Several weeks ago I was one of 150 plus people down at the Townsville Entertainment Centre delivering our StopAdani message to ALP members arriving for the ALP Queensland State Conference. Later that morning I met a friend who seeing my t-shirt, asked me why I wanted to Stop Adani. He said Adani is promising jobs and Townsville needs jobs at the moment. And what about all the taxes and royalties that the mining industry pays? Mining was a key part of the Queensland and Australian economy – Australia might have once ridden on the sheep’s back but now we depended on mining for our prosperity.
A good discussion ensued but I have since done some further research so I will better be able to answer his questions when next we meet.
The first thing I want to say that for me a major reason for opposing the Adani mine from proceeding is a moral one. Climate change is real. In December 2015 nations of the world came together in Paris and for the first time came up with a plan to keep global temperature increase to less than two degrees above pre-industrial levels. An important part of this plan is to reduce reliance on fossil fuels and Australia for its part should not be contemplating allowing the development of what will be the country’s largest coal mine. This is reason enough to stop the Adani mine from proceeding.
What about jobs? The number of jobs promised by Adani is a moving feast. Initially the talk was all about 10,000 jobs and then came the Land Court hearing where Adani’s own expert witness Jerome Fahrer from ACIL Allen Consulting put the number of jobs created over the life of the Adani project at 1464. Adani spokesman Ron Watson has since criticised the economic model used by Fahrer and said it was a net figure and too conservative. Fahrer’s model took into account the fact that there are only a finite number of workers and more jobs in one place will mean less somewhere else.
Another factor that was not even considered in Adani’s job calculations is the fact that global coal consumption is falling and a large new mine in the Galilee Basin will have a devastating impact on existing mines in central Queensland and the Hunter Valley. The net number of jobs produced by Adani is likely to be well below even the 1464 figure.
Jonathan Rooyen, a member of the Queensland Airports Board was recently criticised by Townsville Mayor Jenny Hill for opposing the Adani mine. Mr Rooyen had said that there is no need for our governments to be contemplating spending billions of dollars on subsidies to Adani for a project that will provide less than a thousand direct jobs, will result in untold environmental damage, and cause economic hardship in other regional areas of Australia. As long as there is a few jobs for Townsville, Jenny Hill apparently does not care about the possible impact on employment in other parts of Australia.
What about the contribution of the coal mining industry to the Australian economy. Politicians and lobby groups like to tell us that coal mining is the backbone of the Australian economy. Richard Dennis in his must-read book “Econobabble” puts the contribution of the coal mining industry to the Australian economy in true perspective. He asks how can an industry that employs 40,000 out of a total 11.8million employed people in Australia be considered the backbone – this represents only 0.39% of the total work force. In comparison the manufacturing sector employs 870,000 and education 960,000.
And what about the contribution of the coal mining industry to our economy. Richard Dennis shows that the taxes and royalties paid by mining companies to all levels of government account for less than 5% of government revenue and this is the total amount paid not the net amount after all deducting all the subsidies they receive. The Queensland Government receives more from car registrations and speeding fines than it does from the coal industry.
And what about Adani – is Adani likely to go against the trend and become a major contributor to government revenue. Not if what we have seen so far is anything to go by. There are two Adani subsidiaries that operated in Australia in the 2014/15 Financial Year. The first is Adani Abbot Point whose Total income was $350,204,603. Its Taxable income was $0 and Tax paid also came to $0
Adani Minerals did a little better. Its total income was $135,934,900 and its Taxable income a paltry $131,098 (= 0.1% of total income) with Tax paid amounting to $39,329 (= 30.0% of taxable income).
To understand more about how Adani and other large corporations minimise their tax contributions, refer to this recently published article by Simon Foale in New Matilda.
These are some of the moral and economic reasons for opposing the Adani mine. Then there is the environmental damage that will result from the mine and the way in which Aboriginal traditional owners have been manipulated in an attempt to get their permission. The we need to add to that the shocking record of Adani described in the Adani Files.
All in all a pretty bleak picture of a company that we should not be involved with and a mine that should not go ahead.