Prev
Next

Busting myths about the mining boom

Jessica Irvine

by Jessica Irvine

10 Sep 05:50am

Must Reads

The Punch is moving house - this is a caption

The Punch is moving house

385

Will Pope Francis have the vision to tackle this? - this is a caption

Will Pope Francis have the vision to tackle this?

122

Advocating risk management is not “victim blaming” - this is a caption

Advocating risk management is not “victim blaming”

251

Filed under: Economics, Economy, Inflation, Jobs, Mining, Reserve Bank

45 comments

We’ve been here before. Amid all the breathless commentary about the end of the mining boom, it pays to recall some economic history. Australians are no strangers to the boom and bust cycle of our “golden soil and wealth for toil”.

'It's gonna be thiiiiis big… Pic: News.com.au

In an excellent speech delivered two years ago, but still relevant today, then Reserve Bank deputy governor Ric Battellino recounted the full story.

The gold rush days of the 1850s marked Australia’s first adventure in mining frenzy, following a similar gold rush in California in the late 1840s. Gold was discovered first near Bathurst in New South Wales, but discoveries were also made in Victoria shortly after.

Such was the frenzy, by 1852 mining output made up about 35 per cent of Australia’s total economic output, compared to about 7 per cent today. Workers streamed to the gold fields. In three years, wages in Victoria rose 250 per cent. Meanwhile, the male population of Tasmania shrank 17 per cent and 3 per cent in South Australia. The number of manufacturing establishments in NSW shrank from 165 to 140.

In the 1890s, further mineral discoveries were made in Western Australia and western New South Wales. WA’s population more than trebled. Exports of wool and grain stagnated. Costs rose. Inflation reared its ugly head again. Eventually the boom petered out.

The 20th century saw two distinct mining booms, in the 1960s and early 1970s thanks to higher prices for coal and iron ore, and again in the late 1970s and early 1980s.

Both booms ended in an inflationary puff.

History shows mining booms have brought great increases in living standards but also great upheaval for people and jobs.

Large-scale structural change can happen quickly.

The present mining boom, which began in 2005, has been no different.

But the Australian economy today has several important advantages in managing mining booms compared to previous booms. And these policy strengths stand us in good stead should the recent drop in commodity prices be sustained.

First, the deregulation of the Australian workforce and the end of centralised wage fixation means very high wages in the mining sector have not been automatically transferred across the economy. Instead, rising wages in mining have acted as a good relative price signal to encourage workers to transfer to more high-value jobs.

Second, Australia’s floating exchange rate has acted as a safety valve for inflation pressure. A higher dollar has made imported goods such as TVs, clothing and cars cheaper. And by putting the squeeze on manufacturing, tourism and education industries, the high dollar has freed up labour, capping upward pressure on wages.

While economists have sympathy for the people who lose their jobs in this “structural change”, the harsh truth is that if the high dollar hadn’t led to job losses, inflation would have been higher. Inflation raises the cost of living and erodes wages.

Third, the Reserve Bank has been free politically to adjust interest rates to both constrain the boom and, if needed, to ease the bust. At 3.5 per cent, the official cash rate has plenty of room to fall to stimulate growth if China and the mining boom fade.

Armed with this policy ammunition, there is less cause to fear the end of the mining boom. It is true an end to the boom would be felt acutely in the mining-rich regions of Western Australia and Queensland which have for most of their history keenly felt mining booms and busts.

But nationally, only 2 per cent of Australians are employed directly in mining. The majority of us make a living buying and selling to other Australians.

There will be life after this boom.

Comments on this post will close at 8pm.

Most commented

45 comments

Show oldest | newest first

    • MD says:

      09:02am | 10/09/12

      Sure only 2% are employed directly, but a hell of a lot more are employed in supporting industries and services. Using that 2% figure as a baseline for who will be affected is terribly misleading.

      Reply

    • Richard says:

      09:33am | 10/09/12

      And the fact is, with the death of manufacturing, and the slowdown in tourism and tertiary education, mining and agriculture are our only big export earners left. You can’t have an economy were everyone just circle jerks each other round and round and round. You need to bring money into the country by selling stuff to people overseas. That’s how national prosperity gets engendered.

    • Michael N says:

      10:32am | 10/09/12

      @ MD - I think you missed the point; a flexible workforce is the key.

