Originally published in the Daily Telegraph, 28/03/2014.
There was much backslapping and high-fiving amongst our politicians in the NSW Government last week as new ABS data showed our state had the lowest unemployment in the country. But could the political self-congratulation be premature?
While the ABS data tells one story, another is unfolding in the suburbs and the regions, where the human impact of recent job losses paints a more uncertain picture. It’s these recent series of job losses that have raised fears that NSW could be heading for a repeat of the unemployment nightmare of 1992 during Paul Keating’s ‘recession we had to have’.
Confirmation of over 1500 Sydney job losses at Qantas has followed other bad news including around 200 jobs gone at the Alcoa plant in Western Sydney, 190 jobs gone at Downer EDI, and redundancies at the Drayton mine in the Hunter, the latest of more than 2000 NSW jobs lost in mining over the last twelve months.
While the recession of 1992 was a long time ago, it’s important that we remember how bad it was, and take the steps needed to avoid history repeating.
I had just left school back then, and have strong memories of people queuing around the block to apply for the few jobs available. Unemployment rose to over 11 per cent and youth unemployment was over 30 per cent. The number of people out of work in Australia rose to over one million. Few families were left untouched.
The current NSW unemployment rate of 5.8 per cent is welcome but no cause for complacency. It has jumped from just 5.3 per cent a year ago, resulting in nearly 20,000 more people out of work. The NSW Government has also fallen behind its long term jobs target of 1.25 per cent annual employment growth, and is currently tracking at less than one percent. Our state economy is delicately poised and firm action is needed to tip the balance towards more jobs.
Economic reform is a journey, and every journey involves many steps. Here in NSW there are four obvious steps that must be taken to tip the balance and help avoid a repeat of the economic and social dislocation of the jobs crisis of the early 1990s.
Step one is to repeal the Carbon Tax. This should be a no-brainer. It’s a tax on economic activity, and therefore a tax on jobs. It pushes up the cost of energy, a direct and significant business input. Why are some people surprised that since the carbon tax was introduced we have seen factory closures and job losses in energy-intensive industries? To borrow a phrase, who are the ‘deniers’ here?
Step two is repeal of the mining tax. Of course a mining guy like me is going to say that, right? Sure, my sector has an interest in this, because the mining tax is an attack on our biggest export industry.
We should have a massive economic advantage over the rest of the world in mining, attracting investment, generating projects, and creating lots of jobs. Instead, this tax compounds the impact of the carbon tax, scaring mining investment away. That means lost job opportunities for Aussie workers and lost trading opportunities for Aussie businesses. It’s time that it went for good.
Securing the energy future of NSW is step three. Recently announced gas price increases of around 20 percent should be a big wake-up call to everyone, but not a surprise. The warnings have been out there for some time now, but have largely gone unheeded.
It’s important we develop renewable energy, but it’s still expensive and unable to deliver reliable baseload power to meet large-scale demand. Here in NSW, the cheapest and most reliable energy comes from fossil fuels like coal that provides over 80 per cent of NSW electricity. We also have abundant natural gas resources. Coal and gas must be a big part of our energy future.
Attempts by some to demonise coal and gas put our energy supplies at risk. the result will be higher energy prices that turn marginal businesses into loss-making businesses, costing jobs. It’s already starting to happen. In response, NSW needs a clear, long-term energy policy that outlines how we secure the cheapest and most reliable electricity into the future, including coal, gas, and renewables.
Step four is to fix the NSW planning system. It’s broken, and it’s costing jobs. The NSW Government has tried to introduce a new planning system but has been blocked by Labor. This is reckless politics that risks our economic future. We need a planning system that attracts more investment, not less.
This means more big projects that generate large-scale construction and infrastructure activity, like a new airport, and more regional projects like mines that provide local jobs and a business supply chain linking country towns to the suburbs of Sydney. If Labor continues to block a new planning system, the NSW Government must seek meaningful improvements to the current system.
The first two steps require action from the federal Coalition Government. The other two require action from the state Coalition Government. Importantly, all require a constructive and sensible approach from Labor in Opposition. The Labor Party can demonstrate that it still cares about the jobs of working people by walking the journey too.
Taking these four steps will help restore competitiveness and confidence in NSW, giving us our best chance to generate employment and avoid a jobs crisis. It’s time for all sides of politics to put their best foot forward, to ensure the unemployment nightmares of the past are not repeated.
PO Box H367
Australia Square NSW 1215
P: 02 9274 1400
Stephen Galilee will be giving a keynote presentation at the 4th annual Resources Investment Symposium held in Broken Hill, 25-28 May 2014. To find out more about Australia’s most informative mining conference, where lasting relationships are made, click here.