So how do we think the New Improved Feds are going? Especially with those rascals in the back row throwing darts when they think no-one is looking. And sometimes in plein air. How will the enviro/susty/cities agenda shape up? Is it all eco-babble to the susties, and “no change, all continue to stop then go backwards” to the people supplying the darts to the back row? Or has the new PM really snapped the nexus of nihilism?
It’s all quite interesting if you ask Tim Buckley former head of equity research at Citigroup and now leading commentator on energy finance at the Institute for Energy Economics and Financial Analysis.
We called Buckley on Thursday afternoon to see how he read the tea leaves on enviro minister Greg Hunt’s approval of the Carmichael coal mine in the Galilee Basin for the Adani Group.
Buckley was pleasantly relaxed.
It’s worth putting in perspective that the Queensland Land Court has still to hand down its decision on the case heard in April that challenges the project on the basis of issues such as water, pollution, financial viability and threats to endangered species, Buckley said.
This can be expected in the next three to six months and it’s then up to the Queensland government to accept to reject the recommendations.
“In a nutshell that’s the big decision that will determine whether the project goes ahead,” he said.
The other is the project doesn’t have the approval of the traditional land owners, the Wangan and Jagalingou people, who have a challenge to stop the mine in the Federal Court “as we speak”.
The government can override that challenge but it would be “a brave state minister” who would dare, he said. “It hasn’t happened.”
It would also take a very brave minister to ignore any recommendations of the Queensland Land Court, if it opposed the mine.
But even if Adani could surmount these obstacles an even bigger problem is that 15 global banks have said they won’t fund or advise on the project, Buckley said.
“There is not one single bank who has said it will fund the project, and on the road to Paris there won’t be too many banks prepared to do so.”
So “no financial close. The project is not financially viable.”
It’s possible the Feds could de-risk the project with public funds but resources minister Josh Frydenberg who first mooted the idea through a Northern Australia infrastructure fund is now backing rapidly away from the suggestion, Buckley said.
So why has Hunt approved the mine? And how does Buckley see the PM Turnbull performing on environment issues?
Buckley says Hunt probably needed to reverse his procedural mistakes that led to the initial rejection of the mine and there would be no reason for Turnbull to stand in the way of such a decision.
Turnbull, he said, would be very careful to play it safe until the next election “and get a mandate on his own right”.
It would be wasting political capital to pick a fight on Adani project when the project is unlikely to go ahead in any case.
Better to play safe till the next election and get a mandate to do his own thing.
You see now why politics is so much fun. If only it wasn’t playing with people’s lives. And causing so many wasted conniptions.
Outbreaks of logic and rational thinking
Yes the early signs are mixed. The tea leaves say we need to be patient (see above), but the message from the New Improved Feds is definitely spinning the collaboration and logic agenda.
Treasurer Scott Morrison even said last week he would take a good look at opposition plans for a $10 billion infrastructure investment bank.
During the week there was an even bigger outbreak of logic and rational thinking, with Turnbull flagging that ideas for infrastructure funding, touted for years, were now up for consideration. albeit with a few spikes thrown on the road to keep us on our toes.
For instance Turnbull said on Monday he would take a good look at value uplift funding for rail and road projects seriously.
That’s the idea to use future income streams that emanate from the rise in value of property near good infrastructure to fund the infrastructure. It’s serious long-term joined-up thinking that only governments can do (though we suspect some of the corporate giants gracing our shores with their presence but not their taxes have even longer horizons).
But hands up for anyone who has ever seen the value of houses go up when a freeway is built alongside?
Being the optimists we are, we somehow missed at first gleaning the word “road” next to the headlines on Monday, “PM explores radical road, rail funding”.
Disconnect. Misconnect. Roads and uptick in value do not go hand in hand.
What’s more likely is land values alongside roads falling.
So will the value uplift program work in reverse to compensate owners next to roads?
But despite this promise to treat the good and bad twins equally, there is no doubt we’ve got an outbreak of decent debate, dialogue and communications.
On the cities agenda the talk is upbeat
The mood on cities seems to be getting stronger with ever larger conversations opening up.