      @ Richard - whilst I’m not sure that the author was speaking literally when she alluded to the services industry, if people are willing to pay for it, we can very easily retain our prosperity by circle jerking each other. This would in turn be our tradable export as we’d likely get very good at it thereby affording us the comparative advantage that you would like.

    • Babylon says:

      11:21am | 10/09/12

      MD

      It’s an established fact that the indirect benefit of the Mining Boom is 10 times that 2 percent.

      Mining is the 4th Biggest contributor to the Australian economy in direct and indirect terms, because it keeps transport, Export markets, Finance and Banking, Consulting, Administration and Fabrication and manufacturing working,

      The fact that Gillardites are arguing that it’s not significant is a clear indication that they know they have killed it with their MRRT and Carbon taxes. So they are playing it’s slow strangling death down.

      Despite huge carbon protection monies, places like OneSteel and Fortescue Metals are shedding thousands of jobs. BHP is ramping up some bad news on top of the Olympic Dam. Behind the scenes contractors are being laid off and smaller Mining projects are off the boil.

      History will record that the Gillard Government killed the biggest Mining boom every, one that was “the envy of the world’ and was” a once in a generation” oddity.

    • Economist says:

      12:26pm | 10/09/12

      So Babylon what are the 3 sectors ahead of mining? Services (financial/ health/government), Manufacturing?

      Please enlighten me.

    • Bob Stewart, the Elder says:

      09:04am | 10/09/12

      Time now to shuffle the deck again. Concurrently with the projected softening of the mining sector, a re direction of our energy is needed to balance the change.. Part of the 5 million tonnes of LNG exports should be diverted to both steel production or other metals as merchant billets. 
      It makes no sense to ship out huge quantities of both the ore and the energy together. For when there are no more holes in the ground and an eerie silence has settled over the landscape the energy will be needed to process the scrap

      Reply

    • Gregg says:

      09:25am | 10/09/12

      It is one thing to produce steel or other metal Bob but another to be able to produce at a cost that will be competitive internationally.

      The reason for the export of raw materials and production overseas is that it is obviously a lot cheaper for the overseas countries to do it in their countries and no doubt that would be so given wages and other standards disparity.

      Just like the live animal trade, you need customers to drive a demand.
      Meanwhile, it is us alive that are knackered.

    • bananabender says:

      09:48am | 10/09/12

      “Part of the 5 million tonnes of LNG exports should be diverted to both steel production or other metals as merchant billets. “

      No one has developed a viable commercial process to make steel using gas. 

      There is already a glut of steel.

      The Pilbara has a least another 500 years of iron ore at current production rates.

    • Tubesteak says:

      09:07am | 10/09/12

      I have been reliably informed from those studying this that there will be another commodities super-cycle by the end of the year. Also, China is not busting. They are still running at about 8% growth. Even a mild slowdown to 6% still means they are growing nicely even though that is technically a recession for them. India is also growing.

      All the projects that The Australian likes to tout as being scrapped were never committed projects. They were merely proposals that had a very long timeline for starting up.

      It’s doesn’t look like any crunch is going to happen any time soon. And definitely nothing that will hurt our overall economy. It’s really just scaremongering from certain vested interests who like to flog a few extra copies of newspapers by muck-raking.

      Reply

    • Richard says:

      09:29am | 10/09/12

      Well, according to legendary investor Jim Rogers, we should be very very worried about the world economy in 2013 and 2014 indeed. America’s and Europe’s unsolvable debt problems will come to a head, which are the two biggest economies in the world, there’s no way that can’t affect Asia. Problem is also that China is a command economy, which means there’s been so much misallocation of capital and resources that needs to be corrected, so China is going to have a correction a.k.a a recession at some point, it’s foolish to think they won’t.

    • Gregg says:

      09:35am | 10/09/12

      I have been reliably informed too that China has a heap of problems which do not really get too much air time, just a few as examples:
      . ships being built without orders.
      . ghost investment cities being constructed, services and fitouts also ghostly as well.
      . export demand has fallen thanks to GFC and lower income residents are being encouraged into taking loans for purchases.
      That sound familiar does it? and same has been happening in India for quite a few years with a very high farmer suicide rate resulting.

