WA’s giant gas hub, Tassie’s forestry debate and Australia’s productivity #researchthatmatters

Will WA’s giant gas hub really be good for the economy?

gasThe Western Australian Government together with Woodside is proposing to build the Browse LNG precinct on James Price Point in the Kimberley region of WA. Recently you may have heard a lot about the environmental consequences of doing so – the area is a known whale migration path – but there has been very little discussion about the economic consequences. The state government claims that the precinct will deliver economic benefits but the evidence to support this is virtually non-existent. In fact, a closer reading of the government’s Strategic Social Impact Assessment shows that the development will:

  • Be a net cost to the taxpayers of WA with the government spending more money supporting it than it will collect in state taxes
  • Rely on up to 97 per cent fly-in fly-out (FIFO) workers and employ very few local workers
  • Reduce the Kimberley’s reputation as a world class tourism destination
  • Place additional demand on already stretched community services such as health and police
  • Significantly drive up the cost of living for the vast majority of local residents who will not be employed, directly or indirectly, by the new development.

It is also curious that the WA government has chosen not to undertake a robust economic modelling exercise for a $30-$45 billion project. Such a decision makes it difficult for the government to promote the benefits of the project when it’s not even clear about the size of it.

Going into bat for the state government is the Chamber of Minerals and Energy. It is always amusing when the only defence of an industry paid lobby group is to attack The Australia Institute’s economic credibility instead of debating the points raised in our analysis.

The industry spokesperson chose to re-heat the “multiplier” argument claiming that the 100,000 people employed directly in WA’s resource sector “has a multiplier conservatively estimated at between four and five. Half a million, nearly 600,000 Australians, principally West Australians, are employed in and around the resource sector.” 

No less than the head of the macro-economic group in the Commonwealth Treasury has dismissed this idea, stating:

“In a well-functioning economy like ours, with unemployment close to its lowest sustainable rate, it is not the case that individual industries are creating jobs, they are simply re-distributing them.”

While there is little doubt that the Browse LNG development has the potential to deliver substantial profits to companies such as Woodside, there is also little doubt that the local community will suffer. The government has been quick to dismiss the environmental concerns raised about the project but it might find it harder to ignore the economic consequences when residents start to experience stretched community services and higher prices and local businesses are crowded out as workers seek higher wages.

To read The Australia Institute’s analysis, click here

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Productivity – lazy workers or lazy analysis?

jobsAustralia’s productivity is back in the news, this time a survey ranking us second worst of 51 countries for productivity growth. But productivity means lots of things to different people and often the discussion is very confused, not least amongst business people.

On a recent visit to Australia the chief executive officer of Royal Dutch Shell, Peter Voser, expressed concern about productivity rates and the cost of labour, arguing for business intervention to make projects more economic. 

Mr Voser like many other people, whether deliberately or inadvertently, mix up productivity, labour shortages, costs, competitiveness and profits; productivity itself is taken to be something to do with the viability of gas investments in Australia. There are hints at a cheap labour agenda. And we have no idea how to define his ‘competitive productivity rates’.

Jennifer Westacott from the Business Council of Australia has referred to Australia as a declining productivity nation.  She referred in particular to work the BCA commissioned on the cost of certain benchmarked projects in Australia and the US with the Australian ones being 30 per cent more costly. Benchmarking when you can pick your own examples makes it easy to show almost anything you like. But costs are not productivity, and productivity has not declined though its growth may well have slowed.

Ms Westacott could have gone to any one of the many data sources and found that Australia’s productivity in terms of GDP per employee (in $US) was US$130,000 compared with the US at US$108,000 in 2011. So Australia’s productivity is 21 per cent higher on this fundamental measure. Put another way, Australia’s productivity is higher than the country which has an industrial relations system our business groups aspire to.

Instead of examining the actual productivity figures reports such as that commissioned by the Australian Human Resources Institute trawl all sorts of databases to find the measures they think are unfavourable to Australia. And their discussion of the Fair Work Act identifies all the measures that might prevent companies reducing their workers’ pay.  Those are then mixed in with the productivity debate.

Businesses may well say high wages reduce their profit and they need government help to lower them. To confuse that with raising productivity is to corrupt the productivity debate. For business, productivity camouflages an argument that is much harder for them to discuss; the argument that business wants more profit at the expense of wage earners.

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Research that matters

TAIIt’s always gratifying when our back catalogue of research is given a new lease on life and in the past fortnight we’ve had reason to be extra pleased. Our research on nanotechnology, legal aid, dog-whistling in politics and the adequacy of unemployment benefits have all had another airing.

Nanotechnology – The Australia Institute is supporting a complaint made to the ACCC by Friends of the Earth regarding claims made by Antaria Limited that the zinc oxide sunscreen ingredient it manufacturers is ‘non-nano’. In 2010 the Institute conducted a survey of community attitudes to labelling of products which contain nano-ingredients and 85 per cent of respondents said that labelling should be compulsory for sunscreens and cosmetics.

To read our paper What you should know about nano, click here

To learn more about the Friends of the Earth case, click here  

Legal aid – Earlier this year we published a paper examining access to legal aid and public perceptions of the legal system. We found that around 490,000 Australians each year miss out on legal help for financial reasons or lack of knowledge. We’re delighted that our research is helping Community Law Australia in its campaign for more funding to improve access to legal services.

To read our paper Justice for all, click here

To learn more about the Community Law Australia campaign, click here

Dog-whistling in politics – The Gillard Government has accused Tony Abbott of dog-whistling by proposing changes to Australia’s racial vilification laws. Back in 2007, the Institute published the first in-depth examination of this dark art used by our politicians.

