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Regional Queensland – looking forward, looking back - Write Stuff Chapter.

December 15, 2020

Regional Queensland – looking forward, looking back.

During the last week of the recent State election campaign, I found myself at a campaign rally with the Premier in a hall opposite Townsville State High School. Looking at the school it had me reminiscing back to 2007 when I found myself working for the Leader of the Opposition, Kevin Rudd, as he aimed to end the Prime ministership of John Howard. I was travelling with Kevin around Queensland during the election campaign and was with him in Townsville for a policy announcement.

On October 30, 2007 at Townville State High in the seat of Herbert, Kevin announced our commitment to a 20% renewable energy target. It seems politically mad now that we announced this policy in Townsville, but I can’t recall anyone raising an eyebrow, let alone their voice within the campaign team to suggest this was a political mistake. To give this some further context, it’s about a five-minute drive from Townsville State High to Adani’s new HQ in Townsville – the mine that has been such a political football in recent elections at the State and Federal level.

How is it possible that the political mood has changed that dramatically over the last thirteen years? Why in 2007 was taking action on climate change a net-positive through regional QLD, including in the mining and industrial seats of Flynn, Capricornia and Dawson, whilst in 2019 our vote was decimated in those exact same seats, with climate change and a perceived hostility to coal mines and workers identified as a significant factor in the decline?

What is going on?

I understand that Labor people from down south scratch their heads about Queensland and, as the saying going, I am here to help.

In Australian politics, federal elections tend to be decided in Queensland. In 1996, 2007 and indeed 2019 – Labor’s performance in Queensland tends to tell the story for Labor federally. Labor required a big swing to win the 2007 election and Kevin’s home state of Queensland was identified as a prime target to win a swathe of seats in the South-East and up the coast. Outside of the South-East corner, Labor was chasing Hinkler, the newly created seat of Flynn, Dawson, Herbert and Leichhardt. The only seat Labor had held outside of the South-East since Keating lost in 1996 was Capricornia, which we regained in 1998. We campaigned strongly on climate change in Queensland both in free media and paid advertising. Looking back, I can’t recall one campaign conversation where we were wary of an electoral backlash because of a focus on climate change.

What’s changed in regional Queensland since 2007? Plenty. The resource towns were enjoying prosperous times in 2007, so much so the Moranbah KFC – inland from Mackay – had to reduce its operating hours because they couldn’t find staff to open at full capacity! Given the boom times it would have been almost impossible to paint a negative outlook on the future of coal mining in regional Queensland. Times were good, people were happy.

But times change. And so, has the mood of the electorate.

The long and the short of it

In my role as State Senator for Queensland, I travel up north quite a bit. I’ve also run many state and federal campaigns over many years in my home state; I like to think I have some sense of how people are thinking, acting and voting – even if it means I’m sometimes wrong on election day!

Talking to the people of regional Queensland, the most significant shift since the 2007 election in terms of the outlook for this part of Australia is long term versus short term expectations.

In 2007 voters were thinking long term, over the horizon about what a better Australia could be. It’s easy to do that when times are good; it seems like they will never end, and the future is full of rose petals.

At every election since then, short term thinking has been the dominant mindset. It’s unsurprising then that Labor, with its bold vision for emissions reduction out to 2050, has a hard time selling that vision.

What has led regional Queensland to change their thinking and what are the policy implications for the Federal Labor Party desperate to avoid a decade of opposition? Surely the state home to the Great Barrier Reef and reliant on its natural beauty could be persuaded to act in defence of the environment?

There is no doubt that Tony Abbott’s period of time as Opposition Leader where he ended any prospect of bipartisanship climate policy and through his destructive and divisive political style set out to turn any action on climate change into a hip pocket issue started to turn the tide, but it is worth asking why this message was so easily received and why is it that the growing evidence of the urgency required to tackle climate change hasn’t impacted politics in regional Queensland.

The economic fortunes of Australians have taken different tracks over the last thirteen years since Kevin Rudd won that 2007 election. Many of us in capital cities have enjoyed prosperous times compared to people in regional Queensland. And this plays out in our politics.

Take housing for example.

