Opinion pieces

We must plan beyond coal or be buried

February 08, 2019

People are shocked when I tell them that the biggest Hunter project funded by the Howard government when the BHP steelworks closed was the renovation of the Newcastle Yacht Club. I know many former steelworkers, but I’m yet to meet one who got work on that project.

This is important when we consider the future of coal-fired electricity and coal mining in the Hunter. Our four ageing coal-fired power stations will close; and the demand for thermal coal will, eventually, decline.

We need to start planning, as this week’s Weathering the Storm: the case for transforming the Hunter Valley report made clear.

The global demand for thermal coal peaked in 2014 and fell by 8 per cent in the next two years. Export of Australian thermal coal has actually increased by 27 per cent since 2012, as it has replaced poorer quality Asian coal, and I welcome the jobs this has created. But as nations shift to renewable energy, the global thermal coal trade will decline further, hitting Australian exports and Hunter jobs.

Australia has been very poor at handling these adjustments. It’s not just jobs that are lost, but the health and social cohesion of communities is affected.

Labor’s Just Transitions policy will ensure displaced workers and their communities are supported. We will make it mandatory for power stations to participate in pooled redundancy schemes to help ensure every worker affected by a station closure is provided an offer of work nearby if it is available.

Labor will establish an independent Just Transition Authority to help plan for and co-ordinate the energy transition. It will oversee pooled redundancy schemes and economic diversification plans. Establishing a transition authority before plant closures and conducting early planning leads to much better outcomes.

Economic diversification can break the vicious cycle of economic and social disadvantage in fossil-fuel concentrated regions, and must be the centrepiece of any transition strategy. Diversification has the greatest success when it builds on existing regional capacities and advantages.

We can look to the Ruhr Valley in Germany, where the transition away from coal and steel led to diversification into clean technologies, creating 100,000 new jobs.

Labor’s policy to move to 50 per cent renewables by 2030 in Australia will create up to 71,000 new jobs.

With many parts of clean technologies originating from mining and manufacturing technology, the Hunter’s university research expertise and strong manufacturing and supply chains have us well placed to win a share.

But we must plan for it.