Treasurer Joe Hockey Joe could be funding a railway to nowhere using vital Northern Australia infrastructure funding, writes ACF economist Matthew Rose

When Sarah Palin was making her run for US vice president, she was criticised for having supported a $US398 million government funded "bridge to nowhere" in Alaska while she was governor of the state. The bridge in question was to replace a ferry to an island community of just 50 residents.

Compare this with the perceptions of our Treasurer Joe Hockey and a Federal Government who seem ready to use taxpayers' money to help Adani build a massive railway to support the Carmichael coal mine, which is not economically viable and will quite possibly never be dug.

In the absence of forthcoming private sector funding, Treasurer Hockey has suggested the railway could receive funding from the Northern Australian Infrastructure Fund.

Joe could be funding a railway to nowhere.

To date, close to a dozen banks have said they won't lend to the Carmichael project. And there are very good reasons why the project can't attract financial support from the private sector. The coal price has crashed and the export market for coal is uncertain. Just two months ago a Queensland coal mine called Isaac Plains sold for $1.

Financial analysts such as Citigroup have explained their decision not to support Adani by saying Chinese demand for coal is dropping, and in India there is serious discussion about ending coal imports in the next five years.

Indian Energy Minister, Piyush Goyal, is on the record stating this year that "we are confident that in the next year or two, we will be able to stop imports of thermal coal, while imports of coking coal will continue until we are able to explore more reserves".

Government analysis released late on Friday afternoon demonstrates that if global governments push ahead with their current targets at the Paris climate conference the value of Australia's coal exports will be 8 per cent lower by 2030. No wonder the data was released late on a Friday, when the government must have hoped no one would notice.

In the face of all this evidence and economic analysis the government says it may still invest in this project.

Australians would rightly be shocked and outraged if the Communications Minister, Malcom Turnbull, declared that the Commonwealth was putting millions of dollars into the Blockbuster video chain because it wasn't commercially viable on its own, but with government support it would create jobs for Australian workers.

Yet by supporting Adani's project Joe Hockey is looking to invest taxpayer's money into what would quickly become a stranded asset.

Australians can see that the rest of the world is heading away from fossil fuel investment but the Australian government is going full steam ahead in the opposite direction.

Since coming to office, the Abbott government has established a clear pattern of trying to stymie the growth of the renewables industry by revising down the Renewable Energy Target and trying to abolish the Clean Energy Finance Corporation – while unashamedly protecting the coal industry with law changes and perverse financial support.

Leaving aside environmental concerns, this strategy clearly puts Australia at risk in the world economy. It also reveals the Abbott government's systemic failure to responsibly manage Australia's finances for the long term.

There are many worthy projects that need funding across Australia and indeed across northern Australia, including funding for indigenous employment programs. If Mr Abbott genuinely wants to be the Prime Minister for Indigenous Australia, this is where the government should be directing funds.

The current Environment Minister, Greg Hunt, set up the Indigenous Rangers program when he was Parliamentary Secretary in the Howard Government. This program is truly transforming the lives of indigenous people and communities in northern Australia.

There is also great potential in the north for carbon farming – an activity that would bring employment and set Australia up as an innovator in the clean economy of the 21st century. These are long term projects that won't destroy the environment but will improve people's lives in the long term.

Australians can see that the government is servicing big business over the interests of the wider community. Campbell Newman tried to pour taxpayers money into the Carmichael coal mine and it contributed to his government's downfall. Joe Hockey and Tony Abbott would proceed down that course at their own peril.

Matt Rose

Economy and Democracy Program Manager