Keith Pitt's coal scheme "bizarre and wrong", Labor says

Resoures minister Keith Pitt has suggested the federal government become the funder of last report for coal and gas projects. Picture: Sitthixay Ditthavong
Resoures minister Keith Pitt has suggested the federal government become the funder of last report for coal and gas projects. Picture: Sitthixay Ditthavong

Labor has slammed a Nationals proposal to have taxpayers underwrite a $250 billion loan scheme to prop up the resources sector as economically and environmentally "reckless".

Resources Minister Keith Pitt's suggestion that the federal government become the financier of last resort for the mining sector has sparked a strong backlash, including from Liberal MPs.

Prime Minister Scott Morrison refused to be drawn on whether a financing guarantee for mining projects would be considered as part of a deal to secure the Nationals' support for a net zero by 2050 target ahead of next month's Glasgow climate summit.

Mr Pitt told The Australian Financial Review that if the government wanted to protect jobs and keep the lights on it would need to intervene, as banks and insurance companies continue to withdraw support from the sector.

He told the paper that a loan facility of $250 billion would be needed. The Canberra Times sought comment from Mr Pitt, but did not receive a response.

Nationals leader and Deputy Prime Minister Barnaby Joyce was supportive of Mr Pitt's proposal, but said the party had not agreed to it.

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Labor's climate and energy spokesman, Chris Bowen, said Mr Pitt's proposal was "bizarre and wrong".

"I mean, these guys are meant to be the party of business and they are suggesting a massive government intervention to interfere with the market," he told The Canberra Times.

"It's reckless environmentally, it's reckless economically, it's reckless fiscally. They want the taxpayer to take the risk of investing in stranded assets. This is a sort of Venezuelan-style intervention."

Mr Bowen said banks should decide who to lend to, not public servants.

Labor's Chris Bowen said Mr Pitt's proposal was economically and environmentally reckless. Picture: Dion Georgopoulos

Labor's Chris Bowen said Mr Pitt's proposal was economically and environmentally reckless. Picture: Dion Georgopoulos

The proposal drew sharp criticism from Mr Pitt's own Coalition colleagues, with Liberal backbencher Jason Falinksi arguing the idea hadn't worked anywhere in the world.

"It's not something that we should try and do," he told ABC radio.

Mr Morrison remains locked in talks with Mr Joyce about a long-term emissions reduction plan for Australia, which could include a net zero by 2050 target if the two coalition partners agree to it.

The Nationals remain split on a 2050 target, with some open to the commitment and others firmly opposed.

Mr Morrison wouldn't comment on Thursday about the merits of Mr Pitt's proposal, saying those discussions were reserved for cabinet.

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Pressed on whether the Liberals would countenance a deal with the Nationals which included taxpayer-funded guarantees to shield the resources sector amid the transition, Mr Morrison delivered the same response.

"We'll work through that issue within the government and we'll settle the government's position and we'll be advising that before we go to COP26. We'll do that within the cabinet ... that's the appropriate way to run a country," he said.

Mr Morrison is under increasing pressure to raise Australia's climate targets ahead of the Glasgow conference, with Samoa's Prime Minister the latest leader to push for stronger action.

On Thursday, Mr Morrison said Australia's goals would be set in accordance with the "national interest".

"They'll be set by Australians, they'll be set by the Australian cabinet, for Australian needs, and we'll make our Australian way," he said.

Mr Morrison has yet to publicly confirm whether or not he will attend the Glasgow summit.

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This story Nationals coal finance scheme slammed by Labor, Liberal MPs first appeared on The Canberra Times.

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