Median house prices in Boyne Island, a suburb of Gladstone in the Federal seat of Flynn peaked at $490 000 in 2012 and have now decreased by 36% to around $315 000 in 2020. In North Mackay in the federal seat of Dawson, median house prices peaked at $400 000 in 2013 and have declined by 30% to be worth $280 000 in 2020, whilst Railway Estate in Townsville has seen median house price decline by 14% over the last ten years. This compares to median house prices in Greater Brisbane up 79%, Greater Sydney up 92% and Greater Melbourne up 144% over the last fifteen years.  For most Australians the most significant asset they own is their house and as you can see, the asset value has taken a different trajectory depending on which part of Australia you live in.  

People in regional Queensland feel – and are – poorer. This shifts your mindset when you vote.

Population is, as they say, destiny. It has had its role to play in this story.

With the exception of Townsville, which has enjoyed modest population growth, most regional town populations have been steady or declined over the last decade. Gladstone and Mackay have tread water over the last five years, whilst the capital cities of Brisbane, Melbourne and Sydney have seen significant population growth over the last decade fuelling demand and creating jobs.

People go where the jobs are, and while this has an obvious reinforcing economic impact, it also impacts on the confidence of people in regional towns reliant on the eb and flow of mining. People can sense whether the tide is coming in or out for them.

While the capital cities have seen growth in the number of people employed, towns like Mackay and Townsville have seen the number of people employed go backwards since the peaks in 2011-2013.

The number of people employed in the Mackay region has decreased by 6.4% since 2013 and Townsville is down nearly 10% since 2011. This, coupled with the rise of insecure and labour hire work, is contributing to the gap between the cities and regional Queensland. For example, Townsville in the last 15 years has seen a 43% increase in people working part time while over the same time only a 3.5% increase in the number of people working full time.  The Mackay region now has fewer people working in full-time jobs, down 10% from a peak in 2013. The rise of insecure work means that workers no longer have good, dependable jobs. This sense of economic insecurity means they are forced to focus on the short term –  when the next shift is, whether they have enough hours to pay the bills and many are unable to secure mortgages or car loans to give them the stability of thinking long.

All of these factors influence voting patterns and intention. If you’re focus is putting your feet on safe terrain, you’re hardly going to be interested in talking about the horizon.

Mining country

For many years the mining sector has played a crucial role in growth in regional Queensland economies, both from direct investment and indirect investment. Wages grew quite significantly during the mining boom peaking at 6.7% in mid-2008. This additional income flowed back through into the communities where these workers lived in, thereby sharing the prosperity. Everyone, as they say, got a drink.

Since 2013 it has been a different story. Wages growth has dropped significantly, increasing only 1.6% from 2013 to 2018 - barely tracking inflation – compared to other sectors which a saw 2.2% rise. All of this happened while the mining sector itself decreased in size by 1%.  

The Queensland Government estimates around 30,000 people work in the coal sector across Queensland and 63,000 across the mining sector. In the Rockhampton/Gladstone CQ region around 10,000 people work in mining. In the Mackay Region its 15,700 and Townsville 4,100 are employed in mining.  Importantly it largely peaked in 2012 – about 5 years after Kevin was elected and 1 year after he lost office in his second go at the top job.

It really is important to get your head around the sheer scale and size of the mining sector up north and its relative importance to Queensland. Mining is important to Australia, but its critical to Queensland.

In 2017-2018 (the latest available data from the QLD Government) mining activity made up 11.8% of Queensland’s economy, worth $38.8 billion. Overseas exports of Coal, LNG and Minerals accounted for 83% of the nominal value of Queensland’s overseas merchandise exports.

It’s not just the mining itself – it’s also the supply chain and flow on work.

In 2019-2020 the output of Coking Coal was 152 Million tonnes to 86 Million of Thermal coal, a majority of which was exported through Queensland Ports, including Gladstone Port, Dalrymple Coal Terminal and Hay Point south of Mackay the majority heading to Asia.

It is important to note that Queensland Coal production has remained largely stable in the last five years with 2019 year being one of the largest export years.

 

Looking forward

When you consider these economic factors, you can understand how regional Queensland would view a policy proposition that could have a negative impact on their livelihood.  Voters in regional Queensland are not living in clover.

It is understandable why many in regional Queensland would be thinking short term, they are consumed by worrying about tomorrow and don’t have the luxury to think beyond that.

If you bought your house in Mackay in 2013 and have watched the price drop over the last five years, the thought of their being less people employed in coal mining would likely scare you. You might be more worried about the impact of negative gearing changes on housing prices too.

