$200B resource projects in doubt amid gloomy outlook

Almost $200 billion worth of planned resource investments are looking unlikely as surging costs driven by a high dollar and rising wages combine with a falling outlook to dash a second-stage investment boom, according to The Australian.

Illustrating the gloomy outlook for new projects, miners surveyed for a report to be released today have given a bearish outlook and highlighted expected falls in development spending. And those previously surveyed have abandoned new investment plans.

The mining business outlook report, by management consultancy Newport Consulting, revealed only a quarter of 55 mining leaders surveyed planned to invest in major projects this year, down from 52% last year.

Newport managing director David Hand said those still planning investment appeared to be referring only to previously approved spending.

"If commodity prices stay down, then the investment boom is over," he said.

China calls for closer ties

One of China’s top diplomats in Australia has called for the relationship between the two countries to move beyond resources to finance, infrastructure and agriculture, according to the Australian Financial Review.

Deputy ambassador Xue Bing made a surprise appearance at an investment forum at Canberra University to argue that Chinese investment was in Australia’s interests.

It was the first official response after Coalition leader Tony Abbott’s stance in Beijing last week against acquisition of Australian companies by foreign state-owned entities.

The comments triggered a split between Liberal and Nationals MPs over whether the Foreign Investment Review Board should take a tougher stance against Chinese investment.

Xue said: “China and Australia are highly complementary in natural resources, industrial structure and scientific development.”

Unions warned on falling membership

The union movement has been told it is “treading water” on its membership numbers ahead of the release of the Gillard government’s review of workplace laws in coming days, according to the AFR.

The ACTU’s third Urgency & Opportunity report found that union membership numbers have fallen by about 31% since 1990, while employee numbers are up by 34%.

The report warns that maintaining union density at current levels of 18.3% of the total workforce would require a net gain of about 133,500 new members.

Returning union density to 2006 levels would require far more ­ambitious growth of a net gain of 337,000.

The report argues that full-time and part-time employees who are union members get a pay premium compared with non-union members.

But ACTU assistant secretary Tim Lyons argued in the report’s forward that “genuine growth” would not be achieved without unions changing and adapting.