The Coal Curse Judith Brett

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Feature: The Coal Curse Cover, Judith Brett, Quarterly Essay #78, 2020

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The Coal Curse Judith Brett, June 2020

Judith Brett The Coal Curse: Resources, climate & Australia’s future, Quarterly Essay 78, 2020. The Coal Curse is the following Quarterly Essay to Cry Me a River by Margaret Simons which I used to give a 2020 update to my essay on the Murray-Darling Catastrophe. I am using The Coal Curse by Judith Brett in a different way.

It is not my intention to summarise Judith Brett’s essay but more to highlight the salient issues and to focus on a couple of the corespondent’s responses to the essay in the following Quarterly Essay 79. I gave a general background to the Quarterly Essay and Black Inc. in the 2020 update, if you are interested.


Preamble

The Coal Curse Judith Brett’s Essay

Introduction

Judith Brett is emeritus professor of politics at La Trobe University in the essay she says:

I am a historian, so I look for explanations not just in the perfidies of the present, but in the decisions and events of the past. … This essay is about the history of Australia as a commodity-exporting nation and its political consequences. Economic history is unfashionable nowadays… Economic history is dry and hard to narrativise. But how a country makes its living can explain a lot.


Resource Cursed

Judith Brett says:

In 2018-19, Australia’s top exports were iron ore, coal, natural gas, international education and tourism in that order. Coal became our top-earning export commodity in the mid-1980s and has been at number one or number two ever since, vying with iron ore, which needs metallurgical coal to be transformed into steel. The production of LNG has increased rapidly over the past decade … and it is now our third-largest commodity export and rising fast. Between 2018-19 and the previous financial year, its export value grew by 60.9 per cent. Coal, LNG, iron ore: in 2018-19 these three earned 41.8 per cent of our export income.

This is why Morrison [Australia’s current Prime Minister] brought a lump of lacquered coal into parliament in February 2017. “Don’t be afraid don’t be scared, it won’t hurt you,” … The point was to ridicule the Opposition’s support for renewable energy, and it was a stupid stunt. But it put on full display how impossible it was for many of our political leaders to imagine Australia’s future without fossil fuels.


Politics Since 1996

Jump forward to today. Judith Brett finished her essay after the start of Covid-19. The Morrison Liberal Coalition Government appears to have abandoned coal (the coal price for thermal coal (electricity) has plummeted and several major mines are closing). Yet, they have come out with an energy policy that supports gas over renewables (still no plan for energy or for reducing carbon emissions). Coal is dead but they cannot bring themselves to abandon the fossil fuel industry. Even though this is inevitable.

The Coal Curse, Judith Brett, Quarterly Essay, #78, 2020 Cover

I’ve despaired over government policy in the national interest ever since John Howard (Liberal) gained power in 1996. Howard was an experienced and cunning politician, a neoliberal, who apparently had a vision of a halcyon Australia in the 1950s. He put much of his energies into turning back progress, introduced Orwellian namings (e.g. Fair Pay Commission, Future Fund etc.) and spin rather than content.

In this he was a sign of the times and in step with Tony Blair in the UK and George W Bush in the USA. Both of the latter may actually have believed in WMD (weapons of mass destruction) Howard never did. Howard was good at winning, at wedging the opposition, good at lying, and good at cowing the civil service and journalism. He did immense harm to Australia.

And, when Howard lost power (including his seat) in 2007, he introduced changes to superannuation and capital gains (with negative gearing) in his last year in office that later governments have found impossible to wind back.

Government after John Howard has been a shambles, particularly the latter half of Kevin Rudd’s first term (Labor) and Tony Abbott (Liberal).

Although Kevin Rudd did introduce a stimulus package in response to the GFC (global financial crisis) that preserved Australia’s prosperity. Until, the recession brought about by Covid-19, Australia has had 30 years of growth and prosperity based heavily on the sale of mineral commodities, but which most economists also attribute to the economic reforms of the Hawke/Keating government 1983 to 1996.

The Federal Government saved no money throughout this boom for future bad times — in marked contrast, for example,  to Norway’s oil revenue fund the world’s largest sovereign wealth fund. (The Australian government did set up an Orwellian named the Future Fund under John Howard, but most Australian’s didn’t know that it should have been entitled the unfunded superannuation liabilities fund for public servants and military personnel, and that the funds for other purposes are relatively minor in terms of sovereign wealth.)


Background to the Economic History of Australia

I was a little shocked at myself in my article on the Murray Darling Catastrophe when I quoted the SA Royal Commission: Pioneering was not always splendid and praiseworthy. This was demeaning a sacred cow.

I was too young when The Lucky Country by Donald Horn was published in 1964 to read it or understand it. The book was mentioned frequently when I was growing up and I always thought it was in praise of Australia. The lucky country that was young, free and innovative — the best in the world at almost everything. We were indoctrinated with the brilliance of Australian agriculture. (Unlike agriculture, CSIRO in agricultural research was actually world class at the time.)

In recent years, I get grumpy and boring when anyone ever says that Australia is the best in the world at anything, because it is nearly always untrue and it stifles thought or debate on how we might improve.

When I criticise Australia here, I am talking about governments, the corporate sector and to a lesser extent policy advisors, because what continually amazes me is when one looks deeper into Australia at the smaller enterprise level, innovation and creativity have not been stifled by lack of support from above.

The Lucky Country 1964 was actually an indictment of protectionism and tariffs not praise for the country.

Judith Brett in the bulk of her essay provides a deep survey of Australian economic history from wool (riding on the sheep’s back) to mineral exports. In the 1950s:

Fortuitously, for Australia, as wool was in freefall, the export of minerals began to rise, spurred by post-war demand for uranium and the new metals of aluminium, tungsten and titanium.

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