      A lot of Chinese manufacturing and development of resource projects, including those in Australia was geared to a Chinese growth in the teens% leading up to the Olympics and thus with much lower growth there’ll be a surplus.
      With that situation, you shop around for best supply situation and the high $A, high Australian production cost and MRRT/Carbon taxes will all mean Australia will fall away from competing with the best.

      The crunch will get you sooner than you may well hope.

    • bananabender says:

      10:12am | 10/09/12

      Try talking to executives in the mining industry before making such ludicrous statements. The boom is well and truly over. Many of those mines in production are now struggling just to stay afloat.

      There will be no supercycle. ,China is already selling steel well below production cost. They are planning to close 10-20% of steel production in the next few months.

      There are enough empty apartments in China to house 200 million people. The Chinese economy is nothing but a speculative bubble created by cheap loans to pro-government companies.

      Many projects, including Olympic Dam, WERE committed before being suddenly cancelled.

      Btw China has the worlds largest coal reserves and India has some of the largest iron ore reserves. Once these are developed they will be much less reliant on Australia.

    • Tubesteak says:

      10:31am | 10/09/12

      Richard
      The Chinese is only into the European and American economies by a small margin. This is without further fiscal stimulus. They have enough of their own people, too, to stimulate their own demand. Something to the tune of 300 million people yet to move into the middle class. Just because they are a command economy doesn’t mean they have massive inefficiency that will be corrected. That old axiom about demand always applies. As I said, running at 6% growth is still extremely fast but technically a recession for China.

      Gregg
      China works well in advance of demand. They build ships and cities that may not be needed for quite some time. Unless Australia that build things about 20 years after they were critically needed. China can survive in the medium-term on internal demand. That is how they have decided to focus. They don’t worry too much about external demand. No-one banked on a Chinese growth rate in the teens. No-one ever thought it would be above 10%. Most people had concerns when it went above 9% at one stage. The high $A is what is helping us from getting too far ahead of ourselves. Our trend rate sees us about the high 90s for some time to come. High production costs have been a mainstay throughout our entire boom. It isn’t going to crunch us now. As I’ve said last week, slower demand for our resources just means they’ll stay in the ground until prices rise and we profit then. Delayed gratification.

      bananabender
      A lot of it is coming from mining execs. None of them have said the boom is over. They are refuting the claims from The Australian, too. Olympic Dam was not committed.

    • acotrel says:

      09:18am | 10/09/12

      I wonder where Clive’s and Gina’s billions are invested ? - Australian manufacturing industry ?

      Reply

    • M says:

      09:34am | 10/09/12

      They would be if you and your union thugs hadn’t inflated wages so far and so fast as to make manufacturing uncompetitive.

    • Gregg says:

      09:39am | 10/09/12

      Any mining magnate or other billionaire usually has their wealth rated on the value basis of the industries that they have interests in, be it via virtue of minerals deposits of leases held or company shares values.

      Your inference that they have accounts of $$$billions invested here and there is rather fetching.

    • AdamC says:

      09:52am | 10/09/12

      @acotrel, I think you will find that, perhaps unsurprisingly, most of the wealth of those ‘mining billionaires’ is tied up in mining.

    • Tim says:

      10:29am | 10/09/12

      M,
      Yeah they should work for $2 a day.

      Manufacturing is dead because of the high Aussie dollar.

      And what has caused the high dollar? Mining.

    • M says:

      10:42am | 10/09/12

      Damn straight they should. The africans can do it, why can’t we?

    • Gregg says:

      11:06am | 10/09/12

      @Tim
      ” Manufacturing is dead because of the high Aussie dollar. “
      Another myth pushed by Labor Tim and Australian manufacturing has been   progressively dying for decades now, from well before the current mining boom.
      It is simply put far cheaper to manufacture in low labour cost countries, some with sweat shops using ten year old kids as are also used in some farming.

      That is one of the reasons all our TVs and many other goods are imported and sure a high $A might make things even cheaper but it is still our labour cost that sees government handouts to industries very necessary to keep them afloat.

      Where do you reckon some of that money comes from?
      Just the mining industry and so kill that off and the dying continues.

    • Babylon says:

      11:34am | 10/09/12

      Aaaah the Labor Parties fictitious ‘Upper Class’ that we need their protection from. This evil upper Class that conspires to economically enslave the Australian working man.

