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QRC publishes research to quash ‘flawed’ TAI coal report

9th December 2016

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

  

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PERTH (miningweekly.com) – The resources sector has countermanded think tank The Australian Institute’s (TAI’s) data on the importance of coal mining to the Queensland economy, saying the research is based on “unfounded assumptions” and that it “discounted critical economic impacts”.

The TAI in September released a report claiming that Australia’s economic growth would be barely affected by a moratorium on new coal mines, with a difference in gross domestic product in 2040 of 0.6% between the two modelled scenarios – that of business as usual wherein no moratorium is imposed, and a scenario where the moratorium goes ahead as proposed.

In its report, the TAI noted that the coal industry employed less than 0.4% of the Australian workforce and its royalties contributed just 2% of revenue to the New South Wales and Queensland budgets.

While the TAI conceded that coal exports made up a large portion of Australian exports, some 12% in 2015, it stated that overall export values were not projected to differ significantly as a result of introducing a moratorium on new coal mines, with the green think tank saying there was an estimated reduction of around 1% expected in the final years of the analysis period.

As for the Queensland economy, the TAI claimed that the state’s bottom line would not be affected at all in the short term and would be barely affected in the medium- to long-term if coal mining ended.

The Queensland Resources Council (QRC) CEO Ian Macfarlane said on Friday that a review of the TAI’s report by Cadence Economics found that the research was flawed.

The Cadence report concluded that the TAI’s entire paper was based on “unexplained and unrealistic assumptions” regarding employment, and significantly underestimated the net number of coal jobs that would be lost from ending the coal industry.

While the TAI claimed job losses would only be around 1 400, Cadence Economics estimated that job losses would be between 20 000 and 40 000 across Australia.

Further, Cadence said that the impact of a coal moratorium on the Queensland economy would be “catastrophic”, resulting in some A$3.8-billion in lost mining royalties and a further A$72-billion total loss to the state’s economy.

“These quasi-economic reports will only denigrate the natural resource sector’s ability to provide jobs in communities and royalties that pay for nurses, police and teachers,” said Macfarlane.

“The authors of the TAI report appear to have no understanding of economics and the figures put forward seem to be borne out of the 'Centre for Creative Accountants'. This report is yet another example of anti-coal activists holding back the economic prosperity of Queensland.”

Macfarlane also pointed out that TAI had used a picture of a Western Australian gold mine on the front cover of the report, which shows “how much they know about the industry”.

Edited by Mariaan Webb
Creamer Media Senior Deputy Editor Online

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