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Adjournment speech: The myth of mining and employment

Speeches in Parliament
Lee Rhiannon 13 Dec 2013

Senator RHIANNON (New South Wales) (20:47): The mining industry has created the myth that it is the backbone of the economy, creating jobs and providing a foundation of prosperity-particularly for rural and regional Australia. The slick campaigns that the mining industry run present this false picture. The reality is that mining is not a big jobs creator. In many areas it is in fact a jobs killer, and in my home state of New South Wales that is becoming more and more apparent.

Mining employs less than two per cent of the Australian workforce. As of July this year at least 26,000 people have lost their jobs in the Australian mining industry. In the first six months of the global financial crisis the industry in fact shed 15 per cent of its employees.

The Australia Institute have produced a very useful report, Mining the truth: the rhetoric and reality of the commodities boom. They found that the inclusion of figures for indirect employment is often used by the mining industry in presenting mining employment figures. This makes employment in mining appear substantially larger than it otherwise would if we relied on the official Australian Bureau of Statistics figures.

The mining industry actually pay economists and consultants to estimate the size of their industry's multiplier-that is so they can estimate the number of indirect jobs-and then they bring forward these extraordinary figures. The Australia Institute have estimated that if the number of indirect jobs associated with every industry were totalled then the number of jobs in the economy would exceed 30 million-almost three times the size of the Australian labour market. That certainly does put a cloud over what the mining industry brings forward.

This multiplier effect only makes employment in the mining industry look significantly larger when the sum of direct and indirect jobs in the mining industry is compared with only the direct jobs in other industries. Once the multiplier is applied to all other industries, mining once again returns to being a very small employer in Australia. The mining industry, in fact, has played a very small role in the growth of employment in Australia over the past seven years. The increase in jobs in the mining sector accounts for only seven per cent of the total employment creation over that period. I set out that information to highlight how the mining industry has been able to get away with its deception.

This great myth perpetrated by the mining industry is starkly on display when we look at the coal industry. At the end of 2012, out of a national workforce of 11 million the coal industry employed just over 45,700 workers. To put in perspective the small returns from this industry, employees in the coal industry are one-quarter of the number of those working in the tertiary education sector and a bit more-probably a few thousand more-than in the printing and publishing industry and in the dairy sector.

The success of the con job that the mining industry puts over Australia is revealed in some further research from the Australia Institute. A survey showed that Australians believe 16 per cent of workers are employed in the mining industry-around 16 per cent was the average response. But as I mentioned, according to ABS figures it is less than two per cent, coming in at about 1.9 per cent. The same survey found that Australians believe mining accounts for more than one-third-actually 35 per cent-of economic activity.

When we remember that on top of this failure to deliver on the promised jobs and economic benefits to our society we also have to deal with the damage caused to public health, the local environment and the world's climate by mining then it is clearly time for a reassessment of the role of this industry in our society and in our economy.

For the record-because I find that when I speak about the mining industry the Greens position is often distorted-the Greens are not advocating a mining industry shutdown. My comments tonight are about correcting the lies and distortions pushed by mining multinationals, their peak organisations and their lobbyists. It is time that governments worked on transitioning our economy to clean jobs, clean energy delivery and clean manufacturing. This is where there is real jobs growth that will last for decades and decades. Even with the resource abundance of this country, it is clearly time to recast our economic structure towards greater ecologically sustainable practices.

But right now the coal rush is on. Coal multinationals can see multibillion dollar profits, not million dollar profits. We are talking huge amounts of money here. In June this year Greenpeace released a very useful report that disclosed that 91 proposed coal projects in this country would triple production of export coal over the coming decades, from 300 million to 900 million tonnes per annum. This contrasts very sharply with the assets involved in developing a clean economy. These assets are long lived, but they do take capital and time to become established. This is again why we need to come back to the role of government. Government needs to step up to the plate and work on this transition.

We know right now that the mining industry is damaging our economy. Research shows that when new mines are developed, jobs in other industries are lost. Mining does not create jobs these days; it is, as I have said, a jobs killer. This is because when mining developments go ahead they push out jobs in other industries. Economist Matt Grudnoff has found that the mining industry in Queensland has the potential to crowd out 20,000 non-mining jobs in manufacturing, tourism and agriculture. This makes sense of the thousands of dollars the industry has recently spent on trying to argue it can coexist with others. We have seen the same thing in New South Wales, with the industry presenting that it can live with the farming industry, with the wine industry, with horse breeders. But as we have seen, particularly in the Hunter, that is certainly not the reality, with many of those industries being forced to leave that beautiful valley.

What we see is that thousands of dollars has been spent by the industry arguing how all these industries can exist together. The idea seems to be that if the data does not match the reality then you bring forward a very expensive advertising campaign. In the last financial year BHP Billiton brought in a profit of $12 billion. Clearly, these advertising campaigns, which are expensive by most people's standards, are barely petty cash for big companies. Rio Tinto's half-yearly profit for 2013 was $1.7 billion. Glencore Xstrata's underlying profit was $2.04 billion. With 83 per cent of mining companies being foreign owned, the idea that they are all part of our national interest is an absolute myth. They already pay 7.1 per cent less tax than the industry average, so the economy is not even gaining the benefit that many people expect comes from the mining industry.

