Bill Shorten’s leap to the left does party no favours in the Queensland heartland
Jenny Hill knows the leafy electorate of Batman like the back of her hand: the daughter of Maltese migrants, she was baptised in the Catholic church on Rossmoyne Street and laughs at how the nuns kicked her brother out of the local primary school. The pub around the corner was so rough the family packed up and moved. Their dad thought the area would never change.
The funny thing is, her adopted home of Townsville is much more like the gritty stomping ground of her childhood than what Thornbury, Northcote and the desirable addresses of Batman have become — a gentrified reach of inner Melbourne’s quinoa corridor, lined with cafes and homes with sevenfigure price tags.
“It was a very different neighbourhood to what it is now,” Hill says. “When I was growing up, that part of Melbourne was all working-class, strongly Labor. These days, those are the sort of people who live in places like Townsville.”
As mayor of the hardscrabble north Queensland city and a cardcarrying member of the ALP, Hill is locked in what she sees as a struggle for the life and soul of her community, as well as the values of the Labor movement at large.
The flashpoint is the Adani group’s Carmichael coalmine, 600km southwest of Townsville, which will be the biggest in the southern hemisphere if it goes ahead.
But the slow-burn tensions are elemental: the clash between jobs and the reef, coal and climate change, city versus region, bluecollar workers’ mores against green-tinted idealism. They all underpin the impassioned debate on whether the $16.5 billion project should proceed.
Adani derailed Annastacia’s Palaszczuk’s re-election campaign in Queensland in November, and it’s now causing grief for Bill Shorten, compounding his fraught start to the political year. The by-election in Batman brought on by David Feeney’s dual-citizenship woes opens the way for the Greens to win a second lower house seat at Labor’s expense and, potentially, to destabilise Shorten’s leadership.
Sharpening his language in what’s seen as a bid to shore up Labor’s vote, the Opposition Leader in the space of a week went from being “increasingly sceptical” of the mine to accusing its Indian developer of promoting “fake jobs” and bracketing Adani with Clive Palmer’s failed nickel refinery in Townsville. It was too much for Hill. “The guys I know up here want those jobs,” she says, steaming over her coffee on the city’s Strand. “And they’re sick and tired of being dictated to out of the seat of Batman … where they can and can’t work, what they can and can’t do.
“If you don’t want coalmining jobs, good, don’t have them for Victoria. But don’t deny other places in Australia, like north Queensland, the right to employment.”
Shorten’s repositioning on the mine has sparked a rebellion among Labor Party and union stalwarts in Queensland’s coal belt, who warn that it could cost the ALP many more seats in that crucial battleground than what’s immediately at stake in Victoria.
Mike Brunker, the former coalminer and CFMEU lodge leader who went within 400 votes of win- ning the state seat of Burdekin for Labor at the Queensland election, vents his frustration, warning: “To win one seat in frickin’ Melbourne they have wiped out their chances in two or three seats here.”
Former state Labor MP Jim Pearce, unseated by One Nation at the November 25 state poll, tells Inquirer: “There is strong support for the mine going ahead in this region and I think anybody relying on support from that area would be fooling themselves if they go against the mine.”
And the president of the CFMEU’s mining division in Queensland, Stephen Smyth, says people “are sick of the interference not only by the politicians but the so-called fly-in or drive-in protesters who are an embarrassment to the hardworking families and communities”.
Resources Minister Matt Canavan says the investment community is watching closely, and Shorten’s gyrations raise sovereign risk questions that could be damaging to the national interest.
“This (mine) has been approved through the federal and state governments, withstood multiple court challenges and, at 10 minutes to midnight, to trade off our country’s investment reputation for some cheap votes in a by-election is highly irresponsible,” he said after the federal Labor leader dramatically hardened his stand on Adani at the launch of former ACTU president Ged Kearney’s campaign in Batman on February 2.
The row has erupted at what is almost certainly crunch time for the project commercially. While Adani has cleared nearly all of the regulatory hurdles, it is still finalising the financing in the face of considerable doubt that lenders will come on board. Australian banks are not interested given the poisonous politics; the company is said instead to be seeking a massive line of credit from the Chinese.
Part of the problem with Adani — at least from the Australian perspective — is that its finances and decision-making processes are not only opaque, but far removed. Those who have dealt with the company say that nothing of consequence is agreed without the sign-off of the board in India, headed by the company’s founder Gautam Adani.
A self-made man, he dropped out of university to bolt together an energy and infrastructure colossus that includes the subcontinent’s largest private rail network, a shipping line, ports and both coal-fired and solarpower plants. With an estimated personal worth of $11.3bn, Gautam Adani is close to India’s modernising Prime Minister, Narendra Modi, who is rolling out a program to bring electricity to the 300 million people whose homes remain off-grid. This is where the Carmichael mine outside Clermont in central Queensland comes in.
