Did coal help Australia through the GFC? > Check the facts
The Sydney Morning Herald said on Wednesday that “hunger for Australian coal helped power the nation through the global financial crisis.”
Mining was not the economic lifeline for Australia during the global financial crisis (GFC) it’s commonly believed to be. In fact, mining employment fell further than total employment during the GFC. The figure below shows employment from approximately a year prior to the GFC and two years after. It shows that, while mining employment had been growing quickly in the lead up to the GFC, it collapsed substantially immediately after. In comparison, there was only a minor fall in total employment.
Mining and total employment (2008 to 2011)
Source: ABS 6291.0.55.003 Labour Force, Australia, Detailed, Quarterly
The fall in mining employment during the GFC was discussed by then Treasury Secretary, Dr Ken Henry, at Senate Estimate hearings.
“I have heard it said on a number of occasions, in fact I have lost count of the number of times I have heard people say, including senior commentators, that the mining industry saved Australia from recession or, even in less extreme versions of the statement, that the mining industry contributed strongly to Australia avoiding a recession. These statements are not supported by the facts I would have to say.
These facts include:
“In the first six months of 2009, in the immediate aftermath of the shock waves occasioned by the collapse of Lehman Brothers, the Australian mining industry shed 15.2 per cent of its employees. Had every industry in Australia behaved in the same way, our unemployment rate would have increased from 4.6 per cent to 19 per cent in six months. Mining investment collapsed; mining output collapsed. So the Australian mining industry had quite a deep recession while the Australian economy did not have a recession. Suggestions that the Australian mining industry saved the Australian economy from recession are curious, to say the least.”
On the contrary, mining contributed to the downturn experienced by Australia during/after the GFC.
With the Australian dollar going sky high, manufacturing and agriculture had suffered from losses in income followed by losses of markets; mining took many skilled workers and drove wages very high, without contributing to skills training, instead just importing workers on 457 visas when they ran out of local killed labour willing to go to the mines.
Sorry, in the last line “local killed labour” should have been “local skilled labour”.
Mining…2’4% of Australias employment….2.4%
It is reasonable to assume that if this information is available to us now, it was available to Abbott when in opposition, and certainly when in government. If it wasn’t, or isn’t, Abbott is incompetent to be PM. But if he knew, and knows about it, it means that he again lies to us, and works against interests of Australia. This is just one of many facts giving reason to that assumption. Thus, in any case, his position as PM (BTW acquired by deception in my opinion) is untenable. He must resign, or be forced to.