I have an opinion piece in today’s National Times on immigration and the mining boom: two of the intersecting challenges that Australia is going to be wrestling with over coming decades.
Boom times need not be a bust, National Times, 9 August 2012
Australia’s resource boom is such a colossal shock that it can be hard to get your head around its many impacts. Try these facts, for example. In Moranbah (Qld), the average house price over the past year has risen from $459,000 to $730,000. Hundreds of Australians now work as fly-in, fly-out workers, including some who have chosen to commute from Bali. The cost of developing the Gorgon gas project will be $43 billion – about the GDP of Lebanon. Historically, Western Australia has had a similar level of inequality to other states. Now, it’s the most unequal jurisdiction in the nation.
With some of my Labor colleagues, I’ve been spending time recently working to better understand the diverse impacts of the mining boom, and thinking about how best to spread the benefits across society. We’ve spoken with mining firms and construction companies, unions and social welfare groups, discussing both the upsides and the challenges.
Some current concerns mirror those from the gold rushes. In 1851, Tasmania’s governor was concerned that so many labourers were leaving his state to work in the mines that there wouldn’t be enough people to work on the farms. In 1852, Victoria’s governor lamented that “the most extravagant rent is paid for the most indifferent accommodation”. And while the Gillard government has had to fight for the Minerals Resource Rent Tax, the debate looks tame alongside the tax conflict that led to the Eureka Stockade.
Immigration was also a hot topic in the 1850s and 1860s, with sometimes shocking racism directed towards Chinese migrants (culminating in the brutal Lambing Flat Riots). Today we have a non-discriminatory migration policy, but the challenge remains of how to make sure that there are enough people to get the job done, while not displacing local workers.
One way that this can occur is through temporary migration – particularly the 457 visa, which allows skilled workers to stay for up to four years. In 2010, my colleague Gary Gray chaired a committee that recommended allowing mega projects a guarantee of a certain number of temporary visas, in exchange for commitments to local employment and training. These guarantees, known as Enterprise Migration Agreements (EMAs), have generated plenty of political controversy over recent months. But judging by our consultations, most people accept that EMAs are going to be one way of making certain that major projects are delivered on time.
Indeed, once you speak with those who are directly involved, the simple dichotomy of “foreigners versus locals” quickly disappears. If a resource project cannot get off the ground without 1700 temporary overseas workers, then the jobs of the 6000 Australians who will work on that project depend on overseas migration.
Temporary migration is also an important way of transferring skills and remittances to people in developing nations. Harvard economist Dani Rodrik has argued that well-managed guest worker programs are as important for helping people in low-income nations as trade and aid. While it’s vital to ensure that these programs don’t undercut Australian wages and conditions, it’s also worth recognising the benefits to a poor nation of having one of its engineers work for a few years in Australia before returning home.
At a time of sky-high minerals prices, companies and policymakers need to make sure that as many Australians as possible are getting a slice of the action. The young mining engineer sitting next to me on the flight from Perth to Brisbane sounded like he was enjoying his six-figure salary and the chance to use the skills he’d learnt at university. But he also told me the story of friends in his home town of Melbourne who had struggled to break into the industry. We need to do more to make mining jobs accessible to Australians in all parts of the country (for example, through job roadshows in areas of higher unemployment).
It’s also vital to train the next generation. Because it’s so capital-intensive, mining has typically had relatively few openings for unskilled workers. But while not everyone can drive a 300-tonne mining truck straight away, there are many opportunities for providing training and apprenticeships to people working in the mining sector. Over coming decades, we’ll move from a high-price mining industry to a high-volume sector.
The effects of the mining boom on housing and employment, migration and taxation are here to stay. But by getting the policy settings right, we can ensure that the benefits of the mining boom really do spread to every corner of the nation.
Andrew Leigh is the federal member for Fraser and deputy chairman of the federal Labor Party’s Spreading the Benefits of the Mining Boom subcommittee. These views are his own.