Australia Institute

Finance: Phasing Out Coal Won’t End Aus Economy, Says Australia Institute

Phasing out of coal production would not hurt Australia’s economy, according to an Australia Institute research.

The study found that the national economic impact would be insignificant if the Government put a moratorium on coal mines opening and expansion, although it could hurt regional areas relying on the industry.

“The world outlook for coal is fairly bleak. We don’t see much likelihood of strong market conditions for coal over the longer term,” said the research’s leader at Victoria University’s Centre Of Policy Studies, Professor Philip Adams to ABC’s AM. “There is enough coal in mines that are operating or will be operating to continue the level of exports that we see now.

“But, thereafter, coal production will slow as new mines which otherwise would come on are not allowed to come on.

“Is this a bad thing for Australia? The answer is no.”

Australia Institute chief economist, Richard Dennis said the impacts of a moratorium on the economy will be “trivial… Literally, when you graph the economy with a moratorium and without a moratorium, you need a microscope to find the difference.”

The report concluded with calls for a moratorium on new coal mines and expansions, and that the Government “should expect minimal economic disruption from doing so.”

The mining industry has rejected the study’s findings. The Chief Executive of the World Coal Association, Benjamin Sporton said coal still plays an important role in providing energy to the world, with coal currently providing 41 per cent of the world’s electricity and 90 per cent of Australia’s eastern seaboards.

“To try and say we’re going to move away from a fuel that provides that much of the world’s electricity, I just don’t think is realistic,” said Sporton.

The Executive director of Minerals Council of Australia, Greg Evans said the report is “a nonsense” and “just more anti-coal rhetoric, not analysis”.

“Only the green movement and their mouthpieces such as the Australia Institute (TAI) would be able to contend shutting down Australia’s second largest export industry would have limited economic impact,” said Evans in a statement.

“Annual coal exports at $38 billion in 2014/15 are almost twice those of beef, wheat, wool and wine combined so under their logic eliminating those great industries would also have negligible consequences.

“There are also 44,000 direct jobs in the coal sector and including related jobs, the number is around 150,000 and the majority of those are in regional areas. The TAI should travel to the Hunter Valley and Bowen basin coal towns and promote their economic thesis that the coal industry doesn’t matter.”

Prime Minister Malcolm Turnbull has previously rejected calls for a moratorium, saying that it would not help “one iota” to relieve climate change if coal exports were to be stopped.

Construction appears to be holding the Aus economy in the green so far with increased foreign spend on property leading to more capital expenditure on equipment sales. The advent of price comparison sites like equipment hunt issuing excavator quotes for free make the market more competitive with buyers getting the best deals.