      So if my cousin makes it to the Board of Directors and buys a house on the North Shore, by the Labor Parties reckoning he’s now my deadly enemy?

      (Ironic really because Gillard and Swan are actually as rich as Skunks now)

      Naw, crap. The biggest enemy to the Australian working man is not our Entrepreneurs that create jobs, but the Gillard Government that would:

      - introduce the first and most expensive carbon tax, that threatens the economics of our home budgets.
      - introduce a carbon tax that increases operating costs and so threatens working Australian jobs
      - ship in cheap Labor using 457 temporary visas to take Australian worker jobs
      - allow the rorting of Labor dues from it’s industrial arm without any investigation
      - Fail to regulate the Banks such, that they are forced to pass on rate cuts
      - Borrow so much money on our behalf ($300 Billion) that the interest forces up our cost of living to the extent that we are the 3rd most expensive place to live in the world.

      There is no fictitious Upper Class enemy, there’s just Gillard and Swan

    • Gregg says:

      09:19am | 10/09/12

      I hardly feel we should compare gold rush days with boom, bust and demise of Australia manufacturing post industrial revolution.

      There is some very wishful thinking going on for those who feel all will be hokey dokey post current boom.

      Mining industry high paid jobs are not necessarily high value jobs and it is not just the mining industry that has seen something of a wages explosion, the Victorian desalination plant site one example and anyone seeking services that involve trade work will know it is far above being cheap.
      The demise of mining work may just see many more out of work with a significant flow on into support service industries, no way to sugar coat that.

      The high $A has certainly not helped manufacturing, tourism and education nor any other exports such as from agriculture and associated losses also just add to unemployment, the move of unemployed to mining and support industries likely to have been minor and will only be for as long as the boom remains, effect on wages also likely minor given award rates.

      ” While economists have sympathy for the people who lose their jobs in this “structural change”, the harsh truth is that if the high dollar hadn’t led to job losses, inflation would have been higher. Inflation raises the cost of living and erodes wages. “
      Economists may want to get out and see how a lot of people do fare with current costs of living, it not just being the high $A that is creating job losses but people just spending less because of being unemployed and also on electives because of the high cost of basics

      ” Third, the Reserve Bank has been free politically to adjust interest rates to both constrain the boom and, if needed, to ease the bust. At 3.5 per cent, the official cash rate has plenty of room to fall to stimulate growth if China and the mining boom fade. “
      We do have a two speed economy and on one hand the Reserve Bank can have minimal control on the mining boom for that will be driven by international demand and our own government decisions that can make Australia internationally less competitive.
      As the mining activity dives, playing around with interest rates is likely to have a minimal impact if even more are unemployed and have less disposable income.

      ” There will be life after this boom. “
      Certainly will be but just what a life will remain to be seen as the trend to limited manufacturing in Australia continues.
      We may not see people working for $2 a day and then we’ll likely see more and more not doing too much at all!

      Reply

    • acotrel says:

      10:03am | 10/09/12

      I believe there are things we can do to maintain our technology base.  In the UK the kit car industry is bigger than the rural sector in its contribution to the economy.  In Australia we have motor sport controlling bodies which pander to importers, and there are very few ‘constructors’ events.  The Chinese are providing components which would allow small businesses to build race vehicles, but we cannot take advantage - the result - opportunity lost.  I know this sounds like a frivoulous pastime, but simliar comments can be made about several areas with potential.

    • M says:

      12:41pm | 10/09/12

      Problem is that motorsport is a bit of an oddity over here acotrel. And if you were to promote anything to do with racing the hand wringers, environmentalists and the nanny staters would all get their knickers in a twist. That, and it’s usually a sport for those with deep pockets.

    • Stephen says:

      09:26am | 10/09/12

      There was a mining boom?

      Must have missed it.

      Reply

    • AdamC says:

      09:46am | 10/09/12

      I agree with most of this.This latest mining boom has occurred at a time when the Australian economy would otherwise be under huge pressure. Our cushy terms of trade have, quite possibly, saved us from recession. If the serendipity continues, the end of the mining investment boom - which still has a way to run thanks to the pipeline of work - will coincide with a recovery in the global economy.

