Read Between the Lines!

When it comes to newspaper headlines, in which the mining industry cries ‘foul’ concerning the new Carbon Tax, with warnings that this will damage the economy and drive the industry to search overseas rather than Australia for development, one has to learn not to take them at face value and to read between the lines.

Perhaps an example, from another area of industry, that can illustrate this principle, can be found in an article that appeared in ‘The Australian’ on the 13th of July that stated that, ‘entrepreneur and former Civil Aviation Safety Authority chairman, Dick Smith, has angered unions by predicting that Qantas International will go broke unless it moves many of its operations to Asia.’ On face value readers of the newspaper may fear that, unless the unions back off, the very existence of Qantas as a viable company will be at risk. Readers may find themselves feeling sorry for the embattled Qantas who are between a rock and a hard place and would be forced, much against their will, to move their operations off-shore resulting in the regrettable, but unavoidable, loss of jobs for Australians. The reality of the company’s financial state is that, despite the fact that local and international flights were seriously disrupted by the volcanic ash cloud from the Chilean volcano recently, causing millions of dollars of loss to Qantas, it still managed to make a record profit for the financial year.

The mining industry has spent considerable time and money trying to convince the government that Australia’s economy is increasingly and obviously reliant on the mining boom, such that if there’s a cough in the mining boom, the rest of the economy catches pneumonia. Their version of reality is that the resources boom is the engine of Australia’s growth, propping up the flagging sectors elsewhere in the economy, and the recipe for success is to grant the mining industry special privileges and hope that it keeps us all afloat. A Carbon tax would hurt the industry and as a consequence hurt the economy.

Certainly the leader of the opposition has taken this propaganda seriously, and so taken up their cry and sown the seeds of public fear in an effort to convince voters to lose confidence in the Labour Government and vote the opposition in at the next election.

The problem with this view of the mining sector as being central to the welfare of the economy is that it is false. The mining industry is not supporting other sectors of the economy, it’s holding them back. To quote Steve Littlewood’s article:

“While the big mining states of Western Australia and Queensland are booming, in other parts of the country like Tasmania and regional Victoria the economy is sluggish. Areas that rely on manufacturing are suffering from rising interest rates and the effects of the strong Australian dollar on terms of trade.

“The Reserve Bank could offer relief on this by lowering interest rates, which would ease credit for small businesses and help to reign in the dollar, but it is loath to do so because of inflation fears largely caused by runaway growth in the mining sector.

“That is the essential problem of the ‘two speed’ economy; decisions on monetary policy that would benefit the rest of the country are being held back because of the mining states. The boom is driving growth in the resource rich areas, but it is impeding growth everywhere else.

“Even in the states where mining dominates, the positive effects of the industry boom on the wider economy are questionable. Business owners in non-mining activities are hampered by their inability to compete with the massive salaries offered in the mines. For residents it is increasingly difficult to find tradies to work on their houses, and when they do they are often charged exuberant fees. All activity is centred on the relentless expansion of the mines and this is crowding out growth and investment in other areas.

“The potential damage of this scenario is obvious to anyone who lives in Ravensthorpe, WA, which was left devastated when BHP Billiton closed down its nickel mine there. The former agricultural town closed down virtually overnight after the mining giant decided to pull the plug. All that is left now are half finished homes, built in anticipation of the mine’s long term operation.

“If things continue at the current rate, the whole of WA and North Queensland will be left as abandoned wastelands when the boom ends, as itinerant workers flee and leave behind half-empty towns and cities without an economic base.” (Steven Littlewood works as an economic researcher and industrial officer in the trade union movement.)

The opinion that the economy is increasingly and obviously reliant on the mining boom is not only incorrect (the financial and manufacturing sectors actually account for more GDP growth than the resource sector), it’s dangerous. If Australia is to continue to grow it needs to be equipped to do more than dig things up for the rest of the world. That means diversifying, investing in new technology and increasing productivity.

The Carbon Tax promises to provide a huge injection of funds to the development of renewable sources of energy and their supportive technologies. This potentially represents not only a boon for the environment, but jobs and a real opportunity for the Australian economy. The Carbon tax does not hurt the mining companies, but rather their relentless greed for profits.

Short-term profiteering at the expense of real productivity is not a secure basis for an economy. The resources sector brings real benefits to the Australian economy and needs to be supported, but the wider economy needs to be supported too, and that means bringing mining sector growth back to a more sustainable level. A modest slow down would maintain a healthy industry while giving the rest of the economy a break, helping to restore Australia’s growth to a more stable footing.

Unsurprisingly this is a message that the mining magnates do not want to hear. Why should they care about giving a break to car workers in Geelong or small business owners in Launceston, or the environment, for that matter?

We can expect the mining industry to pull out all stops to try to convince the public to shun a Carbon Tax. They will use the media to play on the fears of the public that, much to their regret, they will have to increase prices and cut jobs to make ends meet and remain competitive on the global stage. This, in turn, will push up the cost of living. They are the good guys and the big bad short-sighted government wants to punish them, and the Australian economy, simply in order to generate more revenue for itself. Read between the lines and see that it will not be the industries that are affected, but rather their relentless greed for profits.

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About Passionist JPIC Australia

I am a priest with the Passionist Congregation and a part of our Australian Province which includes Australia, New Zealand, Papua New Guinea and Vietnam. I have been ordained since December of 1992. I was born in the Philippines, though am from Spanish decent. I came to Australia in 1972 with my family when I was 11 years old, and we settled in Brisbane. That is where I did the rest of my growing up. On completing high school, I went to Queensland University where I studied for 4 years, completing a B.Sc. with a major in Microbiology. The following year I decided to enter into the Passionist Congregation to study for the priesthood. I trained for 9 years, and have been a priest for 25 years. In my time as a priest I have been Director of the Passionist Family Group Movement in Victoria, Tasmania and Queensland; conducted over 400 Parish Missions all around Australia and New Zealand, but particularly in Victoria and Western Australia; worked in adult faith education, Sacramental preparation for children and parents; Hospital chaplaincy; High school chaplaincy, in-services and retreats. In the year 200 I became engaged in developing young adult retreat teams and training them to carry on our high school retreat programs. I am also chair of our Province’s committee for Justice, Peace and the Integrity of Creation (JPIC). I am also a member of ACRATH (Australian Catholic Religious Against Trafficking in Humans).
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