Australia doesn't need Adani's Carmichael coalmine, Westpac chief says

The Adani Carmichael coalmine is not needed to support the economy, the Westpac chief executive has said in defence of his bank’s decision not to finance the mine. On Radio National on Tuesday, Brian Hartzer said Westpac’s decision to set a climate policy, which in effect rules out financing the Adani Carmichael coalmine, was based on its acceptance that climate change should be limited to 2C by 2050. Hartzer said coal still had a role in the energy mix but also spoke of the need to “start that transition” to the highest-grade coal of 6,300 kilocalories per kg. “We were not asked to fund that particular mine. What we’ve made is a policy decision that, in general, we need to do our bit to support the transition to a low-emission economy,” he said. Hartzer said the bank’s advice was that “all the coal that is required to support the economy between now and 2050 can be met by mines in existing basins”. “Given the long timeframes associated with opening up new basins, we therefore said we don’t think we need to support that.” Asked about resources and the northern Australia minister Matt Canavan’s claim that the decision discriminated against north Queensland, Hartzer said he had “sympathy” for Canavan trying to support jobs in north Queensland. On Canavan’s call for a boycott of Westpac, Hartzer said it was a “free country – people can say what they like”. He noted Westpac supported four coalmines and coal infrastructure in north Queensland and would support the extension of existing mines. “It’s not a policy targeted on any particular area. It’s a policy designed to take a pragmatic step, based on the science, to do our part ... to lead towards a low-emission economy.” On Tuesday ABC said a confidential report prepared for a New South Wales-based coal company found that if the Adani mine went ahead, it would add about 40 million tonnes a year of capacity to the market. As a result, global coal prices would fall by nearly $3.80 a tonne from a base-case consensus forecast of $68.80 a tonne to $65, it said. Asked to comment on reports that the government would impose a levy on banks for victims of financial advice scandals, Hartzer said Westpac supported a dispute resolution scheme funded by companies generating complaints. “I think the question of past practice – it’s important to recognise that there are many contributors, not just banks, to the issues that have happened,” he said. “Some of the past disputes relate to companies that aren’t actually banks.” Hartzer said it was an “interesting precedent” to ask the banks to pay for “a lot of the big issues” caused by other parts of the industry. He said banks would pay their fair share and acknowledged there was a “trust gap” because banks had not done “all the right things”. In response to the reported levy, the Australian Bankers’ Association chief executive, Anna Bligh, has said banks were already significant contributors to the tax bucket in Australia. “I think they would be very concerned if there is a punitive tax or levy that singles banking out from the rest of the business sector,” she told ABC radio. “There would be a great deal of alarm, not only in the banking sector but in both the domestic and international investment communities, if there was to be an attack on the value of banking in this country.” Hartzer said that house prices, while high, were “understandable in the context of supply constraints”. He said the Reserve Bank of Australia had warned about the ability of homeowners to service mortgages if interest rates rise but “not the risk of the mortgage portfolio”. Asked about the Productivity Commission review of competition in the banking sector, announced by treasurer Scott Morrison on Monday, Hartzer said there had been “a lot of inquiries” into banks but he was in favour of measures to give people confidence that there was competition in the sector. Hartzer said a royal commission would be expensive and time-consuming, and the case for it had not been made because banks were remedying issues in the sector. Asked about separating retail banking from financial planning to repair banks’ reputation, Hartzer said banks aimed “to help customers manage all their money in one place”. “We’re not biased to selling anyone a particular set of products.” He said banks were a “sensible place” to sell insurance and financial planning, provided conflicts of interest were properly managed.