If you lost your full-time job and are now working part-time, you could be more concerned and persuaded about any claim that Labor is going to ‘crash the economy’ and less worried about forward projections about coral bleaching.

So how should this impact the policies we take to an election? Labor’s long-term prognosis on climate change is correct – the science is irrefutable. We are the only party of government that has consistently advocated for action on climate change, yet our vote in regional Queensland – a state that will be deeply impacted by climate change – goes backwards at each election.

We need to look at our policy proposition in that same short-term versus long-term way that voters do.

For the purposes of my argument, let’s say short term is in the next ten years and long term continues from there into the future.

We need to continue to advocate that urgent action is required, but we need a policy setting that reassures regional Queensland they have nothing to fear from an incoming Labor Government. We will protect your job and livelihood, but we also want to ensure your grandchildren have the same opportunity to live and work in regional Queensland which is why we need to take action to create a better future for them. We must not let these factors come into competition – because when they are, we lose.

In the short term, the biggest threat to good, well paid resources jobs in regional Queensland is not Labor’s wild plans. It is automation and insecure work, evidenced by the increasing use of labour hire in the industry.  

The truth is that mining is probably not going anywhere for some time – but the good jobs may very well be, at least to the level which we currently enjoy.

Automation is happening now.

BMA (BHP - Mitsubishi Alliance) in November 2019 announced that it would automate 300 Jobs at Goonyella Riverside Mine converting 86 truck to become autonomous in 2020. The claim that no employees would lose their jobs, doesn’t include the vast swarths of labour hire workers that are forced to do the same job without the same pay or conditions. These people don’t count, apparently.  

This program is part of BHP’s $1.2bn program to introduce 500 autonomous vehicles across WA and QLD. Rio Tinto started trial of the technology in WA in 2008 and now has 300 autonomous trucks. A study by McKinsey and Co has suggested that up to 27% of Jobs in Central Queensland could be lost through automation by 2030, with mining jobs some of the most at risk.

The World Energy Outlook projects total world demand for energy sourced from coal to be marginally lower (down 1.1%) in 2040 compared with 2018, with demand for power generation down 3.0% and demand for industrial use to be 13.3% higher.  People will want and need coal and it’s important that Queensland, and Queenslanders, supply it.

Queensland’s coal industry continues to enjoy key advantages, including its geographic location and the quality of its coal, compared with most of its global competitors. Therefore, under the main scenario outlined in the International Energy Associations projections, it is likely that international demand will support Queensland’s coal exports over the coming two decades, with the long-term prospects for the State’s metallurgical coal likely to be more robust than for thermal coal. For this debate it is worth noting that in 2019-20, Australia exported a total of 175.6 Mt of metallurgical coal – used in the making of steel – of which 120.6 Mt was hard coking coal. Significantly, almost 90% of Australia’s metallurgical coal exports originated from Queensland.

Capturing Value

Earlier, I discussed the fact that Queenslanders were happier when times were good, and the wealth was shared around. If a boom in jobs and population is not returning in the near term, and automation and insecurity undermine what remains – we need to find ways to arrest this problem.

Tackling insecurity through labour hire reform is one way, but it can’t be the only way.

We need to use the royalties and wealth being created by mining in regional Queensland to set up that long-term future for generations of Queenslanders to come. That means thinking about new industries in the long run. But it does not mean thinking about them at the expense of or exclusion of coal in the shorter term.

Hydrogen, rare earth minerals, defence industry, hydro and renewable energy, agriculture and manufacturing all present significant new opportunities, but this will not and cannot come at the short-term expense of our current strengths. People won’t cop it, and nor should they.

Industry policy needs to be in addition and is achievable because we are leveraging off our current strengths. It requires Governments to take risks and invest money in regional Queensland. That is how regional Queensland works – it needs leadership. This process worked in the past with coal mining, with the State Government playing an active role in that expansion, and it can work for new job creating industries as well.

Over the last 170 years, ports, railways and other infrastructure has been built by Government in regional Queensland to help develop new industries, create jobs and economic wealth for Queensland families. Let’s use our current strengths and government resources to ensure we build the modern opportunities that are going to provide the future jobs for the grandkids of our current day miners. Policy such as this will mean future generations can continue to enjoy living in regional Queensland, earn a good wage and contribute to the economic wealth of the nation.

It’s a future only Labor can deliver and it’s one regional Queenslanders would embrace. But to do it, we need to win elections – and that means taking the people with us.

 

 

     

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