Tony Abbott was in Townsville recently exhorting the region's business community to develop a plan for a coal fired power station, one that could be paid for through the $5 billion subsidised loan facility set aside in the recent Federal Budget, writes Matthew Rose
With those comments the Prime Minister gave a nod and a wink to an existing plan for a power station to be built next to a proposed coal mine in the Galilee Basin.
On the same day the International Monetary Fund estimated the cost of the world's fossil fuel subsidies at $5 trillion dollars, more than what is spent on health care by all the world's Governments.
Here in Australia, as well as elsewhere, polluters are being subsidised to pollute, giving them no incentive to clean up their acts.
The Government not only wants this situation to continue, it wants it to grow.
When asked about the $5 billion set aside in the budget for as yet undisclosed "Northern Australia infrastructure", Finance Minister Mathias Cormann responded "What it will do is it will be available to help us leverage private sector investment in important productivity enhancing infrastructure projects for tomorrow. Coal is an industry that I would like to see grow and prosper."
Unsurprisingly the Queensland Resources Council welcomed the announcement, stating "this is great news for boosting the resource sector potential of Cape York and the North West Minerals Province".
(For those of us who think of Queensland as more than just a quarry, 'North West Minerals Province' is what the mining industry calls the area between Longreach and the Gulf of Carpentaria.)
The Federal Government acknowledges that loans will be available to support projects the private sector "would not be able to finance without government assistance".
So it's interesting that Adani, the proponent of the Carmichael Coal and Rail project and the associated port expansion at Abbot Point, is currently on the lookout for capital required to fund its project.
That funding is unlikely to come from the new Queensland government, particularly since Premier Annastacia Palazczuk made it clear in the lead up to the state election that new infrastructure should be funded by business, not taxpayers.
"The onus is on the government and Jeff Seeney to stop hiding the details of the deal so that Queenslanders can know what price they're paying," Ms Palazczuk said at the time.
We now know the Newman government had set aside $33 billion from asset sales to fund infrastructure such as more than 100km of rail lines, airports, electricity links and water pipelines. For many Queenslanders this was an unconscionable drain on the public purse. Such overreach contributed to the Newman government being turfed from office.
The conditions for commercial applicants now looking to the self-declared coal-loving Federal government for such funds are not onerous. Loan recipients would be required to return at least the Government bond rate over the term of the loan. In other words, the Federal Government will borrow on behalf of projects that are commercially unviable and expect no risk premium in return.
This stands in stark contrast to the conditions placed on the Clean Energy Finance Corporation (CEFC), which acts as a co-investor, not financer, of clean energy projects. Earlier this year the Government changed the conditions for the CEFC, requiring it to make a considerably higher return from its investments than the average return from the market.
The Government's priorities cannot be any more plain.
In a press release related to the Northern Australia Infrastructure Facility, the deputy Prime Minister and Minister for Infrastructure and Regional Development said "this work will assist in allocating funding to infrastructure projects that return the highest benefits to communities for a stronger and more prosperous northern Australia".
The key test for the proposed fund will be whether or not projects, once they're selected, do indeed return the highest benefits to communities in northern Australia – and that includes their impact on clean air and the climate.
It'd be hard to argue that building the world's biggest coal port will bring the highest level of benefit to communities in the north.
After all, a recent court case in the Brisbane Land Court found claims that the project would create 10,000 jobs were grossly exaggerated, with the real figure being 1,464 direct and indirect jobs at the mine.
Lots of leading global banks, including many of the biggest lenders to Australian fossil fuel projects, have raised concerns about Adani's proposed Carmichael coal mine and rail project and port expansion, including Société Générale, BNP Paribas, Credit Agricole, Barclays, Royal Bank of Scotland, Deutsche Bank, HSBC, Citi, Morgan Stanley, JP Morgan and Goldman Sachs.
Queenslanders, along with citizens all over the country, would be justifiably appalled if this risky and unpopular coal mine ended up getting funded with their taxpayer dollars.
This article first published in the Brisbane Times