Despite being elected on a ‘no subsidies’ platform, the Palaszczuk government has gone on to offer Adani free water (in the form of an unlimited, un-challengeable water licence), free coal (in the form of a reported $320 million ‘royalty holiday’) and a possible 39-year raincheck on the clean-up bill. It’s also on track for a one billion dollar subsidised loan for its rail line from the federal government’s Northern Australia Infrastructure Facility (NAIF).
At this rate, soon we’ll paying Adani to dig up our coal. And Australian voters don’t appear to be impressed.
The Australia Institute polled 1,400 Australians and found almost two thirds of Australians (64%) oppose the proposed billion dollar subsidised loan to Adani. It’s unpopular no matter which state you live in or which political party you vote for. When given a list of infrastructure they’d like their taxes spent on, coal consistently came in dead last.
All these subsidies represent taxpayers’ money that won’t be available for new schools, new hospitals, new aged care facilities, faster NBN or anything else we might want to invest in.
Few fans of the Adani mine
Taxpayers are right to be sceptical. Even Queensland Treasury assessed the project as ‘unbankable’ and in documents obtained under freedom of information and published in Fairfax, ‘expressed fears about Adani’s high level of debt and identify the mining giant as a “risk” because of its unclear corporate structure and use of offshore entities’.
Indian authorities are currently investigating five Adani Group companies for multiple alleged financial crimes, including trade-based money laundering, siphoning money offshore and bribery of public officials.
It has also been revealed that a shell company based in the Cayman Islands and controlled by the Adani family will receive up to $3 billion from an overarching royalty deed. That’s right, while the Adani family is set to receive up to $120 million a year in royalties from the mine, Queensland taxpayers are reportedly set to receive just $2 million a year in royalties for the same coal. That’s not a deal, that’s getting screwed with your pants on.
The biggest cheerleader for the Adani mine, Nationals Minister Matt Canavan, washed his hands of responsibility for looking after taxpayers’ money, assuring there is “nothing inconsistent with Adani’s company structure with Australian laws” and deflecting issues about the investigations to the NAIF.
But the NAIF did not respond to questions.
Information about the NAIF’s processes is sparse, despite the agency having $5 billion tax dollars to distribute. This may be because, in the Minister’s words, “there is not really a formal submission or application process”. I feel reassured, don’t you?
The NAIF submission form to apply for a billion dollar loan includes only three fields: name, email and ‘message’. I filled in more details than that to get my Dendy loyalty card.
Late last year the NAIF said it was still developing its due diligence requirements, despite one project already being at the due diligence stage. It did not have a Risk Appetite Statement either.
Taxpayers are right to be sceptical about the NAIF subsidising the Adani mine, not even the banks want a piece of it. The mine is still struggling to attract private finance after years of trying. Westpac was the last of Australia big 4 banks to rule out financing the mine, revealing its ‘no new coal basins’ climate policy and sending Minister Canavan into fits of apoplexy.
In contrast, 12 separate large scale solar project awarded grants by ARENA reached financial close this month. It’s pretty clear the ACT has made the smart decision to go 100% renewable as soon as possible.
Threat to jobs
There have been a lot of claims – mostly dodgy claims – about the jobs the mine will create. It’s 10,000 out of court, but under oath Adani admitted it is only 1,464. But the government has been conspicuously silent on the jobs Adani’s mine threatens.
Firstly, there’s the obvious threat to the 70,000 jobs that depend on the Great Barrier Reef.
The beauty of the Reef is so exquisite it has been known to move people to tears. But now it’s the scientists weeping as they survey the death and decay of one of the great natural wonders of the world.
Severe and consecutive bleaching events over the past two years, caused by global-warming heated ocean waters, has seen 93% of reefs experience bleaching. Building a mega coal mine next door to the Reef is the opposite of protecting the many small businesses and tourism and fishing operators whose jobs rely on protecting this magnificent natural wonder.
Secondly, the Adani mine represents a direct threat to existing coal jobs in NSW and elsewhere in QLD.
Australia is the Saudi Arabia of coal. We have a larger share of the seaborne coal market than Saudi Arabia has of the world oil market. In Paris the world promised to use less coal. So what would adding the world’s biggest export coal mine do to a market with flat or declining demand?
“Bringing on additional tonnes with the aid of taxpayer money would materially increase the risk to existing coal operations,” according to Peter Freyberg of commodity trading giant Glencore. In other words, Adani threatens existing coal jobs in NSW’s Hunter Valley and Illawarra and elsewhere in QLD.
No New Coal
To protect existing coal jobs with a gentler transition, to protect tourism jobs and the Reef, it’s time for Australia to adopt a No New Coal Mines policy. Westpac already has a no new coal basins policy.
Australia has a pipeline of approved coal mines that stretches into the 2040s. If we stopped approving new coal mines, the impact on employment would be 0.04%. That’s because despite exporting lots of coal, coal mining employs few people – 99% of Australians don’t work in coal mining – and new mines threaten these existing jobs.
Anastacia Palaszczuk and Matt Canavan are bravely fighting against the tide. But make no mistake; it’s a minority view that building new coal mines is good economics or good environmental policy.
The world is abandoning coal. There is no way Australia can reduce its carbon pollution by building new coal mines. That’s like trying to cure your lung cancer by smoking an extra pack of cigarettes a day.
Ebony Bennett is the Deputy Director for The Australia Institute @ebony_bennett