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.