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Newcastle Herald
Newcastle Herald
National

Targeting coal a simplistic response to the complicated issue that is the rising cost of energy

Matt Kean's press conference yesterday.

EVEN in the Hunter - a region that owes much of its prosperity to mining - the coal industry is on the nose with a substantial portion of the population.

So it's easy to imagine, that after promising action on rising power bills, federal Labor saw a hit on the coal industry as one way of looking like it was doing something to help consumers cope with the extra cost of energy.

At a state level, the Albanese government has had a willing accomplice in NSW Treasurer Matt Kean, whose environmental crusading has seen him endorsing ideas that his critics say are closer to the Greens than they are to the free-market fundamentals of the Liberal Party he represents.

At a press conference yesterday to unveil an electric car policy, Mr Kean was peppered with questions about the state's coal reservation policy, which had led BHP to warn that its giant Mount Arthur mine might have to close earlier than expected, with the attendant loss of some 2000 jobs.

On the approximate numbers known, it is difficult to see how the reservation of no more than a tenth of Mount Arthur's export sales could kill the mine, especially given its historic role as supplier to the nearby Bayswater power station.

So it may well be a bluff, with BHP as the nation's biggest industrial company taking the lead for the industry as a whole.

At the same time, however, it looks increasingly as if the policy makers in both governments were ill-advised as to how their intervention would work.

Either that, or they didn't bother to consult with the industry leaders who could have told them the obvious sticking points, which were discussed in some detail on Monday with Deputy Premier Paul Toole, who met with the industry, apparently in place of Mr Kean.

At his press conference yesterday, Mr Kean answered virtually every question about the reservation policy with a rehearsed suite of lines about a "not unreasonable" impost on coal companies making "super profits" from "Putin's war".

If only it were so simple.

In pushing to constrict the industry while coal is still a much-needed commodity, lawmakers have created a market in permanent short supply.

Prices have risen in response, in textbook fashion, filling government coffers along the way, with record tax and royalty takes. In this light, the coal industry is not the demon, but the goose that lays the golden eggs.

ISSUE: 39,819

Surface works at BHP's Mount Arthur coalmine, which the company said may have to close earlier than scheduled if the state goes ahead with its coal reservation policy. Picture from BHP

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