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Wednesday, 3 October 1984
Page: 1544

Mr HOLLIS(11.05) —In this cognate debate, I shall restrict my remarks to the Customs Tariff (Coal Export Duty) Amendment Bill. I am pleased even at this late hour to speak on this Bill, pleased because its purpose is to enact Customs tariff alterations that exempt certain quality coal from coal export duty. This high quality coal is from Queensland. One thing I am not in this House is parochial, but there is high quality coking coal in my electorate and in the neighbouring electorate of Hughes, ably represented by my colleague the honourable member for Hughes (Mr Tickner), and miners from underground mines are being retrenched. They are being retrenched because in the years before the Australian Labor Party gained office, the Liberal-Country Party coalition believed its own rhetoric about a resource boom. It permitted mines to be developed without any strategy or plans and today mining, especially underground mining in the southern fields of New South Wales, is paying the price of this country having no national energy plan.

It is recognised that the coal mining industry, in common with other industries , is continually undergoing change. At least two factors make the coal mining industry more susceptible to change than other industries. One is the export nature of the industry, which makes it subject to fluctuations in world conditions and to the market pressures from other exporting countries. The other is the extractive nature of the coal mining industry which means that each mine has a finite economic life. It is a pity that the coal producers of Queensland and the Queensland Government do not adopt a less parochial attitude to coal exports. (Quorum formed)

The Customs Tariff (Coal Export Duty) Act was introduced in 1975 because the government of the day wished to channel to the community a proportion of the windfall profits then being made by coal export producers. The duty arrangements have been varied on a number of occasions to the extent that the only coal now dutiable is high quality coking coal mined from depths no greater than 60 metres in open cut mines in production before 1 July 1980. In practice, duty is currently paid only on production from eight mines in Queensland. The Government considers that the most desirable course is to incorporate the coal export duty into a Commonwealth-State resource rent tax package. However, we recognise that this may not be practicable in the immediate future. In an international market characterised by a substantial oversupply of coking coal the intense competition for available markets will continue for some time to come. Producers have been forced to accept price reductions and a substantial upturn is unlikely in the immediate future. Although the market for hard coking coal is depressed, the possibilities for the expansion of markets for Australian energy type coals are real.

Against this background in 1983 the Government received representations from CSR Ltd and Thiess Dampier Mitsui Coal Pty Ltd for relief from export duty on production from the Moura and South Blackwater mines located in the Bowen Basin in Queensland. Both mines must blend significant quantities of higher quality coal from their underground operations with coal from their open-cuts in order to obtain product of a quality suitable to meet export contract specifications. The addition of a higher cost underground product to their open-cut coal increased costs to the point where the imposition of the export duty on the open -cut coal in the exported product was having a significant impact on the rate of return to the producers. In order to assist the viability of these operations, the Government has decided to exempt from duty open-cut production in a situation where mines are and have been dependent on significant underground operations to maintain coal quality.

The Government considers that the maintenance of underground operations in the Bowen Basin will retain skills which will ultimately be of benefit to the industry as a whole in that region. This also demonstrates the Government's concern to assist employment security in the industry in the present difficult international marketing environment. I urge the Government to go much further. It is essential that Australia have a national energy plan. There are those who argue for even more deregulation in the mining industry, but I am not one of those. Australia's coal resources can be guaranteed only by government intervention in the industry.

Most of Australia's coal reserves are underground. It is all very well to develop open-cut mines but the peak of production from open-cut will be passed in 10 to 15 years. For that reason it is essential that underground mining be preserved in this country and that the skills built up over many years be preserved. It should always be remembered that more high grade coal has been lost in this country than has ever been mined. It has been lost through greed and poor mining techniques. Today the result is apparent, with water filled pits , cave-ins and underground fires.

Mr Ronald Edwards —Bad safety records.

Mr HOLLIS —Indeed, bad safety records contribute, as the honourable member for Stirling reminds me. We must preserve this great national resource that we have in this country. We must have a national energy plan. We must plan the rational development of the coal industry. There should be no argument between open-cut and underground mining. Each has its place. There would be no argument if the previous Government had not believed its own rhetoric. It is estimated that cost of the exemption covered by the Act will mean an annual loss to the revenue of less than $10m.

I commend the Bill to the House.