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.