      Australia has a lot of unfinished business when it comes to economic reforms. Taxation and industrial relations stick out as particularly overdue. (However, as this cracker of an article suggests, education should perhaps be the first priority for reform: http://www.theaustralian.com.au/national-affairs/opinion/rethink-the-way-we-teach-kids-to-achieve-maximum-productivity/story-e6frgd0x-1226467553492).

      Australian history suggests that people are only prepared to accept large-scale reforms, such as floating the currency, implementing the GST, etc, when our terms of trade are near cyclical lows. As it stands, thanks to our overvalued currency, your average Aussie bogan can head off to Bali on a cheap flight and live like a Princess a la Rhonda from the AAMI ads. In that context, I can understand why political parties are unwilling to pitch policies that may have winners and losers.

      I guess my point is, there are upsides to downturns.

      Reply

    • Gregg says:

      11:28am | 10/09/12

      @Adam C
      “If the serendipity continues, the end of the mining investment boom - which still has a way to run thanks to the pipeline of work - will coincide with a recovery in the global economy. “
      Not only a big IF there Adam but more a down side double dip for what will be happening as the demand for resources drops off is that the big international financial $$$$ stop being committed and so that pipeline Wayne Swann and Julia &Co;. often make a reference to will dry up, even some development underway being put into mothballs for who knows when.

      It is not just mining that can happen to and ironically, that biggest of dirty brown coal fired power stations, Hazelwood PS back in early sixties was a stop/go project owing to recession and $$$.
      Just as ironically, the latest Labor backflip on paying to have it closed down may in fact be a god send for coal fired power stations do have a life, usually about 30 years and a bit in older times.
      Hazelwood is certainly well beyond that and has been given extended life through a number of refurbishment exercises but it cannot keep operating forever, just the increased distances from coal needs to be extracted being another factor in its longevity.

      For the mining projects and projects not proceeded with or mothballed, going on with them will mean further financial analysis and the MRRT and Carbon Taxes will certainly come into consideration along with high Labour costs to seeing what our internationally competitive position is.

      Wayne’s favourite new whipping post, Gina Rhinehart may use strong and incorrect descriptions re $2/d labour costs but she does make a valid point re the cost of doing mining business in Australia.

      Another favourite myth of Gillard is the benefits of higher level education and sadly, that’ll not help make Australia more competitive and in fact you do not need more people with degree qualifications of one sort or another to have people suitable for operations in most industries including mining.

    • Anna C says:

      09:54am | 10/09/12

      This mining boom is over and soon our economy will be bust.

      Reply

    • M says:

      11:18am | 10/09/12

      Thank god. Hopefully ouse prices will come down a bit.

    • Anna C says:

      12:45pm | 10/09/12

      I can’t wait to see all the property investors running for the exits especially the non-resident Chinese property investors who seem to be buying up big in my area and sending property prices sky high.

    • M says:

      01:27pm | 10/09/12

      3% caused the sub prime crisis. Imagine what’s going to happen here.

    • Ship of Fools says:

      03:36pm | 10/09/12

      @ M, 

      Now that your thanking god, can you tell every body how you intend to pay off Australia’s massive net foreign debt?

    • M says:

      03:42pm | 10/09/12

      What massive debt?

    • Little Joe says:

      10:08am | 10/09/12

      Dear Jessica
      “The present mining boom, which began in 2005, has been no different.”

      So finally we have a journalist that acknowledges that the mining boom only occurred in the last two years of the Howard Government. That’s nice!!! Now all we need is a journalist to say that the prices for most commodities over most of the past 3-years have been higher than throughout the Howard Government and we would be getting closer to the real truth of this financially incompetent Government.

      “Large-scale structural change can happen quickly.” …. but often doesn’t. Capitalisation of projects takes time and infrastructure takes time to build. Re-training takes time and resources, and there is also the financial loss through the redundancy of technical skills.

      Over the past five years many manufacturing companies have written off millions of dollars in manufacturing assets …. simply redundant because their competitors can undercut them with cheap imports. So if the $AU drops to $US0.75 do you think that an Australian Manufacturer will recapitalize and hire/re-train only to have to fight with unions every few years. I doubt that!!! Most will invest overseas …. but this doesn’t stop the Unions bitching and moaning every time there is a factory closure.

