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ABC RN Breakfast

23 May 2017

Hamish Macdonald

Subject: Adani Carmichael Mine; Queensland Government royalties stoush; One Nation recordings controversy


HAMISH MACDONALD: The $21 billion Adani coal mine has been plunged into fresh uncertainty this morning. The Indian company has deferred a final investment decision on whether to proceed with the project until the Palaszczuk Government, the Labor Government in Queensland can sort out an internal brawl over royalty payments.

Matt Canavan is a Queensland Senator and the Federal Minister for Resources. He joins us from our Parliament studio. Good morning to you Minister.

MINISTER CANAVAN: Morning Hamish. How are you?

HAMISH MACDONALD: Very well thank you. Adani has now indefinitely postponed its final decision whether to proceed with the Carmichael Mine. Is the mine in serious jeopardy as you understand it? What are you hearing from Adani?

MINISTER CANAVAN: Well there's a serious question mark over it now that wasn't there a week ago. I think it's a remarkable and embarrassing situation for Queensland that they don't even have a tax regime in place. This project has been under consideration for nearly seven years now. The Palaszczuk Government has been in power for more than two years, and at the eleventh hour, to not even be able to tell Adani what tax they will pay less than a week before they were going to take it to their board is just unbelievable.

It's a shocking condemnation of the chaos that exists within the Palaszczuk Government. They are riven by in-fighting which is putting at risk thousands of jobs and investment in Queensland, desperately needed jobs in North Queensland. The unemployment rate in Townsville is 11.3 per cent at the moment. People there are just exasperated, including the mayors of North Queensland who travelled to India with Annastacia Palaszczuk only a couple of months ago. Some mayors – like Jenny Hill who is actually a member of the Labor Party or has been – are just pulling their hair out over what the hell is happening in Brisbane and why can't they get their act together.

HAMISH MACDONALD: Why should Australian taxpayers give Adani $300 million worth of concessions?

MINISTER CANAVAN: This is how absurd the situation is though Hamish. That figure you just quoted is from leaks and innuendo. Nothing has been announced or described.

HAMISH MACDONALD: Let's park the figure. We know this whole decision revolves around giving them a royalty holiday, as it's termed. Why should the taxpayer do that?

MINISTER CANAVAN: I reject that as well Hamish. I mean Adani themselves, I don't want to speak for them, but they are pulling their hair out so to speak too because they don't know the situation.

HAMISH MACDONALD: So you understand that Adani would go ahead with this regardless of whether there's a royalty concession?

MINISTER CANAVAN: Well, I think the key thing is what the terms of that are. I mean I'm not the Queensland Government Minister so I don't understand their royalty regime and I'm not in charge of it, I can't make decisions or judgments on it. But on a regular basis, Commonwealth Government departments will get lease incentives, they'll get free periods when they go into a new building. Commercial operators provide that all the time to the private and public sector.

Now we're going into a new coal basin here. It will be the first opened up in Australia for nearly 50 years. If you like, Adani are the first tenant to get in to there. So of course there's going to be discussions about how we can make that happen. It's happened in the past we've when opened up new coal basins. The Premier says she wants to put in place a consistent royalty regime to attract investment in minerals and coal in Queensland. That's great, but why isn't it in place? They've been in Government for more than two years.

HAMISH MACDONALD: But I'm just trying to understand whether you think Adani will do this regardless of whether they get that?

MINISTER CANAVAN: Well, look, I don't know. I haven't been involved in those discussions Hamish. I'm not the Queensland Government Minister. That's a matter for the Queensland Government.

HAMISH MACDONALD: But hang on, a couple of minutes ago you were denying that this was even an issue.

MINISTER CANAVAN: No, I said I don't know, we don't know, what the issue is, because the Queensland Government has said nothing about it. All we're relying on, and you and the rest of the media is relying on, is leaks that are unconfirmed, demonstrating the complete chaos that exists within the Queensland Labor Government. They seem more interested in protecting their own jobs, particularly their inner-city members in West End, than the jobs of North Queenslanders at the moment.

Only a few months ago, Annastacia Palaszczuk was standing next to Mr Adani in Townsville lauding the project, supporting it. She went over to India a few months later when these matters about royalties, my understanding is, were discussed. But now they can't even give them a decision or clarity over what the Queensland Government's policy is. Well, if they can't come up with a policy, Annastacia Palaszczuk needs to go and needs to go to an election to give the Queensland people a chance to elect a government that actually do have a plan to develop jobs for Queensland.

HAMISH MACDONALD: Let's try to move beyond the politics to the substance though. You are a local member in that region. Is it your view that taxpayers in Queensland should be giving this mine significant tax breaks in order to get the project up and running? Are you willing to make that argument or not?

MINISTER CANAVAN: I just don't understand quite the characterization of this that somehow they would be getting tax breaks so to speak. I mean the facts are …

HAMISH MACDONALD: Well there's a royalty holiday, let's call it that.

