Since the beginning of the mining boom Australia’s rural sector has lost $61.5 billion in export income. This includes $18.9 billion in 2011-12 alone. These losses have occurred because the mining boom has forced the Australian dollar to historic highs.
The damage the mining boom is doing to other sectors has created what has been dubbed the ‘two speed economy’. The booming mining industry has pushed up the Australian exchange rate and in doing so has cut the export earnings of trade-exposed parts of the economy.
Within the rural sector the cotton growers have lost $1.3 billion in 2011-12 and $2.5 billion over the nine years of the mining boom. Wheat growers have been particularly hard hit losing $3 billion in 2011-12 and $8.3 billion over the boom.
Other important rural sectors have also been impacted. The beef and veal industry has been adversely impacted with exporting income being cut by $2.3 billion in 2011-12 and $8.5 billion over the boom. The sugar industry lost $815 million in 2011-12 and $2.7 billion over the boom.
The idea that any growth in the mining sector will serve to enhance Australia’s income is simply untrue. The macro economy is far more complex, with unintended consequences like the high Australian exchange rate negatively impacting on non-mining sectors – particularly, as has been shown here, the rural sector.
The mining boom has not been managed well. It has been allowed to expand with little consideration for the collateral damage it causes to other sectors of the economy. The rural sector is one part of the economy that has been badly affected. There needs to be a stronger focus on the boom’s full effects rather than a reliance on the simple belief that unrestrained growth in the resource sector is in Australia’s national interest.