The benefits of coal

Taxes and Royalties

As one of Australia’s largest industries, coal makes huge financial contributions to Federal and State governments through royalties and taxes. Between 2007-08 and 2013-14, the coal industry is estimated to have contributed around $38 billion in company tax and royalties.11

Over the four years 2015-16 to 2018-19, total coal royalties are projected to sum to $15 billion. The billions of dollars being paid to government help to fund things we all benefit from like employing more nurses, police and teachers, as well as building essential services like roads and hospitals.12

Benefits of Coal Taxes Royalties

Employment

The industry surrounding this little black rock directly employs around 41,000 people, paying out salaries worth around $6 billion a year. This has a positive impact on the lives of many Aussies from trainees and apprentices to highly skilled experts such as engineers, geologists and environmental scientists. Add to this the numerous businesses and services that support, supply and rely on the coal industry and you can add another 111,000 Australian jobs to this figure, many in regional areas where jobs can be harder to find.13

Infrastructure

Another benefit that has far-reaching effects for all Australians is infrastructure. Aside from the billions paid in royalties and taxes that go toward providing infrastructure, the mining industry contributes hundreds of millions more to developing regional communities.

This includes building, improving or maintaining essentials such as roads, railways, ports, hospitals, schools, sporting fields, parks and more within those local communities the coal industry is a part of. All of this helps to create even more jobs outside the mining industry.

Benefits of Coal - Infrastructure
Broader Benefits

Training, education and community support

Not only an employer of tens of thousands of Australians, the coal industry looks to grow and develop the next generation of workers as well as continue to educate and support those already in the industry. Apprenticeships and other forms of training receive solid support, and tens of millions of dollars are contributed each year to fund community needs, including sports clubs, service organisations, charities and schools.

Benefits of Coal Training

Environmental rehabilitation

Coal mining operations have to meet comprehensive and strict environmental conditions before mining can commence.  These include having plans and funds set aside to rehabilitate land progressively during operation and once mining has been completed. It is the aim of coal mining companies to make previously mined land available for future beneficial uses. Previously mined land has been restored to conservation, grazing and cropping among other land uses.  Companies go beyond regulatory requirements, working closely with local communities to ensure land is rehabilitated in line with expectations.

Benefits of Coal - Environmental Rehabilitation
Benefits of Coal - Water Supply

Water availability and security of supply

Water availability and security of supply is a critical business risk for the coal industry, which generates a very high economic value-add from that use. The Australian coal industry has a long-standing commitment to the responsible management of water resources.  Water is used many times over in coal operations and the industry continues to innovate to improve the way water is managed, reused and recycled within and between operations. As demonstration of this, over recent years water use by the coal industry has decreased despite increasing levels of production. Coal mines are also required to meet strict conditions before water can be accessed.

References

11

Deloitte Access Economics, Estimated company tax, MRRT, carbon tax and royalties expenses for the minerals sector, Report prepared for the Minerals Council of Australia, July 2014.

12

Queensland Government, Queensland Budget 2015-16, Budget Paper 2: Budget Strategy and Outlook, p. 191; NSW Government, NSW Budget 2015-16, Budget Paper No. 1: Budget Statement 2015-16, pp. 5-5 and B4-6; Victorian Government, Victorian Budget 2015-16, Budget Paper 5: Statement of Finances, p. 185.  NB that black coal accounts for approximately 95 per cent of total mining royalties in NSW and lignite accounts for approximately 70 per cent of total mining royalties in Victoria.

13

Australian Bureau of Statistics,  Labour Force, Australia, Detailed, Quarterly – May 2015, Cat. 6291.0.55.003, released on 18 June 2015; Australian Industry 2003-04 and Australian Industry 2013-14, Cat. 8155.0, 2013-14 edition released on 29 June 2015.  Output and employment multipliers are longstanding features of input-output models in economics.  The MCA uses a conservative coal employment multiplier of 3.7, which was derived by Sinclair Davidson and Ashton de Silva, The Australian Coal Industry – Adding value to the Australian Economy, paper commissioned by the Australian Coal Association, April 2013, p. 7.  Their modelling drew on a February 2013 Reserve Bank of Australia working paper which found that the wider resource economy accounted for 18 per cent of gross value added in 2011-2012.  See Vanessa Raynor and James Bishop, Industry Dimensions of the Resource Boom: An Input-Output Analysis, Research Discussion Paper 2013-02, Reserve Bank of Australia, Canberra, 2 February 2013.