The new lotus eaters

NO ONE has ever accused Australians of being work-shy, until now. In four deeply disturbing developments over the past week Hogsback has watched the reputation of Australia’s mining industry be dragged down by events in the coal and iron ore sectors.

Tim Treadgold

First came news that workers on the east coast of the country, some of them currently unemployed, were reluctant to take jobs on offer in developing northwest iron ore mines.

That was followed by the continuation of the rolling strikes at the BMA coal mines in Queensland, and threats of more strike action later.

The third example of how work-shy Australian workers appear to have become was news that the Indian coal company, GVK, might follow the iron ore example and seek government permission to import workers for construction of the Alpha mine in Queensland.

Then yesterday came official confirmation that high costs, particularly those related to the labour market (rising pay and falling hours worked), had slashed Australia’s international competitiveness. These costs drove the country down from being the 9th most competitive country out of 59 measured by a Swiss economics research group to 15th.

There is a common thread running through those four events, and they all go back to a starry-eyed belief held by many Australians (including senior government officials). That is that the over-hyped resources boom will carry the country for decades, eliminating the need for anybody to work hard.

Wrong. Terribly wrong. But at the same time a wonderful example of what happens when people fall for the belief that there is such a thing as a free lunch.

In Australia’s case, the free-lunch syndrome developed in the wake of the resources boom – a phenomenon that started to run out of legs last year and is looking rather shaky as commodity prices retreat, Europe crumbles in what could be a long-term recession (dare it be called a depression), and China’s rate of growth slows alarmingly.

Those international developments are washing up on Australia’s isolated shores, and they are bringing bad news for everyone, especially those people unprepared for a downturn, or unwillingly to go where the jobs are.

The first of the work-shy events, Gina Rinehart’s application for the right to import up to 1700 construction workers for her Roy Hill iron ore mine, was the headline grabber. After all, Rinehart is a prime target in the “class war” ignited by Australian Prime Minister Julia Gillard.

Much to Gillard’s annoyance she discovered that Rinehart was merely following government regulations when she applied for the right to engage “guest” workers.

Politics and name-calling aside the most disturbing aspect to the Roy Hill situation was the discovery that very few Australians on the east coast who claim to be unemployed will take the highly-paid jobs to build new mines because it means leaving their comfort zones.

The 18-month long BMA dispute is a variation on a theme. Here are workers who believe they should be paid more, or work fewer hours, because they also believe the coal industry is booming.

BMA, so far, has declined to “go nuclear” and lock the gates, forcing a Qantas-style resolution by a government arbiter. Eventually that will be the solution because union leaders believe they are playing a role in the government’s attempt to pit workers against bosses.

Alpha, the third event, will almost certainly go the same way as Roy Hill despite ambiguous comments from GVK management that described the importing of foreign labour as a “last resort”, and a “good insurance policy”

In other words, GVK will apply for the right to import some of the 3600 workers needed during the construction phase of Alpha. If work-shy Australians hanging around coffee shops and pubs in the inner suburbs of Sydney and Melbourne refuse to work at Roy Hill they will also refuse to work at Alpha.

All of what The Hog has been watching is encapsulated in the analysis of Australia’s falling productivity by the IMD World Competitiveness Centre, and comments on that work by Committee for the Economic Development of Australia chief executive Stephen Martin.

“Governments and some economic commentators seem to believe that the mining boom will go on indefinitely regardless of evidence of slowing commodity prices and demand from traditional markets, skills shortages and regulatory instability and barriers,” Martin said.

Boiled down, Australians are in danger of becoming a nation of “lotus eaters”, people who, in Greek mythology, munched on lotus flowers all day with the narcotic effect causing them to “sleep in peaceful apathy”

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