Fossil fuels have been integral to the standard of living and civilisation that we enjoy today. This isn’t just because they generate most of our electric power, but because they are also intimately involved in our steel, fertiliser and plastics industries, as well as being the only form of energy suitable for a number of industrial processes.
Despite this Green/Left politicians want to close gas and coal extraction down, even though replacements, including for power generation, do not exist.
This paper by Gene Tunny of Adept Economics looks at the cost to the Queensland worker as well as the Queensland government of closing the coal and gas industries. To download click here.
The paper was launched at a lunch and you can view the presentation and a moderated discussion between Gene Tunny, Mick McCormack (chair of Central Petroleum) and Nick Jorss (Executive Chair of Bowen Coking Coal) by clicking here.
Key findings of the paper are:
- The Queensland state budget would be in tatters with net debt $9 billion or 25% higher than projected at present and budget deficits 6 times larger. This translates to cumulative deficits of -$10.802 billion and cumulative fiscal deficits of -$29.271 billion resulting in net debt of -$48.242 billion and gross debt of -$89.65 billion.
- Decrease in direct and indirect Gross State Product of 9% (direct) to 20% (indirect) at last year’s prices, but much more than this at this year’s prices.
- An increase in statewide unemployment as high as 12.4% compared to June’s 5.2%. Unemployment in the federal seats of Flynn and Dawson centred on Rockhampton, Mackay and Bowen of up to 42%.
- Decrease in the incomes of workers of $1.7 billion per annum, with a corresponding decrease in payroll tax to the state government of $630 million pa.
- Capital stock valued at $193 billion would need to be written-off.
- Permanent reduction in Gross State Product of 7.3% or $27 billion.
- Loss of most of the income from government-owned power utilities which are estimated to be ~$500 million in 2022-23 rising to over $700 million in 23-24.
To put some of these figures into perspective, it cost around $1.8 billion to build the Gold Coast hospital, and the increase in cumulative deficits would fund 5 of them.
A school costs around $80 million. The increase in deficits would fund 120 new ones.
At $5 million per lane kilometre, the cumulative increase in deficits would fund 900 kilometres (roughly the distance between Brisbane and Mackay) of new dual carriage way road.
In the 2023 budget year the revenue foregone from royalties alone would amount to a third of the “Public order and safety budget” (police).
Rather than abolishing the fossil fuel industry Queensland should be taking the surpluses and investing for the future, knowing that in the short-term coal and gas are still vital commodities for life and economic health.