To read our paper Under the radar: Dog-whistle politics in Australia, click here 

Unemployment benefits – For every 20 people employed in Australia there is around one unemployed person. The role of unemployment benefits is to insulate people from the severe financial hardship of going to work one day and discovering that they no longer have a job. The Institute has updated our earlier paper Are unemployment benefits adequate in Australia? and submitted it to the Senate inquiry which is examining this issue.

To read our paper, click here

If you are in a position to help fund ‘research that matters’ please consider making a tax-deductible donation to The Australia Institute’s Research Fund. Independent ideas can only come from independent funding and it’s only through the support of people who care about progressive ideas that we can do the work that we do. DONATE HERE

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Perception versus reality in Tassie forestry debate

forestry

The Australia Institute has commenced a research project looking at how structural changes in the wider economy are affecting regional economies, using forestry in Tasmania and manufacturing in North-West Melbourne as our case studies.

While our research paper will not be released for another month or so, the survey conducted for this project has revealed some interesting perceptions of the forestry industry in Tasmania.

The survey found the average Tasmanian believes forestry employs around 20 per cent of the state’s workforce when in reality it accounts for around one per cent. Similarly, while forest products account for nine per cent of Tasmania’s exports, survey respondents estimated it to be 36 per cent.

Survey respondents were also asked for their views on where the government should be prioritising its spending. Around two thirds of Tasmanians indicated they would prefer to see money spent on health, education or supporting other industries such as tourism.

Tasmania and North-West Melbourne are heavily identified by residents and the rest of Australia with forestry and manufacturing respectively. Both will experience rapid change in the coming decade and offer an opportunity to examine the future economic opportunities for regional Australia. Hopefully our research will help improve the debate about the design of industry policy in Australia.

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Date announced for national Go Home On Time Day 2012

work

This year’s national Go Home On Time Day will be held on Wednesday 21 November. Go Home On Time Day, now in its fourth year, is an initiative of The Australia Institute which aims to raise awareness of the extent of overwork in Australia and its important workplace, health and social consequences.

For at least one day of the year, Australians are urged to say no to last minute meetings, resist the urge to check emails on their smartphone and win back some work/life balance.

Research conducted for previous Go Home On Time days found:

  • Each year, Australians work more than 2 billion hours of unpaid overtime
  • That’s the equivalent of donating $72 billion worth of unpaid overtime to employers
  • Only one in five Australian workers are working the hours they want to work, with one in two preferring to work fewer hours even if that means a pay cut
  • Time with family, physical exercise and healthy meals are common casualties of overwork
  • Australians work three times more hours of unpaid overtime than they volunteer to community organisations.

This year’s research will focus on the issue of job security and in particular how the casualisation of employment is affecting workers.

Check out our Go Home On Time Day Facebook page which will keep you updated about the day. Encourage your friends, family and colleagues to participate by sharing the event.

If you would like to know more about national Go Home On Time Day, or if your organisation is interested in becoming a partner, please email us at mail@tai.org.au.

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Events

calendar

The end of growth: Richard Heinberg

The Post Carbon Institute’s Senior Fellow Richard Heinberg will be in Australia in September conducting a speaking tour about peak oil and the economy of the future. Author of ten books, including The End of Growth, Richard will discuss the need to transition away from fossil fuels.

His tour is being sponsored by Sustainable Population Australia and will travel to most capital cities.

  • Brisbane Friday 14 September, Abel Smith Theatre, University of Queensland, St Lucia Campus 6.00pm
  • Sydney Tuesday 18, Guthrie Theatre, University of Technology 6.30pm
  • Canberra Friday 21, Manning Clark Theatre 2, ANU 7.00pm
  • Melbourne Saturday 22, Wheeler Centre, 176 Little Lonsdale St, Melbourne 7.00pm
  • Adelaide Tuesday 25, Barbara Hanrahan Bldg, UniSA West Campus 7.00pm
  • Perth Thursday 27, Wesfarmers Lecture Theatre, UWA Business School,Hackett Drive, Crawley 6.00pm
  • Sydney Saturday 29, Sydney Opera House, Festival of Dangerous Ideas 2.00pm

To find out more about the tour, click here

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Recent Publications

TAI

Inquiry into the allowance payment system for jobseekers and others, D Richardson, 9 August

James Price Point: An economic analysis of the Browse LNG project, M Grudnoff, 9 August

All the lonely people: Loneliness in Australia, 2001-2009, D Baker, 29 June

Submission on Arrow Energy’s Gladstone LNG Plant proposal, M Grudnoff, 29 May

For a full list of our publications, click here. All papers can be downloaded for free.

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Recent Media

news 

Super subsidies: a budget spending secret, The Canberra Times, 7 August

The rise of the climate sceptics, Crikey, 6 August

Hurting the community, The Canberra Times, 4 August

Time to untangle the web of renewable energy policies, Crikey, 3 August

What we don’t know can hinder us, Australian Financial Review, 25 July

Lower cost, lower cover, The Canberra Times, 21 July

Why pick green power under new pricing model? The Canberra Times, 14 July

What nobody wants to say about the carbon tax package, Crikey, 10 July

‘KPIs’ have little relevance in managing our health system, The Canberra Times, 7 July

All the lonely people, Online Opinion, 2 July

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General Enquiries

02 6130 0530

mail@australiainstitute.org.au

Media Enquiries

Jake Wishart Senior Media Adviser

0413 208 134

jake@australiainstitute.org.au

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