Prior to becoming PM, the charismatic Modi had been chief minister of the engine-room state of Gujarat, where Adani started
‘Don’t deny other places in Australia the right to employment’
JENNY HILL TOWNSVILLE MAYOR
out in business. And it is also where the multi-billionaire plans to send Queensland-mined coal to fire a 4620 megawatt supercritical power station, located in the Adani-owned port at Mundra, a trade gateway. The International Energy Agency estimates that the demand for electricity in India outstrips generating capacity by 7.5 per cent.
The proposed “pit to plug’’ supply line from the Carmichael mine would ultimately produce 60 million tonnes of coal a year and, according to the company, 10,000 direct and indirect jobs in north and central Queensland, regions that have been hammered by the tailoff in mining investment and drought.
But it doesn’t stop there. The mine is set to be the linchpin for opening the nascent Galilee coal basin. GVK, a joint venture between Australia’s wealthiest woman Gina Rinehart and India’s rich-listed Reddy family, is developing pits near Alpha and at Kevin’s Corner, but has been targeted by a tightly co-ordinated “disrupt and delay” campaign by green activist groups.
The war plan is detailed in a 2011 paper prepared in part by Greenpeace campaigner John Hepburn and the pressure group GetUp!, entitled Stopping the Australian Coal Export Boom. “Our strategy is to ‘disrupt and delay’ key projects and infrastructure while gradually eroding public and political support for the industry and continually building the power of the movement to win more,’’ the document says. It goes on to outline a staged program of legal challenges to environmental approvals intended, at the very least, to tie-up projects and sow uncertainty among financiers.
The strategy has played out almost exactly to script with Adani. Every one of its state and federal environmental approvals, its mining leases and indigenous land use agreements has been challenged in the courts. To date, the company has secured five judgments in its favour from Federal Court, Queensland Land Court and Supreme Court judges concerning the Carmichael mine, and won two lengthy environment cases involving the coal-loading terminal at Abbot Point, near the town of Bowen.
Adani says its compliance and legal costs have topped $150 million, blowing out the timeline for securing regulatory approvals from three to six years. By the company’s account, this, and the complexities of the financing and site planning, explain the ponderous progress. But it plays into the hands of the sceptics who question whether the company has the capacity to deliver its lofty promises.
Shorten said this week Adani had only itself to blame. “The fact that the banks won’t back it in, the fact that there always seem to be new environment issues … that’s the problem,” he said, taking another swing at the project. Asked when federal Labor would reach a final position on the mine, Shorten threw the question back on Adani. “They, time after time, keep saying that they’re going to have this project up and running and they miss a deadline. I’m beginning to wonder if the people of north Queensland are being led on with this promise of fake jobs and they’re never going to materialise.”
For Labor the issue is diabolical, drawing together the pincer threats it faces on its left flank from the Greens and on the right from One Nation’s appeal to its traditional blue-collar base in regional Queensland. The Batman-Townsville divide neatly captures this. At the 2016 federal election, the Greens’ vote in the Melbourne seat topped 36.4 per cent, pushing Feeney to the wire. The average home price there is $1.32m and unemployment nudges 7 per cent.
In Townsville-based Herbert, One Nation’s federal election vote surged to 13.5 per cent, delivering the preferences that propelled Labor’s Cathy O’Toole to a knifeedge victory. The Greens pulled a primary vote of only 6.2 per cent.
No one can be in any doubt how tough the times are in Townsville. Youth unemployment tops 20 per cent, driving a spike in bur- glary and car theft, Hill says. House prices have slumped. As she points out, a four-bedroom home is a bargain buy at $320,000.
More than 800 local jobs were lost when Palmer’s Queensland Nickel operation went belly-up in 2016, and there’s uncertainty about the long-term future of Glencore’s copper refinery, which processes Mount Isa ore on Townsville’s southern outskirts.
Hill accepts there is opposition to public money going to Adani to develop the mine — both federal Labor and the Queensland government reject its bid for a loan of up to $1bn from the Northern Australia Infrastructure Facility to build the rail link to Abbot Point, and she faced a local backlash when it was revealed her council had pledged $15.5m to co-fund an airstrip for the mine in partnership with Rockhampton, which will cohost a fly-in, fly-out workforce of about 1800 with Townsville.
But the Green sensibilities of Batman don’t cut it in the jobs-hungry north.
Hill says the estimated $90m a year that the mine would inject into the Townsville economy would go a long way towards filling the yawning gap left by the collapse of Queensland Nickel.
