QRC - Another day, another bogus report from left field

THE AUSTRALIA Institute has outdone itself with an economic analysis of the Queensland resources sector that would embarrass the North Korean government.

‘TAI has produced some howlers in the past but today’s effort takes the cake,’ said Queensland Resources Council Chief Executive Michael Roche.

‘The report details all manner of state government business expenditure but completely ignores the other side of the balance sheet.

‘Almost every capital project undertaken by government-owned businesses for resources sector power supply and distribution, water, rail and port capacity gets a headline.

‘Studiously and fraudulently avoided is acknowledgement that these projects were executed on a fully commercial basis, with resources companies entering into commercial contracts that underwrote the capital expenditure and provided commercial returns to government-owned businesses.

‘Not only were these projects undertaken at no cost or risk to taxpayers but their commercial returns were served up as government-owned business dividends in successive state budgets.’ 

In 2009-10 the then QR National coal freight business reported earnings before interest and tax (EBIT) of $224 million. The associated coal network (track) business reported an EBIT of $277 million, with a dividend to the Queensland Government of $215 million.

A search of the document for the word ‘dividend’ will produce a nil return.

Mr Roche said the TIA report was remarkable for turning out an instant collection of howlers such as:

• A barge landing at Aurukun (there is no mine at Aurukun).
• The capital cost of expanding the Meandu coal mine (supplying Tarong Power Station) is being recovered through electricity charges. The government owns the mine and the power station.
• Rail infrastructure concessions totalling more than $1 billion over 2012-13 and 2013-14 were not for the benefit of resources companies (who pay full commercial rates for track use and freight services) but essentially a budget subsidy for passenger transport and unprofitable regional freight services.

‘Virtually the only accurate account of state government expenditure is that by the Mines Department, which is tiny compared with the royalties returned to the state government each year,’ Mr Roche said.

‘The current State Budget forecasts that royalties of worth some $15 billion will be collected from the Queensland resources sector over the next four years, but that’s only part of the equation.

‘Last financial year, resources sector companies spent almost $38 billion in Queensland on wages, goods and services and communities.

‘That direct spending injection is calculated to have generated total spending of $76 billion – one quarter of the state’s economy.’

Mr Roche said the latest TAI report comes as no surprise, given that the organisation’s executive director is a founding member of the anti-coal and gas movement trying to shut down Queensland’s leading export industries.

‘TAI is a sausage machine for reports that deliver the same answer every time, regardless of the question,’ Mr Roche said.

 

www.qrc.org.au

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