The evidence is in that we can create thousands of jobs that will last through the 21st century. According to the University of Technology Sydney's Institute for Sustainable Futures, 2,016 people were directly employed in the renewable energy sector in New South Wales in 2010, with an additional 1,500 in the energy efficiency sector. At the same time there are fewer than 1,800 people currently employed in New South Wales coal fired power stations and fewer than 4,000 coalminers supplying their fuel. In a very important report from the University of Newcastle's Centre of Full Employment and Equity, figures from 2008 reveal the jobs that can be generated. The centre identified that between 61,400 and 73,800 direct and indirect jobs could be created in New South Wales by transitioning to 100 per cent renewable energy sources. There is also the work from 2011 of the Beyond Zero Emissions group's Zero Carbon Australia 2020 Stationary Energy Plan, which said that just under 161,000 direct jobs could be created in the renewable energy sector over a 10-year period. Based on their estimates, 16,405 jobs would be created in the renewable energy sector in New South Wales in the first three years of implementing the plan. So the jobs growth that can be created in the renewable energy sector, in clean manufacturing, is massive. Again, there is a clear role here for government. These very exciting figures have been emphasised by the Clean Energy Council's estimate that the nearly $12 billion of proposed investment in 28 wind farm developments in New South Wales would create 3,940 jobs if they were to go ahead. Currently, we have only 197 people employed in the wind farm industry in New South Wales. So the potential is there waiting to take off, and the role of government clearly is very urgent.

The importance of this issue is highlighted when we look at unemployment, particularly in regional areas and amongst young people. We need to look at the figures in these different sectors because these days I find that the talk about unemployment is quite muted. We are told that unemployment is not too bad, that the national unemployment rate is under six per cent. Again, we need to look deeper. There is real hardship, there is misery in many areas and we are getting generation after generation of families that have not had adults going out to work. The flow-on effect is enormous and the loss to our economy is considerable, as well as the damage done to so many individuals.

The Statistical Bulletin released by the Commonwealth Parliamentary Library reported that in October this year 61,000 young people were actively looking for full-time work. There had been a drop since August when the figures were 65,900, but when you look at the figures, those monthly reports, they are regularly above 60,000. It is a tragedy for young people to start life in this way. The overall youth unemployment rate is about 26 per cent around the country.

In my state of New South Wales there are some very worrying figures. In the City of Wollongong, youth unemployment is 41.3 per cent. If you go to the Hunter region, you find that the figures for unemployment for young people aged from 15 to 19 bounce between 16 and 18 per cent, and for young men it is usually a bit above 20 per cent. Again, this is such wasted talent, such a terrible way to start one's life. I bring those two threads together-the high rates of unemployment amongst young people particularly in regional areas and the potential for jobs growth in clean energy. This is where we can give real opportunities for the next generation.

It is worth remembering that in the Our Plan document, released by the Liberal Party in January this year as part of their election campaign, the issue of youth unemployment only got one direct reference and it was that the party has been 'listening'-that is the word, 'listening'-to concerns about youth unemployment. That is totally inadequate, it is insulting. It is damaging not just to those young people but to the very fabric of our society and also our future. A much more detailed focus on this issue is required.

Because I am often talking on this issue about the potential for jobs growth in clean manufacturing and clean energy delivery, one of the frequently cited problems that I do hear concerns the number of skilled employees. There needs to be much more work undertaken by our governments on this. Right now there is a real problem often in the lack of support for apprentices. Many unemployed young people have low levels of literacy and numeracy and so the transition is often limited because of the lack of a skilled workforce.

This brings us to the very important issue of our TAFE system. Vocational education and training has been undermined by policies at both the state and federal level. I always thought it was disappointing that when Labor were in government they did not tighten up how the federal government interacted with state governments. Considering the huge amounts of money that have been handed over to states for TAFE, more conditions could have been put on how that money was to be used in vocational education and training. What we have seen particularly in Victoria, but also increasingly in New South Wales and Queensland and in other states, is the dumping of TAFE into competition with low-cost, low-quality private providers where it is then a race to the bottom in terms of the types of courses that are provided, and that long-term planning that we so need when developing a skilled workforce is lost. In New South Wales, the O'Farrell government has cut $800 million out of future TAFE budgets and it has cut 800 jobs. Many of those jobs are in the Hunter and Illawarra areas that I have just spoken about. By far the majority of those jobs are across regional Australia.

This destruction of TAFE-and I do not use those words lightly because I find it very troubling when one has to describe public education in that way-is what is happening right at the moment. The undermining of this wonderful public vocational education and training institution is damaging the very strength of our economy. Many young people do not have work opportunities now. Where can they go to gain the skills that they need and that our economy so desperately needs?

There are many things that the federal government can do in terms of its interaction with TAFE so that competition with the quite weak and profit-driven private providers is removed. The federal government can also be a powerful catalyst for change in terms of bringing forward a regulatory environment in the marketplace for a shift to renewable energy. That is now under a very urgent time frame. Initiatives are needed to target coal-dependent areas like the Hunter and the Illawarra, and work on the transition to that clean energy economy that we know can deliver such a jobs-rich future.

The mining industry, as I set out at the beginning of my contribution tonight, has been very deceptive in how it presents itself. We need to be more accurate here in terms of what the mining industry is actually doing to our economy. It is driving up the exchange rate and it is also driving up the cost of skilled labour for businesses in other sectors, and this has been very damaging particularly to the higher education sector and tourism. It is driving up the price of raw materials used in mining even. We see this particularly with the cost of concrete and other associated costs. And then it is generally driving up the cost of other services particularly construction. This really does distort our economy enormously and, again, further underlines the deception that the mining industry promotes in terms of the myth that it is the very basis of a healthy Australian economy.

The economic policy that the coal industry is based on is designed to serve just one per cent of society, and what I mean by that is that when those people rely on mining profits, this money cannot benefit the majority of people. The old idea of trade-offs between environment and jobs and the economy needs to be reassessed. That no longer works for society at the present time. The environmental challenges are too urgent. The mining industry is taking most of its profits overseas so we need to ensure that mining is not misleading and getting subsidies that it does not warrant. It is time that the government stepped in and worked on a transition so that we can ensure that the next generation does have the jobs it needs for the health of those individuals and the health of our economy and society.

 

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