      The policy strengths that you describe do show some ignorance in the real world. Very high wages in the mining sector have transferred to very high wages in some sectors in the economy, especially machinery operators, trades and tertiary qualifies persons, who are demanding very high wages resulting in inflationary pressure in urban centers.

      Then we have “Putting the squeeze on manufacturing, tourism and education industries” …. interesting phraseology for sending companies bankrupt.

      Then we have “The high dollar has freed up labour, capping upward pressure on wages.” …. interesting phraseology for making people unemployed or underemployed. For many of the people employed in the manufacturing, tourism and education industries, their qualifications/experience are not readily transferable to the mining sector. I am also glad that you are sympathetic towards people who lost their jobs, but I am wondering how you would describe the relative impact of cost of living and erosion of wages when comparing unemployment to inflation.

      Then there is the statement pertaining to Movement of Interest Rates. This is something that the Australian economy holds as an ‘ACE’ but it must always be remembered that it is not how much the RBA is willing to drop interest rates but how much lenders are willing to pass on. Of course lowering interest rates will not help retirees, but see them move quickly onto pensions.

      Then we have the current myth about inflation ….. yes it is low and you correctly point towards the impact of the high Australian Dollar. The reality is that most Australians are not affected by much many of the factors that are applied to Australia’s inflation calculations. Increases in rent, fruit/vegetables, electricity and bread …. items that impact us all every week ….. are covered up with decreases in electronic goods and overseas holidays. Hence the overall inflationary impact on most Australians is probably significantly higher than what could be interpreted by the RBA’s Assessment.

      There are other impacts such as miners and other workers over extending themselves financially …. in 2008 this resulted in a lot of ‘BLING’ being offloaded and dumped on the market. This is OK, but if it extends to housing we will witness severe financial anxiety. 

      There will be life after this boom ….. but with the debt that the Labor Government has racked up it doesn’t look very rosy!!! Remember, the money for the MRRT has been spent .... not saved or put towards paying off debt. The falling iron ore price will most certainly impact on these revenues resulting in severe pressure on the budget.

      Reply

    • LFlawse says:

      10:16am | 10/09/12

      “Second, Australia’s floating exchange rate has acted as a safety valve for inflation pressure.”

      This baloney has got to stop.  Our safety valve has been that we have amongst the highest natural resources er head of population in the world AND we are willing to flog our ASSETS off wholesale to foreigners to fund our consumption.

      We have sold off 80 odd % of our mining industry, pretty much all of our secondary industry, all our food chain outside the farm gate, and now all our food chain inside the farm gate is up for grabs….no questions asked.

      If the floating exchange rate were the sole safety valve, after 53 years (except 1971)of Current Account Deficits we wouldn’t be able to afford any Flat Screen TV’s!!!!
      Maybe we would be a better people as a result!!!!

      Reply

    • AdamC says:

      11:15am | 10/09/12

      Natural resources only really assist when prices are high. When resource prices are low, mining and energy are just like any other sector.

      More broadly, I do not understand your contention. If doing things like floating the dollar and being open to foreign investment are so bad, why has our economy performed so well across the cycle of commodity prices? Australia was one of the few countries to grow through the early noughties recession, for example, at a time when commodity prices were at rock bottom?

      I think some peoople need to get off the doom and gloom. It seems to be quite addictive!

    • richard says:

      10:45am | 10/09/12

      Everyone always talks about “the strong Australian dollar”, but in fact it’s not strong, indeed it’s weakening even right now. It’s just that the US$ and the Euro and many other fiat currencies are ALSO weakening, because they are firing up the printing presses at both the Fed and the ECB. Remember, inflation is always and in every instance a monetary phenomenon… consumer price rises are just the symptom of inflation. Symptoms can be masked, symptoms can be suppressed, but the underlying disease is a disease none the less. So the Australian dollar looks strong, but actually, it’s quite weak, and weakening, when measured next to something constant, like gold. This is how weakness in the world economy can affect our economy in seemingly unconnected ways. The inter relation of all things makes economics an unfathomably tricky business, which is why central planning and command economics can never work, because of the law of unintended consequences. Therefore, we must always rely on the free market, imperfect as it is, because it is better at allocating capital and resources efficiently in the long run than the fly off well-intentioned but ultimately ruinous central planning.

