Lordy, some sense on Adani, via The Guardian:
The shadow climate change minister, Mark Butler, has warned the development of the Galilee basin is not in Australia’s national interest, because it would displace mining and jobs in existing coal regions, and would not help the world meet its obligations under the Paris climate agreement.
Butler has used a speech to the Sydney Institute to argue the controversial Adani coal project is “utterly exceptional” because it is the only significant export-oriented greenfields mine opening up “on the face of the planet”.
He said developing the Carmichael mine would fly in the face of current market trends, where export volumes for thermal coal had been flat for several years, and would also be inconsistent with the International Energy Agency’s advice “on what the world needs to do … to keep global warming well below two degrees”.
Butler said it was possible the Adani project “might notionally go ahead if the Turnbull government finds some way of throwing a heap of taxpayer money at it” but he argues the industry is clear Adani would have a zero sum effect, displacing “coal and jobs in existing coal regions, like the Hunter Valley”.
“For the life of me, I can’t see how that prospect is in the national interest.”
- Quite right. Adani will be a subsidised marginal cost producer with a breakeven above $100. It will therefore lower the price and force other high cost coal out of business in QLD and NSW. AS Wood Mackenzie has modeled:
- Ten new mining projects or mine expansions in the NSW Hunter Valley would be displaced by the Galilee Basin output and shelved or delayed
- Eight mining projects or expansions would be delayed or shelved in Queensland
- Hunter Valley thermal coal output would fall by some 86 million tonnes, or 37 per cent
- Bowen Basin output would decline by nearly a third, with 17 million fewer tonnes mined
- The Surat Basin in south-east Queensland, which is yet to be developed, would produce 37 per cent less coal than it otherwise would
This is digging holes just so you can fill them in again.
Meanwhile, Labor’s minimum wages policies are evolving, at The Australian:
Bill Shorten’s Labor Party is backing away from a controversial proposal to legislate significant minimum wage rises, instead considering a plan to force the Fair Work Commission to give greater weight to the needs of low-paid workers when awarding minimum wage increases.
Employers warned the new approach, flagged yesterday by opposition workplace relations spokesman Brendan O’Connor, would still cost thousands of jobs.
A Shorten government would consider amending the Fair Work Act to change the factors the commission must take into account when determining annual increases, under the new approach.
The commission currently takes into account the performance and competitiveness of the national economy, including productivity, business competitiveness and viability, inflation and employment growth. It also considers the promotion of social inclusion through increased workforce participation, relative living standards and needs of the low-paid, and the principle of equal remuneration for work of equal or comparable value.
Mr O’Connor told The Australian: “Labor still considers the commission to be essential in setting wages in this country, but given the persistent low wage growth, we are considering whether the independent umpire has sufficient guidance from the parliament to ensure workers get their fair share.”
It makes sense to keep whatever mechanism is used flexible. This is about rebalancing equity as much as it is economic outcomes. Australia’s economic challenge is unchanged. We are only part way through an historic reversion to mean in the terms of trade. That means falling national income and labour should take its fair share of the pain to repair national competitiveness in that scenario. The issue is that to date it has taken all of the pain and capital not enough.
Re-weighting Fair Work priorities is a way of rebalancing the ledger without entirely locking us into a wage inflation structure that works against the adjustment. The last thing we need is to do is to use the terms of trade adjustment as an excuse to hollow out our middle classes and create a permanent demand deficit such as that plaguing the US. We already face a large challenge on that front as deleveraging overtakes the household sector.
