Opinion: As a coal proponent, here’s what I’ll miss most about Labor

The former Qld Labor government’s budget planning was like the sad story of a family that goes broke within years of winning the lotto. And there’s one key reason, writes Matt Canavan.

Former Labor treasurer Cameron Dick enjoyed a massive stream of coal royalties.

One thing I will miss about the outgoing Queensland Labor government is the promotion that it gave to the Queensland coal industry.

Our state has been blanketed with billboards, signs and YouTube ads saying that coal is paying for this or coal is paying for that.

And our coal industry does provide us with a lot.

The Queensland coal industry employs more than 50,000 people directly, and many more in businesses that service the industry.

Coal royalties raised $10bn last year, by far the biggest single revenue item in the Queensland budget.

While Queensland Labor’s ads were right about the strength of the coal industry, they were misleading about how much it could pay for.

These ads tried to claim that Labor’s increased royalties paid for almost everything under the sun.

Apparently this one change was paying for free kindy, 50c public transport fares, electricity rebates, free school lunches and a variety of infrastructure projects all around the state.

The problem is that the math just did not add up.

Labor’s coal royalty changes only raised more money when coal prices are very high.

After the Ukraine war, coal prices did rise to stratospheric levels, with billions in royalties raked in.

Coal prices have now fallen, however, and while still above average, the coal royalty rivers of gold have dried up.

The rivers of gold were nice while they lasted.

Labor’s cost-of-living measures are now baked in to the budget at a cost of $11bn.

The coal royalty increases are now raising only around $2bn.

And, if coal prices return to average levels, the revenue will be just around $200m.

Queenslanders won the lottery with the recent record surge in coal prices.

Unfortunately, we had a government that spent the winnings many times over on the fiscal equivalent of fast cars, holidays and shopping sprees.
It is like one of those sad stories where the family that wins the lotto is declared bankrupt just years later.

Almost none of this bounty has been invested in ways that will make our state better. We are left with potholed highways, long queues at hospitals and skyrocketing public debt.

When Labor came to office almost a decade ago, Queensland’s public debt was $15,000 per person.

At Labor’s last budget, this debt was due to grow to $28,000 per person.

Queensland debt, on a per person basis, will be even higher than what Victoria’s debt is projected to hit after the high-spending Dan Andrews government.

The biggest economic challenge facing the new LNP government is how to manage the parlous state of the finances left by Labor.

There are no easy choices, but there are some that will impose less pain than others.

The best and easiest way we can get out of this debt pain is to grow the Queensland economy. That will increase our tax revenues (from all sources) without the need to raise tax rates any higher than their punishing levels.

We will also all be better off.

When I speak to businesses the biggest issues they face are escalating costs and suffocation by red tape.

We have missed opportunities because of our anti-business policy settings during this latest commodity price boom.

There have been few expansion projects funded in recent years.

The latest commodity price boom has been the biggest in history.

Post the Ukraine war, our terms of trade reached higher levels than it did after the global financial crisis.

Yet investment in mining has been $60bn lower per year than what it peaked at during that prior, lower-terms-of-trade boom.

We are living off the mines that had been built a decade or more ago.

There have been very few expansion projects funded in recent years.

The Adani project, built despite much opposition from the Queensland Labor government, is an exception.

If we do not start attracting investment soon our current mines will get close to their end of life.

If they do close, thousands of jobs and billions of royalties will be lost.

The promised emergence of a much-hyped hydrogen industry is not happening.

Even green energy entrepreneur Andrew “Twiggy” Forrest has backed off his plans for one.

Governments need to be less about marketing and more about real action to attract investment again to our great state.

Instead of ads and slogans, just show some pride in the hard working men and women who make our state great.

Help businesses solve problems, rather than put hurdles up in their way.

Then maybe in the future coal (and other resources) can fund a lot more needed public services.

Not by jacking up taxes again but by growing the pie so that we can have more tax revenue, more jobs and more wealth for all.

Matt Canavan is an LNP senator for Queensland

Originally published as Opinion: As a coal proponent, here’s what I’ll miss most about Labor