… I know it’s very frustrating for people who live and operate businesses in Muswellbrook to be surrounded by all the wealth that’s being generated. As you mentioned, every train that goes out is $1.5 million going out. The trains now are just constant, because the mines are expanding. … Visually, the people of Muswellbrook are seeing the money leaving town.
The mining industry built a number of towns in regional Australia. From Bendigo to Broken Hill, Kalgoorlie to Mount Isa, and, in later years, South Australia’s Roxby Downs. These towns owe their very existence to the mining sector, which invested heavily in settling workers in the regions, building infrastructure and supporting communities to grow.
Every town or city in Australia has a story to tell as to what is their reason to be there. What was the reason for the commerce that built the houses, the businesses, the roads, the schools. For Ballarat it was gold, for Sydney it was a penal colony and now it is the hub of a service industry, for Rockhampton it was minerals, then beef. But towns are only built if the wealth of their hinterland is invested in the hub, town or regional city. Businesses only survive if they have cash. Cash comes from someone creating wealth from a source of endeavour. Australia’s primary source of wealth overwhelmingly is the extraction of minerals and hydrocarbons. Coal, gas, iron ore, gold, uranium, rare earths.
Rural commodities do the same job; they create the wealth for a service industry to circulate, which determines the GDP. But without the initial wealth, the second and tertiary wealth won’t happen and Australia would be dramatically poorer.
But the hub must be near the source to be fair to those who see the wealth as more theirs than a city a long way away or another country even further away. For these local communities the payments from the mining sector must be prompt if any business is to survive. Gunnedah has to see the wealth more than Sydney, and Mackay more than London.
When workers fly in and fly out the wealth flies out with them. When the coal from Moura builds a house on the Gold Coast because that is where the miner lives, then Central Queensland is reduced to merely a hole in the ground. This is neither fair nor tenable. Farmers should be partners in the gas extraction industry not just the source from which the wealth is derived.
Most mining companies don’t even have an office in these towns and make all their decisions in Melbourne, Perth or even London. Changes in company structure and ownership and increasingly complex tender requirements mean less opportunity for local businesses in regional towns to service the mining sector.
Towns like Port Hedland, Gunnedah, Emerald, Moranbah, Cessnock and Coolgardie should be thriving and growing through opportunities offered by the mining sector, especially in light of the recent upswing in the sector. However, visiting towns in mining regions for this inquiry, the story I heard was mixed. It’s the same story I have been hearing for years and years, through mining booms and mining down-turns, a story of missed opportunities. Australia looks with envy at how the wealth from oil built Dallas and Houston but near the equivalent wealth of coal has built no such city in Central Queensland.
People are grateful for the contribution of the mining sector but many feel that more could be done. They watch the massive trains roll out of town, loaded with tons of coal and iron ore, look around them at a town that hasn’t grown and wonder: ‘where’s all the money going?’ If the Big capital cities want to take the pressure off more people moving to them, well this will encourage more cities to grow. If you take the wealth from mining and build a new airport in Sydney, don’t complain if people just want to move to Sydney. Muswellbrook should have 100,000 people instead of 12,000. Gunnedah should be booming and rivalling Tamworth.
Residents and business owners in these towns are not asking for the world. They simply want a fair share of the wealth that’s extracted from the land around them. They want adequate compensation for the impacts of mining company workers and freight. They want a share of royalties invested back into their region to help it grow, thrive and diversify for the future.
But even more than that, regional businesses and individuals told us they want the opportunity to compete for jobs and contracts offered by mining companies. It’s not too much to ask.
I am proud to have been involved with this inquiry and impressed with the breadth of evidence we received. Despite limited time and resources, we managed to visit Darwin, Rockhampton, Mackay, Tamworth, Port Hedland, Kalgoorlie and Singleton. I’d like to thank those communities that welcomed us and all the residents who took the time to tell us their stories.
Regional small and medium businesses were a big focus of this inquiry. This report makes a number of recommendations aimed at improving the capacity of regional businesses to supply the mining sector, ensuring mining companies’ ‘local’ procurement and training is truly local, and addressing some of the barriers to local procurement the Committee identified.
The inquiry also considered the impacts of extended payment terms offered by mining companies to their suppliers. Terms of 60 to 90 days are choking cash-flow and crippling regional businesses. This is why the Committee is recommending the Government revisit the possibility of legislating maximum payment terms.
To make the most of opportunities offered by mining, regional communities need to have access to adequate training opportunities so existing businesses and the mining sector can better co-exist. As such, this report makes recommendations to address skills gaps in regional areas, provide better targeted and more accessible training, and promote innovation through the METS sector.
I’d like to thank all of the businesses, organisations and individuals who gave evidence or made submissions to the inquiry, including those mining companies who chose to contribute. I would also like to take this opportunity to thank the Secretariat for their hard work and support.
Finally, my appreciation goes to my fellow Committee Members for their dedication to this inquiry. Working with this Committee is a great example of people from separate parties working together, something that might be rarely seen but happens often in the Australian Parliament.
Hon Barnaby Joyce MP
Chair