May 2018


Why Adani won’t die

By Richard Denniss

The Carmichael coalmine is as much about symbols and interests as it is about jobs and money

In case spending $1 billion of taxpayers’ money to subsidise the world’s largest export coalmine didn’t seem crazy enough, a coalition of Coalition MPs is now pushing for a $4 billion subsidy for a new coal-fired power station. No doubt Barnaby Joyce will also demand a further $10 billion to build another inland railway line through National Party seats to link the Adani mine in Central Queensland to the new power station in Victoria’s Latrobe Valley.

The era of small government is dead, killed by conservative politicians who prefer to subsidise boondoggles and white elephants than stick to their alleged principles. Indeed, this time last year Tony Abbott was calling on his own party to scrap all new spending initiatives in order to get the deficit under control. This year he is the highest profile member of the so-called Monash Forum that is demanding the new government-funded power station. And politicians blame Twitter for the public’s loss of faith in politicians.

While some environmentalists and bankers have been saying for years that the Adani coalmine will never be built, the project just won’t die. There is a simple reason for this seeming resilience, and it is inextricably linked to the Monash Forum’s recent calls for a new era of coal-fired power construction: with enough public subsidies, any project can be rendered profitable. 

The fact that world coal demand has fallen three years in a row won’t stop it being built. The fact that the cost of renewables has fallen by 80 per cent in the past 10 years won’t stop it. The outrage over the fact that the mine would take an unlimited amount of water from the Great Artesian Basin, for free, won’t stop it. And nor will the fact that it will never employ anything like 10,000 workers. None of these things will stop the mine for the simple reason that, contrary to most of what passes for commentary on the issue, it’s not just about jobs or money. As always in Australian politics, it revolves around symbols and interests.

Symbols matter far more to politicians than many voters and political scientists seem to realise. Why else would allegedly “libertarian” Liberal MPs have defended the rights of same-sex couples to live in loving  relationships but fought to deny them the right to get married? The symbol of marriage mattered more than the principle of freedom to choose. Similarly, the symbolism of the date of Australia Day and whether or not the Queen is our head of state matters as well, as does the colour of the ties that male politicians wear at the National Press Club.

Fights about symbols are symbolic, too. All successful politicians know that losing a fight, any fight, sends a very bad signal. Any loss, no matter how small, is a symbol of weakness. If a backbench MP loses a fight to get into the ministry, they have a greater chance of losing their preselection next.

Abbott and Eric Abetz know that if the date of Australia Day gets changed it will be harder to fend off calls for a republic. If they can rally their troops to defend the symbolism of January 26, it will send a signal that they remain a force to be reckoned with. And if they lose the fight about January 26 …

Of course, symbols aren’t the only thing that matter in politics. Money matters too. The federal government spent more than $460 billion this year. It’s the parliament that decides who gets that money. But despite all the rhetoric from business groups about the need to cut spending and reduce the size of government, each sitting week Parliament House is full of business lobbyists asking for subsidies or tax concessions. Politics is big business. 

Which brings me back to Adani. This is not just a totemic fight for political conservatives; it’s also a fight about money. Lots and lots of public money. While it’s widely known that Adani wants a billion dollars from Australian taxpayers, few people realise that Australian taxpayers spend billions of dollars each year subsidising resource companies. And the mining industry knows that if environment and community groups can win a fight about the Adani subsidies, then it won’t stop there. Taking money off a group is symbolic as well, which is why conservatives are willing to spend so much money chasing the small debts of welfare recipients, and are also willing to forgo the debts of politicians who were wrongly elected to parliament.

So here we are, watching an enormous political fight over a mine that no bank thinks we need and few voters could place on a map. At collectively 40 kilometres long and 10 kilometres wide, the Adani coal pits are enormous, but the size of the political fight about the mine has far more to do with power and money than it has to do with planning laws or the need to create jobs. 

The word “jobs” is the most offensive four-letter word in the political vocabulary. It is an insult to the 730,000 unemployed people in Australia forced to live on a mere $245 per week. If Australia needs to cause climate change and pollute our water to “create jobs” because there’s a shortage of them, how can joblessness be the fault of the unemployed? If there is a shortage of jobs it would be cruel to punish those who don’t have them, wouldn’t it?

Conservative politicians revel in the symbolism of attacking the unemployed for their alleged lack of motivation while simultaneously attacking environmentalists for causing a shortage of mines that, allegedly, would solve the shortage of jobs. It’s a simple trick but it’s worked for decades.

