Does coal dust cause poor spelling? No external value for this included in Liddell economic appendix!
Economists at Large have made a submission on the proposed Liddell coal operations modification. Our submission focuses on the economic appendix, written by long-time coal industry consultants Gillespie Economics.
Many of our criticisms are identical to those of previous assessments by Gillespie Economics – misleading use of IO modelling, social value of employment based on flawed choice modelling, etc. What is new here is the amazing lack of transparency behind the calculations used. Gillespie Economics fail to disclose the most important assumptions of their assessment:
- Thermal coal price
- Semi soft coking coal price
- Production schedule
- Yield of product coal from run of mine coal
- Marketing expectations – portion to be sold as thermal or metallurgical coal
- Royalty rates and deductions
- Tax rates and deductions
- Exchange rates
Yes, that’s right! They don’t tell you how much coal they’re expecting to be produced, what quality it will be or how much it will sell for. It’s hard to believe that only months ago the NSW Treasury said:
The characteristics of a good quality CBA include transparency and repeatability, with assumptions and methodology clearly identified, and rigorous sensitivity testing. Unfortunately in the paper available to us, the Gillespie Economics analysis does not clearly detail the inputs and assumptions used in its calculations, making the testing of assertions more difficult.
We are dumbfounded that such an assessment could have been considered ready for public comment. We urge the rejection of this project until adequate assessment has been undertaken.
Special thanks to new Economist at Large, Andrew Scarlett, for his assistance with this submission.