“Everyone wants to be part of the great Australian dream, why should it be restricted to Sydney or Melbourne, because that’s what the people of Batman are doing. Why shouldn’t indigenous people have the opportunity to work in a mine if they want to? Why shouldn’t they have the opportunity to get off welfare, have a job, buy a home?”
Brunker nearly kicked in the TV when he heard Kearney attack Adani’s employment record and predict the mine would fall over. “I’m an old unionist, too,” he fumes. “I grew up in the mines … for her to sit there in Melbourne and basically wipe us, to forget about the guys in the mining industry, it’s just disgraceful.”
Better to fight on “Labor values and fail”, he says, than to pander to the Greens for the sake of a single seat that is probably lost to Labor anyway. Former federal resources minister Ian Macfarlane, who now heads the Queensland Resources Council, says Adani’s treatment has been glaringly unfair.
He points out that at least six other major coal projects — involving the expansion of existing mines or new ones, some with the potential to produce up to 25 million tonnes a year — have quietly gone into development while attention was focused on Adani’s plan. “But we haven’t heard boo about them’’ he complains. “The treatment of Adani in this country is unprecedented in terms of the politicisation of the project.”
Macfarlane points to what happened to the company in the leadup to the Queensland election.
Last May, as the heat came on, Palaszczuk faced a revolt inside her cabinet over a $300m-plus royalties incentives deal offered to Adani. Although the Premier had agreed the terms during a visit to India where she met Gautam Adani, the deal to defer payment of royalties for the first five years of the mine’s operation was leaked to the ABC and seized upon by the Labor left.
Facing a challenge by the Greens in her seat of South Brisbane, the faction’s leading light, Deputy Premier Jackie Trad, secured cabinet agreement to water down the deal just as the Adani board in India was due to sign off on a final investment decision on the project. This was postponed and is yet to be made.
Palaszczuk’s cabinet is believed to have also voted last May to veto the NAIF loan, but that decision was not made public until anti-Adani protesters put a wrecking ball through Labor’s election campaign, forcing the Premier’s hand.
The ALP campaign team believes that neutralising the issue of the coalmine was critical to Palaszczuk’s victory, and it may be that Shorten was emboldened to go after Adani on that basis. But it’s important to remember that Palaszczuk made a key differentiation on the mine: while Queensland Labor was against public money going to Adani, it remained in favour of the project provided it measured up financially and met environmental standards.
One insider says Shorten “went to the precipice” of withdrawing federal Labor’s equally qualified support, but was urged to look beyond the March 17 by-election in Batman. The Coalition, through the Liberal National Party, holds 21 of Queensland’s 30 federal seats and Shorten knows Labor won’t come to power federally without carrying more of them.
At the same time, he needs to sandbag ALP marginals such as Herbert and Longman on Brisbane’s northern fringe, which might be next cab off the rank for a by-election if embattled Labor MP Susan Lamb also comes a cropper on her citizenship.
Touring the central Queens- land industrial centre of Gladstone yesterday, Shorten emphasised that questioning Adani did not make him “anti-mining”.
He said: “What we need to do is just make sure that we have a plan B, a plan beyond Adani. I don’t think anyone now can guarantee a whole lot of the commercial arrangements. I’ve said all along it’s got to stack up environmentally and commercially. It’s not me, there’s a lot of people saying there’s a lot of problems.”
Breaking his silence, Adani Australia boss Jeyakumar Janakaraj said the company had written to Shorten to reaffirm its commitment to the Carmichael project and the job targets. He warns, pointedly, that Australia is at a “crossroads” with foreign investment, and companies like Adani don’t work “on a three or a fouryear cycle in which elections take place in Australia”.
Janakaraj insists the facts speak for themselves. The company has so far sunk $3.3bn into the project — $1.8bn on the Abbot Point port purchase, the rest on planning and site works for the mine, as well as ancillaries such as legal costs. There’s a workforce of 800, including 123 people headquartered in the new riverfront office in Townsville, which Inquirer visited this week. The monthly payroll amounts to $7.2m.
“We are spending good money … that should give people confidence that we are being serious and not trying to test the ground. We would want people not to have any doubt on our commitment and intention to deliver the project,” the CEO said.
Still, he won’t be drawn on a date to lock in the financing or the call by Hill this week for Adani to get cracking on the site work.
“The business is not relying on today’s news and tomorrow’s … speculation,” he said.
“The business is absolutely on economics, the fundamentals of the resource and the quality of the resource.”
‘We are spending good money … that should give people confidence’ JEYAKUMAR JANAKARAJ CEO, ADANI AUSTRALIA
Preparations at Carmichael, above; left, Jenny Hill with Bill Shorten; below: a protest against Adani at Parliament House