Mining boom gains still evident in Australia

Australia has benefited substantially from the mining investment boom (ending around 2012), with gains still evident around the nation.

The substantial investment in mining capacity provides a strong base for future gains to Australia from higher volumes of mining exports. While both exceptionally large and long-lived, this recent boom illustrates that no investment boom is permanent.

The report into transitioning regional economies by the Productivity Commission reveals employment in the mining industry remains more than double pre-boom levels. However, some people and businesses have suffered due to the end of the investment boom and many communities are still adjusting.

'A highly flexible workforce and a substantial use of fly-in, fly-out workers has meant benefits of the boom weren't confined to one area, but instead spread to other regions. This also meant that the downsides of the end of the boom were not concentrated in mining regions,' Commissioner Paul Lindwall said.

The report also examines regional and urban areas and the different pressures they have faced. The Commission's new index of relative adaptive capacity offers a common standard for future research and analysis of regions.

The report warns that ill-planned government spending in regional areas often does little in terms of creating jobs and wealth and makes a number of recommendations to address this.

'Governments are spending billions of taxpayers' money on regional programs and projects and we have some serious reservations about their effectiveness in helping people and businesses adjust to new circumstances or their contribution to sustainable growth in regions. Many of these programs have not been subject to rigorous selection or evaluation,' Commissioner Lindwall said.

'Making States and Territories more directly responsible for regional development is crucial to removing unnecessary overlap, duplication and inconsistencies between all tiers of government, while improving regional outcomes. Commonwealth intervention should be rare and is justified only by extreme events,' Paul Lindwall said.

The report states that better analysis of proposed regional economic development programs needs to be undertaken by the States and Territories to ensure scarce taxpayer resources are efficiently used. This needs to be supported by strong and effective local leadership, which is critical for good results.

Discretionary spending by governments should be directed to the highest human priorities identified in regional strategic plans. And evaluation would be assisted if all governments used consistent regional boundaries.

Other recommendations include removing or reducing unnecessary regulation that impedes regions from taking advantage of opportunities and being more targeted in providing any assistance to regions in the rare cases where it might be applicable.

The report is available at: www.pc.gov.au/inquiries-and-research/transitioning-regions/report

Adaptive capacity index and key statistics

The interactive map shows Australia divided into 77 functional economic regions (FERs). Red regions are least adaptive, orange below average, light blue above average, and dark blue most adaptive (for grey regions no index value is available).

• Hovering your cursor over an FER on the map will show the region’s name, adaptive capacity and ranking among FERs.
• Clicking on a region opens a popup showing the region’s relative adaptive capacity index score, its confidence interval and the factors that contribute to its index score. The popup also contains information about the region’s economic characteristics in the past (2011) and present.

Further information on the index and FERs can be found in chapter 4, appendix D and appendix E of the final report.

Interact with the map