Who will save us from the ETS?

A MIND boggling aspect of Australian politics is how the climate warming hoax has resulted in a refusal by so many to confront harsh realities.

A long-time State Scene contact recently drew my attention to the following points highlighted in the June 2009 Minerals Council of Australia submission to the Senate Economics Committee that inquired into the impact of the Rudd Government’s Carbon Pollution Reduction Scheme Bill upon mining.

He said: “Look at page one of the submission, which says that independent modelling showed projected thermal coal output will fall 27 per cent by 2020.

“On top of that production of coking coal will fall by 12 per cent, and what are called non-ferrous metals (gold, copper, lead and nickel) output will also fall by 27 per cent.

“Brown coal production will fall by 41 per cent.”

He then turned to page three of the MCA submission, which shows the CPRS will cost Australia’s mining industry an estimated $9 billion in the first five years [2010-15], and $25 billion over the first 10 years [2010-20].

“Those,” he said, “are costs none of our international competitors will bear.”

Or as one Liberal MP recently said: “I attended a renewable energy forum in Beijing last week.

“Very interesting – China, Japan and South Korea are all committed to renewable energy but saw many problems with an Emissions Trading Scheme.

“So if our regional trading partners aren’t going down the ETS pathway, who will we trade with if the Rudd/Wong scheme gets up?”

Let’s be blunt.

These are depression -ized output cuts, the type Australian industry endured during the stagnating 1930s.

And those responsible for them are Kevin Rudd and Malcolm Turnbull, and their yes-men and yes-women camp followers.

Interestingly, Mr Turnbull believes he can become a Rudd climate warming ally but avoid such outcomes by putting forward a few difficult to comprehend amendments that allegedly trim the CPRS’s penalties.

The Turnbull amendments to Rudd carbon taxing are vague and quite imprecise.

For instance he has a policy that reads: “The Coalition will negotiate for a national ‘white certificate’ energy efficiency scheme so households and businesses earn credits for efficiency measures, and contribute to reducing national emissions.”

What precisely are “white certificates?”

Like the entire ETS program this will mean thousands more bureaucrats who will be backed-up by emissions accountants, auditors and lawyers counting, tabulating, and reporting on measures households and companies take to acquire discounts and concessions to their carbon tax bills.

Such moves mean we’re seeing the birth of a truly horrendous bureaucratic nightmare.

Huge benefits flow to Queensland and NSW from the mining and export of thermal coal, which now faces a bleak declining production future.

That’s not very different from what Zimbabwe’s President Robert Mugabe has done to his country’s once highly productive agricultural sector.

Queensland’s and NSW’s state economies can thus face torrid times.

There will firstly be steady revenue declines in state budgets from their respective coal sectors.

Jobs will slowly vanish during 2010-20.

Expansion that may have been planned won’t eventuate. Companies will not re-invest. Why should they?

And all industries supplying the two coal sectors will inevitably feel commensurate shrinkages.

That means engineering support and supply companies, transport firms, including railroad operators, down to retail outlets in the various towns dependent on coal mining will move into reverse.

If we move out of Queensland and NSW to head southwards over the border into Victoria where brown coal deposits are located in the Latrobe Valley east of Melbourne, a 41 per cent cut in production is coming from 2010 until 2020.

Those working in that valley are therefore in for an even bigger slump, one that’s 35 per cent larger than awaits Queensland and NSW.

Australia’s east coast coal mining sector is inevitably heading for what can only be described as a man-made depression and no-one except Family First Senator Steve Fielding, the National Party and two handfuls of Liberal MPs are upset about this.

Not one Labor MP has had the courage to speak out for working families.

Name one Australian premier who hasn’t been sitting on his or her hands and saying nothing.

Since WA isn’t a coal exporter of any significance the 27 per cent output cut between 2010 and 2020 mainly impacts upon three eastern states.

But if one looks more closely at the MCA’s submission you see that both the gold and nickel industries – two sizeable employers in the state’s Goldfields – face a similar fate; a 27 per cent drop in production.

From next year to 2020 crucial towns like Kalgoorlie, Norseman and centres as far north as Wiluna will feel the pinch of a drop-off of about one third.

That’s what economists call a sectoral depression or slump. Forget having your eyes on a Goldfields mining career.

The problem with such depressions is they tend to be localised, meaning they hit hardest in a particular region. In this case WA’s Goldfields.

But the impact will also chain react into the state’s major heavy industrial area – the Kwinana ‘strip’ where so much back-up and support engineering work is undertaken.

That means the southern suburbs housing so many workers employed on the ‘strip’ will slowly feel orders withering away.

It also means WA’s royalties from gold and nickel output will stagnate, perhaps slide; so fewer dollars for the Royalties for Regions program the Nationals have been so heavily promoting.

And fewer dollars for the Barnett government for education and health, its two biggest outlays.

And that’s only due to the collapse in two mineral sectors – gold and nickel. Others will also feel the pinch.

Another way workers will feel the impact is in their superannuation since those funds will need to shift their investment focus to less rewarding sectors.

It’s highly unlikely such funds do not presently have many billions of dollars invested into the coal, gold and nickel mining and associated sectors.

Something akin to recession returns will therefore begin creeping into their books.

For those who recall the impact of the 2007-08 global financial crisis on superannuation, the future will be something like that even if the impact won’t be felt as suddenly.

And other extractive industries, including gas, will, to varying degrees, also feel the pinch of Canberra’s CPRS Bill.

Caltex Australia has already warned that both its east coast oil refineries face the prospect of closure.

The one who, apart from State Scene’s contact, best describes the dismal fate we now face is Henry Ergas, formerly head of the Canberra-based think tank, Concept Economies.

In an article in Quadrant magazine, titled: ‘The Fate of Progress at a Time of Crisis’, he says Australians shouldn’t take the benefits that have for so long flowed from extracting the continent’s mineral resources.

“Nowhere is the danger [of doing that] greater than in Australia,” Mr Ergas wrote.

“Time and again we have squandered in foolish choices the enormous good fortune of good location and resource endowment that nature has bestowed on us.

“Successive resource booms have saved us: in Gordon Barton’s famous phrase, like an idiot who keeps winning the lottery.

“But sooner or later, the idiot comes to believe that his wealth results not from luck but from the brilliance in choosing the right ticket – and opts for policies such as the ETS ...”

The coming decade – covering the life of three federal parliaments – is set to reveal in a stark manner just who the “idiots” are: either the ETS’s proponents or opponents.

There’s not long to wait.