Regions missing mining benefit
SOME regions like Mackay might be benefiting from the mining boom, but the industry won’t carry the national economy, the country’s local governments have been warned.
The 2011-12 State of the Regions Report, commissioned by the Australian Local Government Association and released yesterday, says inequality between Australian regions has been growing for five years as a result of the mining boom.
Evidence suggests this trend is likely to accelerate during the next five years and beyond, it says.
Mackay was one of two regions in Queensland to benefit from the boom, along with the Fitzroy Central West region. All regions of Western Australia and half the New South Wales outer Hunter area also benefited, the report said.
The report said mining made up about 20% of the economy and the other 80% was being adversely affected by the high exchange rate and relatively high interest rates in a “patchwork economy”.
Economist Peter Brain said for those who never looked beyond the headlines, the current mining boom would seem large enough to carry the whole Australian economy with it.
However, this had not been the case, he said.
“We are seeing economic extremes across the country,” Mr Brain said.
“In Queensland, the mining state, times are prosperous in the Bowen Basin and in towns and cities that support the construction boom but by contrast, far north Queensland is doing it tough because recession overseas and the high Australian dollar have hit the tourist trade.”
Mr Brain said the import content of mining construction was high and getting higher as the exchange rate eroded the competitiveness of Australian suppliers.