The Palaszczuk Government risks a voter backlash as it breaks a clear election promise which ruled out subsidising the Adani coal project, according to a new report from The Australia Institute.
First, the Queensland government is ultimately responsible for a $1bn subsidised loan from the Northern Australia Infrastructure Facility (NAIF). Secondly, the Queensland government has offered Adani a royalty ‘deferment’, reportedly worth hundreds of millions.
“The Queensland government plans to give two different subsidised loans, breaking its election promise – twice over,” said report author Tom Swann, researcher with The Australia Institute.
“The Palaszczuk government could veto the NAIF loan to Adani at any time. By failing to veto loan, the government is effectively taking funding away from other job-creating investments in Queensland, for example in tourism, agriculture or renewable energy.”
“Queenslanders will pay for this subsidy, like all federal taxpayers. And like all Australians, Queenslanders would prefer this money to be spent on nearly anything else.
The report identifies the subsidy characteristics of the NAIF:
- The Commonwealth Budget papers, which account for the NAIF’s concessionality as a substantial budgetary cost of $1.6 billion over four years; (Looks)
- The Productivity Commission, who in Senate Estimates confirmed that concessional loans are subsidies; (Walks)
- The WTO’s definition of subsidy, under which concessional taxpayer loans are subsidies; (Quacks)
“Equally, the royalty ‘deferment’ fulfills any definition of a subsidised loan. And while the terms offered to Adani are being keeping secret, it appears from media reports to be in the hundreds of millions of dollars,” Swann said.
“The report calculates at current coal prices the government could end up loaning Adani at least $370 million and as much $700 million, depending on coal prices and what scale of mine goes ahead.
In 2013 the Queensland Treasury wrote: “Governments face budget constraints and spending on mining related infrastructure means less infrastructure spending in other areas, including social infrastructure such as hospitals and schools.”
Polling shows subsidies unpopular
A ReachTEL poll of 1,618 Queenslanders in May 2017 showed strong opposition to subsidies for the Adani coal proposal, including among LNP and One Nation voters. 57% said the Queensland government should reject the loan, in order to fund other projects. A poll in 2016 showed most Queenslanders, like all Australians, selected virtually any other investment as a priority over coal infrastructure.
“With poll after poll showing growing opposition to subsidising Adani, Premier Palaszczuk has again said her government won’t do it. The problem is, her claim is simply not correct.
“Subsidising Adani’s mine is not just unpopular and costly, but puts other jobs at risk. While reef tourism is at risk from subsidised new coal mines, so too are jobs in other coal regions,” Swann said.