Even as Malcolm Turnbull and his ministers warn against the rising tide of protectionism, his government is rapidly becoming the most protectionist since the Fraser era, with the way being prepared to hand a $900 million concessional loan to the corrupt, tax-dodging Indian company Adani for its unviable Carmichael coal mine project.
The cheap loan to fund the rail line needed to connect the mine with port facilities would come from the government’s National Party boondoggle fund, the Northern Australia Infrastructure Facility, which lacks even the most basic accountability mechanisms and has minimal staff. There would be no assessment role for Infrastructure Australia, which is expressly designed to assess major infrastructure projects on a national and regional basis, and certainly no role for a body like the Productivity Commission.
Turnbull claims the project will create “tens of thousands of jobs”, which even The Australian pointed out was wrong. The company itself has admitted the mine and rail project would create less than 1500 jobs, while the Queensland Resources Council has suggested 2400 jobs.
Even accepting Turnbull’s fictional claim that 20,000 jobs would be created by the Carmichael project, the loan would amount to a cost of $45,000 per job — three or four times what we used to spend a year keeping automotive workers employed, and with no guarantee of repayment even at the lower interest rate that Adani apparently needs to make the project viable. In reality, the loan is likely to support 1500 jobs at a cost of $600,000 each.
For that amount, it’d be cheaper to give every family in Townsville an interest-free loan of $10,000 and tell them to do what they want with it.
According to Infrastructure Australia, the highest priority infrastructure projects in the country — some of which are funded, some of which are not — are all in urban areas: mostly road and rail projects, and the western Sydney airport. The highest priority initiatives (that is, projects that don’t yet have a business case) are nearly all urban road and rail projects too, many of which will deliver major economic and productivity benefits in terms of reduced travel time in major cities, as well as jobs. One high priority project, the WestConnex project in Sydney, for example, which has received a $1.5 billion grant and a $2 billion loan from the federal government, will, by itself, generate 10,000 construction jobs over a decade before any economic benefits from its operation.
To his credit, Malcolm Turnbull has abandoned the Coalition’s long antipathy toward urban infrastructure investment and is genuinely committed to public transport. But the Adani loan would be straight from an older Coalition playbook — regional, without economic merit, and intended to benefit the fossil fuel industry.
As with most other forms of protectionism, Labor is on board: the Palaszczuk government has bent over backwards to fund and clear hurdles for Adani and supports the loan. But unusually, Bill Shorten, until recently a supporter of the project, has now expressed reservations about it, as has LNP backbencher Bert Van Manen, from the southern Queensland suburban electorate of Forde.
Shorten may have picked up on the extraordinary contrast between a government handing nearly a billion dollars to a foreign company to export coal, and the death of the Great Barrier Reef from warming sea waters. The government may think it is increasing its chances of regaining, and keeping, northern Queensland seats with the loan, but as the death of an Australian icon becomes more apparent, this dodgy loan might end up being a political dead-weight on an already overburdened government.