Australia's protection of the coal mining industry doesn't add up from an evidence and economics perspective, writes Tarric Brooker.
OF ALL THE TIMES Prime Minister Scott Morrison has engaged in political theatre in Parliament, there is one example that will always stand out in the minds of the electorate more than any other. It was when Morrison was Treasurer, bringing a lump of coal into the Lower House in 2017, telling his fellow MP’s “this is coal ... don’t be afraid ... don’t be scared".
Unsurprisingly during the election campaign, the Prime Minister repeatedly came to the defence of the thermal coal industry, as the Adani coal mine became a major issue in the fight for the public’s votes, particularly in rural Queensland.
The key issue in the battle was about jobs.
Adani initially claimed that its new mine would create 10,000 jobs, but later that was revised down by Adani’s own economist to just 1,464 ongoing jobs once the mine was operational.
Despite, the Adani coal mine contributing less than two days’ worth of annual Australian employment growth, jobs in the coal industry are talked up to be far more noteworthy than they actually are.
According to an investigation done by the ABC, the entire thermal coal industry employs just 29,000 people, based upon the most favourable estimates available.
To put that into perspective below are a few companies to contrast the total number of jobs created:
In principle, I don’t think anyone would take issue with the Coalition encouraging job creation in rural areas. In fact, if the Prime Minister got together with Opposition Leader Anthony Albanese, I’m sure Labor would likely offer its support to assist the often-forgotten citizens of rural Australia.
But that isn’t what the Coalition is doing. Rather than offering a "Bush New Deal" to ensure its prosperity as it struggles to adapt to climate change and the drought, the Morrison Government is ensuring that Adani mine goes ahead, with a relative handful of jobs used as a justification.
Last week, BlackRock, the world’s largest fund manager with $7 trillion under management, announced that it was dumping over $500 million worth of shares in thermal coal mining companies. They became just the latest in the long line of banks and fund managers to divest itself of interests in the thermal coal industry.
While climate change was no doubt a major consideration in BlackRock’s decision making, the reality is the thermal coal industry is very slowly dying solely from internal market forces.
As a result, more than one third (37%) of the thermal coal industry’s assets are now uninsurable, with reinsurance no longer offered on 46%.
Despite the writing on the wall for the thermal coal industry, the Queensland and Federal governments have committed to $4.4 billion in subsidies, royalty holidays and tax breaks for the Adani coal mine.
All for just 1,464 ongoing jobs, that became a political issue that may have cost Labor the Election.
If the Prime Minister wants to support jobs in rural areas and encourage companies to do business in the bush, that would be a fantastic and much-needed development. But right now, the Coalition is defending a handful of jobs in an industry that employs fewer Australians than Colonel Sanders' KFC and doing far too little to contribute to other forms of job creation in the bush.
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