Back in early August I observed that higher coal prices were helping the Qld economy and state budget in this time of rolling lockdowns. Amazingly, the all important metallurgical or coking coal price has surged even higher since then. There was speculation in the Financial Review on Monday that this could mean an additional six billion dollars for the Queensland Budget, depending on how long the higher prices last (see Coal price boom softens blow from iron ore slump).
Futures prices suggest prices will remain over 200 USD/tonne for another twelve months, which is great news (see the 12th position series in the chart below which currently relates to contracts settling in August 2022, while 1st position relates to contracts settling in the current month). Of course, these prices can move around a lot, depending on global economic conditions, so things could change, particularly if there is a financial crisis in China and contagion across the region due to the Evergrande failure. Note the most recent prices in the chart below were for Monday, but I haven’t seen any news since then that would suggest they have crashed between then and now.
We really need a strong mining sector at the moment to counteract the adverse impacts of COVID-related restrictions on Queensland’s tourism sector. The Gold Coast-Northern NSW border bubble has burst again, and tourism businesses are now worried interstate borders could remain closed over Christmas.
Finally, it is distressing that Australia is seeing its greatest internal turmoil since probably the dismissal of the Whitlam Government and the subsequent federal election period in 1975. In Victoria, we have just learned how far a government can restrict the liberties of its population before its people push back en masse. People were willing to go along with the restrictions so long as those restrictions appeared to be proportionate to the risk and fair, but in Victoria and arguably in other states, too, those restrictions have been disproportionate and unfair, even cruel.
The hard border policy enacted by the Queensland Government has caused immense suffering, and it is the policy that’s the problem, even though the Premier has tried to blame Queensland Health bureaucrats for actually enforcing the Government’s policy. There is a constraint on how many people we let into Queensland, i.e. available hotel quarantine rooms, and, if the bureaucrats show mercy on one individual, they will need to make another suffer.
In my view, the federal government needs to show some leadership to bring all our rogue state premiers into line before they do even further damage to the economy and people’s lives and wellbeing.
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