Miner's Pan Think Tank The Australia Institute's Coal View

December 09, 2016

As published in The Australian 9 December 

Left-leaning think tank The Australia Institute has been accused of fudging economic facts in a report where it suggested that imposing a coalmining moratorium would have a minimal impact on jobs and the economy.
 
The nation’s peak mining industry groups have described The Australia Institute’s report as a “joke”, after it claimed only 1400 net jobs would be lost and the hit to GDP would be just 0.6 per cent.
 
Cadence Economics — engaged by the country’s three peak minerals council groups — shows the estimated jobs lost could reach between 20,000 and 40,000.
 
The industry-backed report, which will be released today, reveals a potential $6.6 billion impact on mining royalties in Queensland and NSW, and a $129bn blow to the two states’ economies between 2019 and 2040.
 
“Based on TAI’s figures, we estimate that the cumulative loss to Australian GDP is $57bn in discounted 2014 dollars … or $177bn in undiscounted 2014 dollars,” the Cadence Economics report said.
 
“The size of this loss is likely to be an underestimate because TAI’s modelling is based on the assumption that the moratorium will have no impact on aggregate Australian employment.
 
“This is a highly contestable assumption that if relaxed could see estimated job losses of between 19,200 and 38,400, and considerably higher economic costs measured by GDP.”
 
NSW Minerals Council CEO Stephen Galilee launched an attack on the TAI report, titled “Never gonna dig you up! Modelling the economic impacts of a moratorium on new coal mines”, labelling The Australia Institute as the “Derek Zoolander” of economic modelling that can’t be “taken seriously”.
 
“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,” Mr Galilee said.
 
“Considering the front cover photo of the TAI report on the coal industry is actually of a goldmine in Kalgoorlie, it’s fair to say this report is riddled with errors from cover-to-cover.
 
“TAI’s economic credentials are a joke.”
 
Queensland Resources Council CEO Ian Macfarlane, a former federal resources minister, said the “research” put forward by TAI, was based on “unfounded assumptions and discounted critical economic impacts”.
 
A resurgent coal price and progress on the development of the Adani project has buoyed the industry in recent months.
 
“These quasi-economic reports will only denigrate the natural resource sector’s ability to provide jobs in communities and royalties that pay for nurses, police and teachers,” Mr Macfarlane said.
 
The Australia Institute executive director Ben Oquist stood by the report and “the estimates contained therein”.
 
“The work was done jointly with Victoria University’s highly respected Centre of Policy Studies, and was based on standard modelling assumptions which are extensively detailed in the report,” Mr Oquist said.
 
“A moratorium on new coalmines would lead to a very slow decline in the industry over time with little or no effect on Australia’s economy.”

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