The latest news from the coalface of the climate wars has come through a report from the mining lobby, claiming that the government must learn from the lessons of the past. Basically, mining companies want more workers but they don’t want to be “forced” to offer them “high salaries and generous benefits” like they did in the heady days of the resources boom.
Many economists will point to the mineral sector’s high productivity as a justification for acquiescing to the demands of the mining lobby. But the truth is that mining isn’t the only, or even the best, job creator in rural and regional Australia.
Between 2002 and 2012, the RBA estimates that the “world price of Australia’s mining exports more than tripled”, and investments in the sector grew from 2% to 8% of GDP. There is little doubt that some got rich off the mining boom. The only problem is that it seriously damaged other sections of the economy.
As prices in mining grew, the Australian dollar appreciated significantly. While a more valuable dollar might seem like a good thing to the average consumer (prices of imported goods like smartphones, electronics and fashion dropped), the runaway currency growth hurt our agricultural and manufacturing sectors.
Also, unlike the mining sector — which, at its height, accounted for just over 4% of total employment — manufacturing and agriculture combined used to employ a quarter of Australian workers. Since the start of the mining boom, this combined employment has fallen to just over 15%. This means fewer workers with secure jobs in Australia.
What makes matters worse is that those lost manufacturing and agricultural workers spent their wages back into the local economy, paid their taxes and contributed to the community in a positive way. Not to mention that mining companies have spent decades sending profits offshore, avoiding their tax obligations and damaging the environment. And yet the mining lobby is asking the government to ignore all of this evidence because they will create a few thousand jobs in regional Australia.
If nothing else, the last election has shown that this is a very powerful card to play in the political arena. However, there are two ways that the government can answer these very legitimate concerns from regional Australia.
The first way is the mining company’s way. The government can continue to support the mining companies, the small number of jobs that they create.
The other way is to recognise that the mining companies are only half right. Regional Australians need jobs, but they don’t have to be coal mining jobs alone.
While the CSIRO found that Australians do believe that mining creates employment and economic benefits, they also found that Australians know that those benefits are not being distributed fairly. Most importantly, the mining communities themselves report that they don’t feel they’re getting a fair share of those benefits.
The second way is not easy — but it’s already happening in some parts of the country.
In Victoria, after the collapse of the car manufacturing industry that built Geelong into a thriving regional community, the state government is investing money into kickstarting wind turbine manufacturing into the old Ford site. It’s also investing billions of dollars into creating the nation’s largest windfarm between the regional centres of Geelong and Ballarat.
Innovative solutions are currently being sought, and next year Bundaberg is set to become the largest grower of medicinal cannabis in the country. While these are not the kind of “green jobs” that we traditionally talk about, they are a small part of a growing medical manufacturing sector.
While Australia has a high-skilled manufacturing base, Austrade estimates that we are only contributing to 2% of the global market for medical manufacturing and import almost 80% of our medical equipment from foreign producers. Yet Australia is leading the world in a number of medical instruments from 3D customised titanium implants, continuous positive airway pressure (CPAP) devices for sleep apnoea, insulin delivery devices, and diagnostic technologies for sleep disorders, neurophysiology and cardiology.
Strategic investments in medical manufacturing, renewable technology and infrastructure projects could go a long way towards providing stable jobs for regional Australia.
Ultimately, Australia stands on the verge of a new economy. Our government needs to decide if they want to support regional Australians and invest in new industries or leave them dependent upon a mining lobby that describes paying them a living wage as an act of coercion.
Shirley Jackson is an economist at Per Capita.
New mines are often touted as developing the regional economy. This would be true if the mine workers brought their families with them, rented houses and spent their wages on the local butcher, baker and grocer. Then when the mine closes, a more or less self-sufficient town is left behind, becoming a centre for further regional development. Instead, mine workers “fly in, fly out”, spending only their long working hours in the Bush and returning to spend their money and off-time with their families in the cities down south. Organisations fighting to develop the regional economies and communities seem to be failing their job.
“in the cities down south”. Evidence please? Or maybe just another north/south bash. My hypothesis is that the fly-in fly-out labour is likely to be sourced mainly from WA and Queensland, where the necessary skills have historically been developed. I might be wrong. But even then, old FIFO resourcing is being diminished by increasing automation and scurrilous use of 457 visas. The LNP has a lot to answer for, not the cities of the south.
WaratahBay asks, how do I know the mine workers’ homes and families are in the big cities down south. The source of my knowledge is from fifty years experience on and off with the mining industry. Part of the problem is that the states compete with each other for lower royalties (or none), whereas the Commonwealth can only tax the workers’ wages and facilities. Thus the mine-subsidised housing (to include families etc) got slugged at the top tax rate, so the traffic in workers relapsed into the ancient tradition of “going to the big smoke”. In fact, the mines subsidise the aircraft charters to regional centres like Darwin, Port Hedland, Townsville etc, and from there the workers fly on to Perth and other big cities. To them, all big cities are “down south”. Instead of competing with each other, the States should be collaborating with the Commonwealth to prop up small towns dotted across the Inland. I’m surprised that Crikey hasn’t more addressed Australia’s unnecessarily cheap royalties.
The Vietnamese are hoping to help Australia out by enrolling us in the One Village One Product scheme. There are craft workshops throughout regional Australia. A systematic strategy for harnessing their capacity would offer great opportunities for entrepreneurs. We need to think beyond the industrial mindset.
Mining creates jobs in regional areas? Did someone miss the article over the weekend news where all the mining Cos. are changing over to autonomous mines.
Not to mention FIFO for the few maintainer that are left. Mind you as nobody in the mining sector could afford to train tradespeople, these maintainers will be 457 Visa and prepared to live in shipping containers.
OK lay off a bunch of Pilots and Flight Attendants as well.
Basically, mining companies want more workers but they don’t want to be “forced” to offer them “high salaries and generous benefits” like they did in the heady days of the resources boom.”
The reason why the mining companies paid higher wages and benefits during the boom is because they were flat out stealing workers off each other. With BHP and Rio Tinto running massive iron ore expansion projects at the same time as FMG and Roy Hill were starting up, and the Gorgon, Wheatstone and Ichthys LNG projects were all under construction, workers at all skill levels were overpriced. Add into the mix the WA Government building 3 major new hospitals, a “gateway” road project, the Elizabeth Quay vanity project, railway and freeway extensions and widening, an indoor arena and a billion dollar footy stadium, and it is a recipe for disaster in the construction, engineering and support industries. And that’s just WA (and NT for part of Ichthys, although it was run from Perth).
A complete lack of strategic planning, from which WA is still suffering 5 years later, with many residential properties in negative equity, net emigration, retail vacancies through the roof, hospitality venues closing left, right and centre, and acres of empty CBD office space. Not to mention the tail of billions of dollars of project cost overrun and litigation.
A mess. The lesson that needs to be learnt is that there needs to be a public interest aspect to project approvals – not approving concurrent projects that will overload the economic capacity of the State or the nation to service them.
Fat chance whilst the culture wars are being prosecuted by the LNP and Pentecostal prosperity is wafting on the winds.