      Reply

    • Aussie Wazza says:

      11:13am | 10/09/12

      Soon, the way things are going, we will be slaves in our own land.

      Reply

    • Esteban says:

      01:12pm | 10/09/12

      Even this Govt couldn’t achieve that in 2 terms Aussie.

    • Babylon says:

      11:42am | 10/09/12

      Ferguson: the Mining Boom is over. Gillard: the Mining Boom is not over

      The Gillard Government says the Mining boom is over, its not, but its over, they say.

      The Gillard Government says the Mining boom is on, but off and it’s not over.

      The Gillard Government says the Mining boom is off, but it’s not over, because its on, even though it’s over.

      Look the Gillard Government says the Mining Boom is OnOff OnOff On On Off.

      Trust em, they are managing the economy they know what they know and they know what they are doing ???  :(

      Reply

    • Ship of Fools says:

      03:08pm | 10/09/12

      The absolute biggest load of rubbish going around is that the Australian mining boom is the reason for Australia’s apparent prosperity. 

      While the wages and taxes are a significant contributor to Australia’s wealth people must realise that most of the profits and much of the spending from the mining boom has gone offshore to the mining industries foreign owners and in the form of large equipment orders.

      It is time that the Australian people faced up to the fact that Australia’s apparent prosperity over the last 20 years or so has been largely due to the effect of borrowing an extra 30 to 40 billion dollars a year from overseas to build the Australian housing bubble.  But this apparent wealth is just that, apparent as it is based on borrowed money, borrowed money that must be paid back.  And people must realise that because this money has been borrowed by our banks it is for all practical purposes government and therefor taxpayer guaranteed.

      People must stop calling Australia a rich country because of its mining industry expecting that the country can continue throw around billions of dollars in generous entiltlement programs and international charity programs.  Australia is in fact a country that is very, very heavily in debt, owing about 750 billion dollars overseas, that is 35,000 dollars for each man, woman and child.

      Reply

    • M says:

      03:48pm | 10/09/12

      That’s rubbish. Houses double in price every 7-10 years. There is no risk what so ever of australia’s property market crashing.

    • wakeuppls says:

      04:52pm | 10/09/12

      M

      I hope that is sarcasm.

    • bananabender says:

      05:50pm | 10/09/12

      @M,

      housing prices didn’t rise at all between 1890-1950.

      The doubling of prices every 7-10 years only occurred between 1970-2005.  House prices are currently falling slowly as the baby boomers approach retirement.

    • just shut up ! says:

      04:27pm | 10/09/12

      economics is the cycle of boom and bust.
      romance is the cycle of room and bust

      Reply
 
Sorry, comments are now closed for this article.

Facebook Recommendations

Read all about it

Punch live

Up to the minute Twitter chatter

See all tweets

Recent posts

The latest and greatest

The Punch is moving house

by The Punch Team

385

The Punch is moving house

Good morning Punchers. After four years of excellent fun and great conversation, this is the final post…

Will Pope Francis have the vision to tackle this?

by Hannah Harborow

122

Will Pope Francis have the vision to tackle this?

I have had some close calls, one that involved what looked to me like an AK47 pointed my way, followed…

Advocating risk management is not “victim blaming”

by Sarrah Le Marquand

251

Advocating risk management is not “victim blaming”

In a world in which there are still people who subscribe to the vile notion that certain victims of sexual…

Nosebleed Section

choice ringside rantings

From: Hasbro, go straight to gaol, do not pass go

Tim says:

They should update other things in the game too. Instead of a get out of jail free card, they should have a Dodgy Lawyer card that not only gets you out of jail straight away but also gives you a fat payout in compensation for daring to arrest you in the first place. Instead of getting a hotel when you… [read more]

From: A guide to summer festivals especially if you wouldn’t go

Kel says:

If you want a festival for older people or for families alike, get amongst the respectable punters at Bluesfest. A truly amazing festival experience to be had of ALL AGES. And all the young "festivalgoers" usually write themselves off on the first night, only to never hear from them again the rest of… [read more]

Light weight

Gentle jabs to the ribs

Superman needs saving

Superman needs saving

Can somebody please save Superman? He seems to be going through a bit of a crisis. Eighteen months ago,… Read more

28 comments

Newsletter

Read all about it

Sign up to the free News.com.au newsletter