The political cost of backing Adani
he Adani coal mine is the most divisive resource project since the proposal to dam Tasmania's Franklin River in 1983. The debate over whether to subsidise it even more so. But thanks to Annastasia Palaszczuk's last-minute decision to veto any Commonwealth loan to the project, the voters of Queensland are now being offered a full range of policy positions regarding the project.
[First published by the Australian Financial Review - here]
The two extreme positions are held by the LNP and the Greens. The LNP supports not just the project but the provision of state and federal government subsidies while the Greens oppose both the project as well as the state and federal subsidies. The ALP and One Nation are both somewhere in the middle. The ALP supports the project and its own state government subsidies but now opposes the federal subsidies while One Nation supports the project, opposes the federal subsidies and wants more transparency regarding the promised state government subsidies.
While the diversity of options being presented to Queensland voters is broad, some of the options on offer are as confused as they are contradictory. Take the LNP for example. The party that was once the nation's loudest booster for small government has become the only party to unquestioningly support both state and federal subsidies and oppose transparency of that support. The federal Coalition rhetorically dabbled with the idea of pretending that concessional loans were not a form of subsidy but both the Productivity Commission, and Resource Minister Canavan cruelled that strategy by boldly embracing the term "subsidy". Bully for them. We need more straight talk in Australian public debate.
The simplest explanation
Much has been written about the Queensland Premier's change of heart over her willingness to pass on federal government money for the Adani railway line but the simplest explanation is also the most plausible: the vast majority of voters think giving $1 billion to an Indian company to build a railway line to a coal mine in far north Queensland is a bad idea and continued support could have cost her seats.
While Palaszczuk's explanation of her partial backflip on subsidies for Adani made little sense, her political strategy makes perfect sense. Put simply there are far more votes, and seats, up for grabs in and around the major population centres than there are votes that hinge on a rail way line 400 kilometres inland from Mackay.
The LNP position is far more complicated. Federal minister Canavan and his state counterparts in the LNP have worked hard to depict the Adani coal project as a totemic battle between "builders and blockers"; between those that want to grow the state and those that want to stop all development. But while the symbolism might play well, the fact is that voters of all stripes actually care about what is getting built. And voters of all stripes realise that $1 billion spent on one project in the Galilee Basin is $1 billion that's not spent on something closer to home.
Symbols matter in politics, but results matter even more. And nothing matters more to politicians than election results. The federal National Party have made the Adani mine their cause celebre in north Queensland and there is little chance that doing so will cost them any seats in the bush, if only because most of their voters don't care much one way or the other.
But the vast majority of the million new people that move to Australia every four years don't live in the bush. The federal Nationals have proven they have enough power over Malcolm Turnbull to drive the Coalition into supporting subsidies for projects like Adani, or the $10 billion inland rail line they won in exchange for supporting Sydney's second airport. But they don't have the power to make the vast majority of voters in the vast majority of seats think that such spending is a good idea.
While the symbolic value of winning one or two regional seats may play well to the sometimes contradictory Liberal-National Coalition, the Queensland ALP is targeting richer electoral pastures. On the most divisive issue of the campaign, it is Palaszczuk who is heeding John Howard's advice that "politics is governed by the iron law of arithmetic".
Richard Denniss is the chief economist for The Australia Institute @RDNS_TAI