"By turning the ignition off your effectively energising the coil" ................................. actually the opposite (electrically)
But you've got the right idea.
Under normal operation when the points open the power to the coil primary winding is cut causing its magnetic field to collapse which induces a (much higher) voltage in the secondary winding which creates the spark. In the OP's case this is not happening. As
theelms66 points out welded points could be the cause. Looking at the picture it appears that the condenser (capacitor) on the LHS of the coil is not connected to the coil -ve. If so this may be the cause of the problem. The function of this capacitor is to act as a 'spark quench' for the points ie. it stops the points sparking and the building up of a 'tit' which can quite quickly cause the points to short out.
Other causes may be no points gap ie. points not opening due to mis adjustment or the -ve wire from the points to the coil grounding out.
A test lamp is your friend here. With the ignition OFF, disconnect the -ve wire from the coil and with +ve behind the test lamp look for the negative on the wire to the points. Take the distributor cap off and manually open/close the points. With the points open the test lamp should be off.
AFAIK (remember) Holden red engines (which this seems to be) did not have a resistor/coil setup but ran a 12 volt coil directly from ignition +ve via the points (same as the Landy). If the engine did have a resistor/coil setup and the resistor was open circuit the result would be an engine that started but didn't run when the key was dropped back from 'start'.
Deano
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