Melbourne has a head start with its own new improved (state) government shifting direction on sustainability and climate.
This week a contact who has promised us more on this front said a recent breakfast about Fishermans Bend, with government agencies included a presentation on the implications for energy, water, waste, green space and cost of living modelling over the 50 year lifetime of the project. Now that’s a tad longer than the usual political spin cycle and a tad wider than the usual considerations of the previous government that stopped at the coffers.
The same audience heard (from Adam Beck of EcoDistricts, we understand) that money and technology are not barriers; the true barriers are getting the right governance and collaborative approach.
We agree – it’s the politics, always, that are the barriers – negotiating the humans in the room.
Canberra and politics
Speaking of politics, Canberra this week hosted the important Council of Canberra Capital Cities Lord Mayors confest, where mayors honed the extraordinary skills they practice of balancing community needs and demands with the policies that impact on the daily life of most of us.
Adelaide Lord Mayor Martin Haese, who we’ve spoken to before, when he announced his city would subsidise solar and battery storage to the tune of $5000, summed up the brilliant opportunity posed by cities.
In technology, he said, the potential of the move towards sustainability was “just extraordinary”.
“I call it ‘the business of climate change’. “
He said the big opportunities were in “technological innovation, research and development, greening and sustainability” and that’s all coming out of city environments, he said.
See Willow’s piece on this.
Sydney oh Sydney
On Sydney the biggest city with the biggest problems there is a growing avalanche of ideas on what can be done with the expected growth to 8 million people.
Some people say go up. But it’s not quite the same as the cowboys who went west in the US to find growth. Going up to a medium height has its advantages, going up to skyscraper level is not such a good idea.
See Cameron’s piece on this earlier in the week, A tale of two cities: skyscraper debate reaches farcical new heights
On Wednesday a most interesting article appeared in The Sydney Morning Herald from Sue Holliday, former director general of Planning in NSW, presenting a coherent and clear view of how the city’s growth could be managed. It wasn’t upwards, it was fastwards (for want of a better word). Holliday’s vision of a highly connected Sydney with its inner, mid and outer rail loops connecting the city and enabling density in existing areas is such a joy to read because it makes so much sense.
We’ve published the speech that the article was based on in full, The tipping point – cities on the edge
Here’s the bit about metros:
Metros are the tool to connect and distribute people around the new Sydney focused on the West. Initially, a circular inner metro through Rozelle as originally conceived could link the Olympic Park, and Bankstown. A middle ring metro can link Chatswood, Epping and Macquarie Park and to Parramatta fulfilling the ambition to link Parramatta to the “global arc”. An outer Metro will link Rouse Hill to Airport City at Badgerys Creek and then loop around to Leppington, East Hills and Kingsford Smith Airport and the CBD. A new link between Airport City and Parramatta is possible and a 40-minute express link from Airport City to the CBD is possible via Leppington and Kingsford Smith Airport. This is a 50-year plan.
Holliday also called for serious action on affordable housing – up to 25 per cent of all government land agency development to be affordable and half of all government land, she says. That’s the other big issue increasingly flagged in the cities debate.
Also in Melbourne
Ben Waters (ex GE) popped into Melbourne for the recent All Energy conference where he spoke about the potential for decentralised energy and water, something he’s working on with his company Presync along with co-founder Hudson Worsley (ex Stocklands).
Also speaking at the event was Greg Hunt who continued his determination that Direct Action was good and was working (we think he’s promised to keep saying this as some sort of pact with the Tea Party in Oz). Waters, we know from past conversations, has his reservations about this claim, but not many about the definite uptick in the atmospherics at the conference and elsewhere in the susty industry.
The big buzz at the conf was around solar and energy, Waters said. “It’s pretty interesting and there’s burgeoning interest.”
Waters says some people are still sceptical about the New Improved Feds but more than anything there is a distinct “change in tone” and a removal of the “fear” of doing something.
“People are more willing to have a go. There’s a better feeling.”
On the downside political risks for Turnbull, Waters says, “There’s a smart man in charge. Nothing is going to be perfect at first. There’s a political agreement to get to and he has to play it sensibly.” But overall there are definitely more sensible statements emanating from that direction, he said.