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20 APR, 10:06 AM
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Imagine this. You’re a State Government minister. Your department and the
most powerful industry it regulates are under fire for failing to comply with
your government’s own guidelines.
Courts, the media and community groups keep
complaining that the industry breaks the guidelines and your department lets
them get away with it.
Even the consultants you commission to write an
“independent” review end up saying that the industry is acting “in a
manner that is inconsistent with well-established principles and the NSW
Government’s November 2012 Guideline.”
What do you do in this situation? You could instil
some discipline in your department. You could crack down on the rogue industry…
…or you could change the guidelines.
MORE FROM ROD CAMPBELL
This is what former NSW Planning Minister Pru
Goward did.
The NSW coal industry and their legions of economic
consultants were writing reports that were “simply not credible” according to the Planning Assessment
Commission.
The Commission found that Goward’s department had a
“staggering” inability to see the flaws in some of the coal industry’s economic
reports.
But rather than spilling blood in her department
or, heaven forbid, taking on the coal industry, Goward told her department to
go away and write new guidelines.
The problem was that as the coal boom winds down
and prices decline, the economic claims in the miners’ assessments just don’t
stack up anymore. Justifying mining’s impact on other industries, communities
and the environment with promises of jobs and money was getting harder and
harder.
For example, the Cobbora coal project near Dunedoo
promised Planning that it would deliver a net economic benefit of $2 billion
dollars and over 3,000 jobs to offset the damage it has caused to the local
farming economy.
But late last year the government had to admit that the project wouldn’t be
developed because it simply isn’t viable.
Even the Planning Assessment Commission is starting
to catch on – it rejected the Coalpac mine near Lithgow,
finding extraction of that coal would have “limited economic and social benefit”.
With coal mines being rejected on the basis of
economics, Planning and the miners either needed to change the coal market or
change economics.
It’s much easier to change economics – or at least
to water down the economic assessment guidelines.
So in June last year, Goward and her department
decided that “we need an improved [economic] framework…for more robust
assessment.”
To come up with new economic assessment guidelines,
who do you think Goward and her planners consulted with? Economists? Academics?
The public?
Of course not. They went straight to mining
companies, their consultants and the NSW Minerals Council. To date, the mining
industry is the only group outside the government to have input into the new
guidelines.
Just to make this clear – the mining industry is
writing its own rules in NSW.
Not only has the public had no chance to comment on
the new guidelines, we’re not even supposed to know they’re being developed.
This had all been done in secret until consultants
to Centennial Coal’s Airly mine just couldn’t wait to show off their new rules.
They were tired of the “expected orthodoxy” of actually having to
prove that a mine was going to be viable and of benefit to the state. They
laughed off criticism of their inability to comply with existing guidelines, saying:
The fact that the
Department of Planning and Environment is now developing [new] guidelines …
demonstrates that different approaches are relevant.
The new guidelines will “avoid those parts of orthodox
practice that largely serve to detract from the ability of ‘lay’ stakeholders
to comprehend the analysis presented”.
In other words, the suckers – ahem – lay
stakeholders will be given some “lay economics” that they can understand – big
jobs claims without any pesky orthodox calculations backing them up.
But while orthodox economics is being sidelined, no
one is suggesting that mine plans be based on “lay geology”. The coal rail
proposals are still based on very orthodox engineering.
Fortunately there is a new Planning Minister at
Macquarie Street.
Rob Stokes has an opportunity to reverse Goward’s
capitulation to her department and the coal industry. He can restate NSW
government support for the existing guidelines based on text-book economics and
Treasury advice.
He can also commit to involving the public when
changing policy.
Imagine that. A Planning Minister not beholden to
the coal industry. It’s not so hard to imagine, is it?
Rod Campbell is the Director of
Research at The Australia Institute.
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