Nobody believes that the Adani mine will create the “10,000 jobs” so frequently claimed by Adani and their parliamentary boosters, let alone the “tens of thousands of jobs” our current prime minister said it would create. How can I say that with such confidence? I was in the witness box at the Queensland Land Court the same day that Adani’s own economic expert ridiculed the 10,000 jobs claim. Indeed, in responding to criticism from yours truly, Dr Jerome Fahrer said, under oath,  “[i]t’s not many jobs. We can agree on that … Not many jobs … No argument. Not many jobs.” But while lying to a judge is a crime, many in the mining industry think lying to the public is funny. As soon as the court case was over, Adani and its boosters returned to the “10,000 jobs” claim. We have departed the age of reason and entered the age of truthiness.

The claim that the Adani mine will provide the revenue needed to fund schools and hospitals is even easier to debunk. Leaving aside the fact that the Queensland government gets more revenue from car registrations and parking fines than it does from coal royalties, Adani has secured a “royalty holiday” that means it wouldn’t even have to pay them for its first five years.

And then there’s the bizarre assertion that Australia has an obligation to the world not just to give others the gift of our “clean coal” but also to help people out of “energy poverty” in India. Coal from the Galilee Basin is far higher in ash and sulphur than even coal from the Hunter Valley in New South Wales. Meanwhile, the Indian government has declared that it intends to cease all coal imports in the near future. And of course it’s far cheaper to install renewable energy with batteries in small remote villages, because doing so doesn’t require billions of dollars worth of transmission lines to be built to communities without power. Oh, and if the Abbott and Turnbull governments cared about poverty in other countries, why did they slash our foreign aid budget by billions of dollars?

If power is defined as the ability to speak crap and get away with it, then those pushing Adani’s barrow are powerful indeed. But while the importance of jobs and tax revenues associated with the Adani mine are often exaggerated, it is hard to exaggerate the symbolic importance that the mine now has in Australian politics.

Former leader of the Australian Greens Bob Brown has said the fight over Adani is the biggest and most important environmental battle since the fight to save Tasmania’s wild rivers from the Franklin Dam. Brown’s claim might well be true, but the political fight over Adani is far bigger than an environmental fight, because the subsidies for the mine have come to symbolise the worldview of conservative politicians. 

Western democracies are in the middle of a once-in-a-generation struggle over the role of government in a modern society. Brexit and Trumponomics have both challenged simplistic assertions that right-wing governments like free trade and small government. Here in Australia, the Liberal Party is struggling to explain why it’s okay to spend $65 billion on company tax cuts when the budget is so deep in deficit. And in the middle of all that there is the Coalition’s determination to shovel public money into Adani. 

It wasn’t meant to be like this. Resources Minister Matt Canavan and the rest of his Coalition colleagues went out of their way to pick a symbolic fight about coal. Throwing public money at Adani, throwing public money at coal-fired power stations and literally handing lumps of coal around the parliament are all symbolic acts designed to make clear to the public whose side the government is on and who its opponents are.

Surprisingly, and unlike most things the Turnbull government has tried, the Coalition has succeeded in making its support for coal and its hostility to renewable energy crystal clear. Unsurprisingly, it has completely misread the moods of the business community and the public. Apart from a few shock jocks and paid lobbyists, virtually everyone in the community thinks subsidising the Adani mine is a terrible idea. During the Queensland election campaign, even Pauline Hanson campaigned against giving $1 billion to an Indian  mining company. Just think about that: the Turnbull  government even managed to get the climate sceptics in One Nation to oppose subsidies for a coalmine. And while the ALP has been choosing its words carefully, Bill Shorten can undoubtedly see that the Adani mine is politically toxic. Significantly, Ged Kearney, the new member for the seat of Batman that was once held by Martin Ferguson, expressed even stronger views about Adani than her leader did.

The Adani mine was supposed to be a symbol in the fight between those who want to “develop” Australia and the environmentalists who oppose “development” … whatever that means. Instead it has become a symbol of the hubris and hypocrisy of the last generation of  climate-sceptic fiscal conservatives to fill our parliament. And no matter what happens to the world demand for coal, the Adani mine isn’t going away until they do.

Richard Denniss
Richard Denniss is the chief economist at the Australia Institute.

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