MINISTER CANAVAN: Well, again, that's not my understanding of the arrangement. My understanding is that it will be a ramp-up and the royalties will be the same paid over the life of the project. But be that as it may. I don't have all the full details.

HAMISH MACDONALD: So you do have some of them? What are they?

MINISTER CANAVAN: Well, I can't confirm or deny the details. I've heard different discussions from different people in the last few days. This is how absurd the situation is, that the Queensland Government can't tell people what exactly the situation would be for Queensland, a week out from Adani making a decision. This is an embarrassment for our country and an indictment on the Queensland Government.

HAMISH MACDONALD: But it is a little surprising that the Federal Minister for Resources doesn't have this sort of detail, and as you say, it’s a week out from the project.

MINISTER CANAVAN: It's not a matter for the Federal Government Hamish.

HAMISH MACDONALD: But don't you talk to the Queensland Government?

MINISTER CANAVAN: Of course, of course we do but they haven't shared those details with me. And that's a matter for them, so I will let them explain the situation. But the situation is, Hamish, when the Adani mine, if it were to get going and produce 25 million tonnes of coal per annum, that's its first stage, it would pay about $100 to $150 million a year in royalties to the Queensland Government, depending on the price of coal of course. So even if those figures you've quoted from the media are true, we're talking about less than three years of royalties for a mine that will last for 60 years. So over those 57 years, if that's the case, you're looking at about $6 billion for the Queensland people.

Now of course if the mine is not developed, we don't get that $6 billion. That's $6 billion less than we can spend on schools and hospitals and other things that we need in Queensland, and, of course, we miss out on the thousands of jobs that this would provide, particularly in areas that desperately need employment and jobs.

HAMISH MACDONALD: If the coal mine project is worth $21 billion and as you point out there are substantial benefits to be gained from the Queensland community, and we now know that Adani has sort of parked its decision pending some news and information from the Queensland Government, if the whole project is contingent on royalty holidays or some kind of concession potentially in the hundreds of millions of dollars – around $300 million is the figure that we know of and as you say you don't know that for certain – but if it's a $21 billion project, yet contingent on that kind of concession, is it even a viable project in the longer term?

MINISTER CANAVAN: Well I mean that's a matter for Adani, obviously, whether they want to make the investment.

HAMISH MACDONALD: It's a matter for us as well as taxpayers, if we are going to give them a break.

MINISTER CANAVAN: Well, again, Hamish, if the mine's not developed, we're not giving them anything of course, because we won't have any royalties. I mean this is the absolute hypocrisy and inconsistency of those who are opposed to this mine, that somehow they want to say that you are giving a concession by not taxing somebody, and on the other hand they don't want the Galilee Basin at all. That's the position of those that are particularly saying that this is a tax break and a concession. They don't want to develop the Galilee Basin at all. They think it's not something we should do and that's their right. But then of course, we're not getting any royalties. So we're giving a $6 billion concession away, to in my view, not go into an area which would be of great benefit to our country, which is a perfect place for a coal mine because it's a long way from the Great Barrier Reef and it's an area where there is no intensive cropping. It's the best place we could think of to build a coal mine in this country, and it would potentially create thousands of jobs and make lots of export revenues and royalties and taxes for our country. And that's very important.

Now, whether or not the project stacks up, of course it's a venture that's risky because it's in a new area, it’s in a new coal basin, and I'm sure when Adani go and sit down and think about where they're going to spend $21 billion over 60 years, they take a lot of factors into account. It would be obviously a decision that is finally balanced given the costs and benefits of doing so and the risks of putting $21 billion dollars of capital at play. I mean these are our resources, Hamish. These are the people of Queensland's resource, that coal, and we should be looking to develop it in a business and commercial way. And, as I say, a commercial operator of a new office complex would clearly think about giving rent-free periods or something to attract people in. And we should be doing the same in Queensland, we should have a commercial approach. But at the moment, we have no approach, because we have no plan from the Queensland Government.

HAMISH MACDONALD: We've got that point. You've made a couple of times. Your fellow Queensland Senator Pauline Hanson and her chief of staff James Ashby are embroiled in this scandal to allegedly skim off money from taxpayers at the next state election. Do you think they have adequately explained themselves? Do you accept that this was just brainstorming and that the suggestion was never adopted?

MINISTER CANAVAN: I'm very concerned that their stories are all at sea here. They're all over the place. On the one hand, you have the leader of the party, Senator Hanson, saying that this idea, this brainstorming idea, was apparently immediately dismissed. But on the other hand, we actually have, apparently, a recorded tape, which I'll say I haven't listened to, but from the reports, a two-hour long tape where no such dismissal was recorded.

So, I think they need to explain themselves very clearly to the Australian people. One Nation like to present themselves as some pure and clean force in Australian politics. But I think the more and more you see, they are just another political party. They have people in it that seem to be out for their own gain and not for the interests of the Queensland or Australian people and they need to be held accountable now for these revelations because they're very concerning.

HAMISH MACDONALD: Matt Canavan, we'll leave it there. Appreciate your time this morning. Thank you.