Independent report shows The Australia Institute's dodgy economics... Again

December 09, 2016

Friday 9th December 2016


Independent report shows The Australia Institute's dodgy economics... Again


The Australia Institute (TAI) have again been caught using dodgy economic modelling to attack the NSW mining industry, one of the most critical industries for the future of our State.


In August 2016, TAI released a report ‘Never Gonna Dig You Up’ which claimed the NSW economy ‘would not be affected at all in the short term’ and barely affected in the medium to long term if coal mining was phased out through a ban on any new mines or extension of existing mines.


TAI’s report claimed there would be only 1,400 net job losses across the country from ending coal mining in NSW and Queensland, and that Australia would experience an overall reduction in GDP of 0.6%.


However a review of TAI’s report by highly credentialed Cadence Economics found that the ‘research’ was based on unfounded assumptions and dismissed critical economic impacts.


Key findings of the Cadence Economics analysis of the the TAI report include:

  • TAI’s entire paper is based on an unexplained and unrealistic assumption regarding employment:   TAI assumes the job losses caused by ending coal mining would be picked up by ‘other sectors’, including having workers move from the coal producing regions of NSW and Queensland to Victoria and Western Australia. In other words, they assume that real jobs will be replaced by phantom jobs.

  • TAI’s report significantly underestimates that the net number of jobs that would be lost from ending the coal industry: TAI claims net national job losses would only be around 1,400. However using the same employment modelling parameters as the Commonwealth Treasury, Cadence Economics estimates jobs lost would be between 20,000-40,000 across the nation.  Even at the lower end that’s a TAI miscalculation of 18,600 jobs or 95%.

  • Impact on NSW economy would be ‘catastrophic’: TAI’s own research glosses over the economic impact to NSW which Cadence Economics describes as ‘catastrophic.  Ending the coal mining industry in NSW would result in 33,000 fewer jobs across the State in 2040, $2.8 billion in lost mining royalties and a staggering $57 billion total loss to the State economy.

  • Massive impact on Hunter Valley ignored: The TAI report virtually dismisses the disastrous impact that ending coal mining would have on the Hunter Valley.  Using TAI’s own numbers, Cadence Economics estimates a cumulative economic loss for the Hunter of $76 billion.  On TAI’s own numbers, the Hunter economy would be reduced by a third.  

  • TAI report breaches its own self-proclaimed ‘code of practice’ for economic modelling.



“The Cadence Economics review shows that in contrast to the claims of The Australia Institute, ending the coal industry in NSW would have a devastating impact on employment and the State economy and would deliver a massive economic body hit on the Hunter,” NSW MInerals Council CEO, Stephen Galilee said today.

“Considering the front cover photo of the TAI report on the coal industry is actually of a gold mine in Kalgoorlie, it’s fair to say this report is riddled with errors from cover-to-cover,” Mr Galilee said.


This latest piece of discredited ‘research’ by TAI continues an embarrassing pattern of economic blunders from this anti-mining outfit.  In 2014, a report by TAI was shown to be $17 billion out in its calculation of alleged government subsidies to the mining sector; subsidies which the Productivity Commission has repeatedly stated are in fact ‘negligible’.


In the same year, TAI was forced to publicly apologise for a series of economic bungles in its submissions opposing several coal mine expansions in NSW.


“TAI’s economic credentials are a joke. They have become the ‘Derek Zoolander’ of economic modelling; you just can’t take them seriously,” Mr Galilee said.   


The full report can be found at:


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