Malcolm Turnbull’s language around innovation and embracing economic opportunities is a welcome change to the “coal is good for humanity” rhetoric of his predecessor.
The new Minister for Energy, Resources and Northern Australia Josh Frydenberg was also off to a positive start around embracing new economic opportunities when early last week he made it clear that renewable energy will be a “key part” of the Federal government’s energy platform.
However, this optimism has been tempered by Frydenberg’s subsequent comments about the Government’s openness to bankrolling the rail line to proposed Galilee Basin coal mines, including Adani’s controversial Carmichael mine through Northern Australia Infrastructure Fund.
The Northern Australia Infrastructure Fund was a late addition to the last Abbott-Hockey budget. It is a $5 billion concession loan fund for projects in Northern Australia. Despite the budget being handed down over 4 months ago no criteria exist yet by which potential projects can be judged to be eligible for these loans. This uncertainty led to the former Treasurer stating that projects that were uneconomic were the most likely to receive a concessional loan. The Galilee Basin rail line was being looked at closely for a concessional loan.
There are opportunities for this fund to be used on long term sustainable infrastructure projects that don’t involve jeopardising Australia’s natural environment. These include tourism infrastructure, renewable energy projects and new energy efficient sustainable housing. All infrastructure projects which help improve the productivity of the Northern Australian economy and the lives of the residents of Australia’s north.
Any eligibility criteria for this fund should ensure projects help add to rather that reduce the environmental capital of Australia’s north which is critical to the tourism industry.
Minister Frydenberg has already stated that a critical part of his job is to strike a balance between the interests of the mining industry with the environment. If he is interested in achieving this balance he needs to drastically tip the scales back in favour of the environment. Successive Australian governments have provided fossil fuel subsidies to the mining and extractive industries. The OECD just recompleted and released a comprehensive review of fossil fuel subsidies provided by the Australian Government both through direct expenditure and tax concessions. In 2013-14 fiscal year the OECD worked out that fossil fuel subsidies provided by the Federal Government totalled $7.8 billion dollars.
The Minister has indicated he will be meeting with the Minerals Council and is planning to travel across Northern Australia to meet with other representatives of the resources industry. Meeting with stakeholders in a Minister’s portfolio is prudent and the environment movement looks forward to the opportunity.
At the top of our list will be an insistence that the Northern Australia Infrastructure Fund shouldn’t be used to subsidise the world’s biggest coal mine in the face of dangerous climate change and market forces that are making their judgement on coal abundantly clear. The coal price has crashed and this makes the Adani Carmichael Mine un-viable, if the Minister’s faith in the market is as unshakeable as his previous rhetoric and action suggest then he shouldn’t be considering the use of taxpayer funds in this project.
The Government needs to put in place clear criteria for the use of this fund, and utilising the skills of Infrastructure Australia to evaluate it would be a good place to start.