Would we “go broke” without coal? > Check the facts
Agriculture Minister Barnaby Joyce has said that without coal “we go broke”. Would Australia, or any particular state encounter serious fiscal difficulty if coal production and consumption was reduced?
New South Wales and Queensland are Australia’s main coal producing states, producing 257 and 294 million tonnes respectively in 2013-14. Victoria the next largest is far behind, producing around 70 million tonnes, while the other states produce only around 10 million tonnes between them.
Even in New South Wales and Queensland, revenue from coal royalties makes up only 2 and 4 per cent of state revenue. So while a reduction in these royalties would make a difference of hundreds of millions of dollars, more than 95 per cent of their revenue would remain. To put it in perspective, in both Queensland and NSW they raise about the same amount of revenue from car licences and registration and traffic fines as they do from coal royalties.
At a federal level, research commissioned by the Minerals Council of Australia shows that all mining paid around $12 billion in company tax last financial year. While the study does not disaggregate the coal sector from other mining, given the size of the Australian iron ore sector and the low profitability of coal mines over the last few years it is unlikely to amount to even half of this sum. If company tax from coal did amount to $6 billion in 2013-14, this would represent around 1.5 per cent of the Commonwealth’s revenue. Again, losing this money would reduce government income, but would not threaten the vast bulk of its revenue.
While not significant for Australian governments, the large amounts of coal Australia produces do sell for large amounts of money. However, as the coal industry is 80 to 90 per cent foreign owned most of this money does not stay in Australia.
As an employer, the coal industry is insignificant. 43,000 people are employed in the coal industry out of 11.6 million people employed in Australia, or less than half of one per cent.
Clearly, Australia would not “go broke” without coal.
Clearly… and as a monetary sovereign, Australia cannot go broke, full stop. This is a fact that Joyce and the others in parliament – from both sides of the house – don’t seem to know or understand.
Excellent point…
If the greens etc would get out of the way and allow nuclear energy to do what it should be doing you could dramatically lower our emissions and get full base load power a lot cheaper than so called renewables.
Joyce is a dumb-ass?
“Go broke”? Either these Liberals expect people to believe that Australia’s federal budget is “just a big household budget” or they actually think that way. At this point, either one would explain a lot.
When a five year old boy or girl asks about the federal budget, saying that it’s like a household budget is a good place to start, but when adults undergo years of training to understand these issues, it is plan unacceptable.
The problem is more the injection of external funds into our economy; but of course we could also do a USA and print money ..
So all them facts, what about the flow on effect to all other areas that mining uses. What about the lost of spending all over Australia from mining companies and its workers?? There would be massive effects in Australia without it. Maybe Australia wouldn’t go broke, but hundreds of thousands of people who relie on mining directly or indirectly would.
Except that no one is suggesting that we simply drop coal mining. Instead, we would replace it with investment in renewables and efficiency and other green infrastructure, which would provide many, many more jobs than coal.
Continuing to hang on to coal is a bit like saying that we really need to hang on to our horseshoe industry because without it we’d go broke and think of all the blacksmiths that these new horseless carriages are going to put out of business.
And these figures don’t include all the externalities associated with mining, transporting and burning coal. Public health costs just in the Hunter Valley were recently estimated at $600m annually, while the public health costs of our coal exports likely run into the tens of billions (the cost of air pollution in China, largely due to public health costs, is estimated at something like 10% of GDP).
And even that hasn’t even started to calculate climate costs. To give a very small sense of this, continuing the burn coal will very likely end the Great Barrier Reef as a coral-dominated ecosystem, probably well before the end of this century. The GBR brings in billions of dollars of tourism annually. And that’s just a tiny taste of the global damage to which we are very significant contributors.
One of the key externalities with the use of coal is the use of water.
The coal fired power stations in Victoria use the equivalent of one third of melbournes water supply each year.
http://environmentvictoria.org.au/index.php?q=content/coal-and-water-use#.VQTM8xhXerU
http://www.ucsusa.org/clean_energy/our-energy-choices/energy-and-water-use/water-energy-electricity-coal.html#.VQTNnRhXerU
http://www.energymatters.com.au/renewable-news/em3281/
The man is a moron. If we keep trying to sell horse shoes we go broke.