With costs rising for public infrastructure, the government needs to stop approving coal and gas mines

by Greg Jericho


In a tight labour market, approving new coal and gas mines is not just bad for the climate, it also raises the cost of public infrastructure projects.

Today the Minister for Infrastructure, Transport, Regional Development and Local Government, Catherine King released the independent review of the Australian infrastructure program.

The report notes that there has been a $33bn increase in projected costs of infrastructure programs over the next 10 years. Such an increase is due to supply-side issues that have caused an increase in costs of materials used for construction and for workers in Australia’s tight labour market.

The report notes, “The Australian Government cannot afford within the current program settings, to meet the identified cost pressures, nor add any new projects for delivery to the pipeline in the next ten years, without significant changes taking immediate effect.”

While it is clear that the blowout in costs due to unforeseen supply-side issues is a pertinent case for the Government to change its Stage 3 tax cuts which will cost around $320bn in forgone revenue over the next decade, the fight for resources in an economy nearing full employment also means the Government needs to stop approving new coal and gas mines. Adding new projects needs also to consider new coal and gas mines which will only add to the cost pressures.

Not only are such projects horrific for the climate, and drive temperatures higher due to increased emissions, they also direct resources and labour away from being used on public infrastructure that improve productivity and the welfare of Australians but also can drive the decarbonisation of our economy.

In the past year almost the amount of engineering contraction done by the oil and gas and other minerals sector for itself is almost half the amount of total infrastructure work done for the public sector. But the situation is worse when we look at the value of work to be done. Some $32bn worth of work is yet to be done constructing private infrastructure for oil, gas and other minerals mines which is more than is to be done building public roads and bridges.

The oil and gas and fossil fuel sector is sucking workers and resources away from public infrastructure in order to build new mines that will emit many millions of tonnes of greenhouse gases.

The government needs to stop approving more coal and gas mines that are bad for the climate and which raise the costs of providing valuable infrastructure for all Australians.

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