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NZ’s subsidies of coal and rail are nothing like Australia’s

Australian state governments spent A$17.6 billion on subsidies for mineral and fossil fuel industries over six years, including A$8 billion to help transport coal, according to a report.

The Australia Institute says it's the first time state subsidies have been added up and they are on top of Federal subsidies, estimated at A$4.5 billion in 2013.

The report reveals the extent of Australian state government support for rail infrastructure for mining companies at a time when New Zealand is rebuilding its rail network and bailing out state-owned coal miner Solid Energy, a major rail user.

Transport Minister Gerry Brownlee recently told parliament the government has poured billions of dollars into KiwiRail after the previous Labour-led government bought back a lemon.

"Sometimes it's hard to kick life into something that's fundamentally dead," he said.

The Australia Institute calculates Queensland has kicked more than A$7.6 billion into coal transport and concessions over six years.

Queensland's expenditure on mineral and fossil fuel industries in 2013-14 is similar to the amount spent on disability services and capital expenditure on hospitals.

The Queensland government spent A$831 million on the Goonyella-Abbot Point Expansion, mainly between 2010 and 2012. The project, located in central Queensland's Bowen Basin is often referred to as the missing link project, as it connected two coal railway systems. It enables coal mines that were previously only able to ship coal out of Hay Point, near Mackay, to rail coal to Abbot Point near Bowen.

The report also says those hailing rail privatisations in Australia as a successes haven't always counted the subsidies put into the companies before they were sold.

(BusinessDesk)

Comments and questions
5

The most heavily subsidised industry in NZ is Tourism. From central government to local government - they all spend a fortune on promotion, facilities and infrastructure designed primarily to support tourism but often dressed up as supporting the locals.

Pure private railroading has never been possible since WW2. The US passenger rail was sustained at a far higher level than possible until 1967 because it was almost entirely financed by the US Mail moving by rail. |n 1966 there were a hundred million long distance rail passengers in the US, since loads have never exceeded a quarter of that, parly because Amtrak was sold to the politicians on the idea of it preserving transcontinental services , but that was impossible.Rail was not useful furthur than Chicago-St Louis level. Post WW2 rail anywhere has only been useful for passengers and coal, minerals and mail. Even the Brit Std steams are all very different passenger engines

be interesting to see how they calculate it, is the funding an investment and the freight rates subsidized, or did they hand over that much cash?

Just imagine if that money was invested in clean energy initiatives instead of dirty ones. Let's not try to "catch up with Australia" on this one.

Rail has always been a huge draw back to this a growing country with short distances to travel by world and certainly Australian standards. Even our logging boys hate them. Taking funds from multilane highways that would have by now covered all major routes with the resultant huge saving in fuel use and lives, not to mention accident and associated medical expenses. Give the rail routes to the coal boys so long as they run and maintain them as a private business. Tell the greens and Labour lefties to take a powder and add up how much is wasted that could be put to better use elsewhere.