The new Palaszczuk government in Queensland will need to step up to the plate to restore business confidence or risk losing Adani’s interest in the Carmichael coal project, according to free-market think tank the Institute of Public Affairs (IPA).
IPA deputy executive director James Paterson said changes of state and federal government led to radical policy changes, which made Australia a high risk place to do business.
The Courier Mail reported that political risk advisory firm Political Monitor said the Australian Political Risk index had hit an 11 month high of 12.74 in early February.
“With political instability at the federal and state levels, business is currently in limbo. Thousands of jobs and billions of dollars in taxes and royalties are in jeopardy in Queensland as a result,” Paterson said.
Premier-elect Palaszczuk has said the Queensland Labor would not subsidise the Abbot Point port and rail development, and Adani expressed that this would not sway their plans for the Carmichael project.
“The new government is justified in its view that taxpayers should not subsidise private businesses,” Paterson said.
“However, it is more important that the government stops being a handbrake on companies that want to invest in projects which will boost the economy.
“Businesses are very astute and often make reasonable statements understanding the political context.
“They [Adani] didn’t want to say, for example, that because Queensland voters have voted a particular way that they would change their investment policy, and it is always one factor among many.”
Paterson said the dominant factors involved with Adani’s investment were commodity prices and where the Carmichael coal mine would sit on the cost curve.
“But all else being equal, policy settings are important: Adani would be very keen to see the Queensland Labor government changing some of it’s anti-mining, anti-development attitudes,” he said.
“Particularly with things like green tape, the wild rivers laws… making it easier for activists to sue mining companies to tie them up in the courts for years.
“Those are the sorts of things that have a really big impact on whether a mine is worthwhile or not.”
On the federal government’s recent brush with a potential leadership spill, Paterson said a leadership change for the Liberal party would be unsettling for the business community.
“I think a lot of businesses would be alarmed by that initially, but if the new leader promised to continue the broad policy direction that has been set out by the Coalition in its first few years in office, then I think there wouldn’t be too much change,” he said.
“It’s really important that we don’t go back to the days of proposing emissions trading schemes or a carbon tax, or ideas like the mining tax.”
The IPA have been credited with influencing much of the policy adopted by the Abbot government, including abolition of the carbon and mining taxes, abolition of the Department of Climate Change, abolition of the Clean Energy Fund, withdrawal from the Kyoto Protocol, repeal of the renewable energy target, and deregulation of university fees which would make it more difficult for medium to low income Australian students to study for engineering and earth sciences degrees.
Editor's Note: Australian Mining understands that there was no communication between Adani and the IPA in relation to James Paterson's comments.