Hole lot of problems in store
IF YOU wonder when Australia’s abundant mineral wealth will make itself known in your street, you can stop now. It won’t.
The Australian Local Government Association’s annual State of the Regions report has found Australia’s mineral largesse is generally limited to areas with holes in the ground.
Meanwhile, the soaring Australian dollar and rising interest rates is hammering areas dependent on manufacturing or tourism.
Sevegne Newton, president of Byron Bay’s chamber of commerce, Byron United, said she was seeing the evidence of that in the town daily.
“We’ve had three businesses close over the weekend, and that’s on top of the eight we’ve already had close and there will be even more,” Ms Newton said.
“This is a really tough time.”
She says that tough time is partly due to the high rents paid by businesses in the town, but the other part could be chalked up to an intense slowdown tourist numbers.
“We know there are accommodation places that are empty and have been for months,” she said.
However, State of the Regions report co-author Dr Peter Brain said the problems faced on the Northern Rivers were being experienced across Australia – and not just in tourist economies.
Dr Brain said regions that relied on manufacturing were facing similar problems as the rising dollar increased competition from imports in the domestic market and made it harder to sell products overseas.
The greater danger was if the current boom continued too long the tourism and manufacturing sectors could be largely wiped out and unable to return to full strength when Chinese demand inevitably dwindled.
Dr Brain said Australia needed to spread the benefits of the mining boom to non-mining areas.
The Federal Government’s watered-down mineral resource rent tax was one way. But he said Australia could learn a lot from the way Norway handled its mining boom.
In that case, the government had put rules on supply contracting for mining that favoured domestic manufacturers around the nation and offered cash incentives to help smooth the transition.
The end result there had been stronger manufacturers and a stronger skills base. It also meant the average Norwegian family was substantially better off financially than the average Australian family.
While helping Australia’s manufacturing sector might not put money directly into the tills of Byron Bay’s shops, Dr Brain said it would provide a trickle-down effect for people holidaying within the country.