|Thursday, 8 September 2011|
AUSTRALIANS’ perceptions of the economic contribution of the mining industry are wildly different from the facts, according to a new survey.
The survey, conducted by independent think tank The Australia Institute, found that respondents believed the mining industry accounted for 35% of economic activity.
According to the Australian Bureau of Statistics, mining accounts for 9.2% of gross domestic product, although that doesn’t include flow-on effects to other sectors like construction, finance and manufacturing.
Respondents believed around 16% of the workforce was employed by the mining industry when the actual figure was 1.9%, or just 217,100 of Australia’s 11 million-strong workforce.
Foreign ownership was another area where the responses differed.
Those surveyed believed the Australian mining industry was around 53% owned by foreign companies.
The Australia Institute says that figure is actually 83%, based on a briefing paper prepared by Naomi Edwards for the Australian Greens in June.
The survey, part of the research paper Mining the Truth: The Rhetoric and Reality of the Commodities Boom released today, was based on responses from 1370 people.
The Australia Institute executive director Dr Richard Denniss slammed the mining industry for using expensive advertising campaigns to influence the general public.
“The mining industry likes to portray itself as a big employer, a big taxpayer and a big money maker for Australian shareholders. Yet the reality just doesn’t match the rhetoric,” he said.
“The mining industry’s advertisements ignore the way that the mining boom is driving up the exchange rate, driving up mortgage interest rates and driving down employment in other sectors of the economy.
“It is a bit rich for former BHP Billiton chairman Don Argus to talk about declining productivity growth when an analysis of the figures actually reveals that productivity in the non-mining sectors is growing quite rapidly. The irony is that it is the rapid decline in productivity in the mining industry that is driving down the national figures.”
The institute also blamed the mining industry for a potential blowout in the current account deficit to an estimated 6.5% of GDP in the medium term.
“It’s amazing to compare the rhetoric of the mining industry with the reality of the national accounts,” Denniss said.
“Not only is the mining boom reducing the competitiveness of other exporters but the enormous outflow of profits to the foreign owners of the mining companies is driving up the net income component of the current account.
“It might seem bizarre, but Australia is set to simultaneously experience a mining boom and a blowout in our current account deficit.”
Denniss said mining industry expansions came at the expense of other sectors of the economy.
“The mining industry is in the middle of planning massive further expansions. But the faster the expansion of the mining industry, the lower the level of employment in other industries will be,” he said.
“You don’t have to be a protectionist to see the merit in slowing the approval of massive new mining and coal seam gas ventures.”
The report was released today to coincide with the Making the Boom Pay conference, which is being held in Sydney today.
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