Is the mining industry really the big boon for the Australian economy that it is made out to be? A new report from The Australia Institute questions this. The author of the report and economist Richard Dennis said that the political clout of the mining industry was way out of proportion with its economic reality.
Mr Dennis said that the average Australian thinks that more than a third of our GDP comes from the mining industry, when in fact it's 9 per cent. He added that the average Australian thinks that 16 per cent of our workforce is employed in the mining industry, when in reality it's 1.9 per cent. That is just 217,000 out of the 11 million strong workforce in Australia.
The figures were based on a survey that was conducted by The Australia Institute and showed that respondents believed that the mining industry accounted for 35% of the economic activity. The survey was part of the research paper titled Mining the Truth: The Rhetoric and Reality of the Commodities Boom. 1,370 people participated in the survey.
Mr Dennis said that it was time they revisited the mining tax, they needed to look at the formation of sovereign wealth funds, and the government needs to think hard about whether it just wants to say 'yes' to every mining expansion proposal on the table. The bigger the mining industry gets, the more rapidly it grows, the fewer people who will work in manufacturing, tourism and agriculture.
He also said that it was 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 was that it was the rapid decline in productivity in the mining industry that is driving down the national figures.