The assault on Abbott's north face

Fierce criticism of Tony Abbott's development plan is completely detached from the critical role outback regions play in Australia's prosperity.

The response to Tony Abbott's half-formed plan to develop northern Australia has been breathtaking – for all the wrong reasons.

As suggested yesterday, the politics of the plan were always bound to be difficult, but made much worse by the fact that it was leaked to a newspaper while still in its formative stage (In praise of Abbott's great leap northward, February 7).

Reaction from Labor and the Greens was swift, and fierce. Trade minister Craig Emerson labelled it "wacky" and Greens leader Christine Milne called it "madness ... it's Tony Abbott doing what Gina Rinehart wants".

Such reaction was fairly inevitable from two parties that have endured the political beating of their lives from Tony Abbott over carbon pricing – a policy which, in this commenator's view, is nonetheless a vital plank of Australia's development and influence within the global political-economy of the 21st century.

Whatever the weaknesses of the design of the carbon tax (which might have been better if it really was a straightforward tax rather than a highly complex web of subsidies linked to an ETS), Australia needed to be a global leader in climate change policy, and both Milne's and Emerson's parties have taken a hiding for striving to make it so.

So when 'Dr No' put his amply-eared head above the parapet with a similarly forward-looking plan (or rather, had the parapet pulled down by whoever leaked the draft plan), a volley of criticism was to be expected.

Less expected was the number of media commentators who were quick to shoot down the idea with notions such as 'it's been tried before', 'it's too hot – nobody wants to live there', 'the soil's too poor', 'too many insects' and so on. Quite right, and who'd live in Indonesia!

There is a bit too much projecting going on. 'I' don't want to live there, therefore nobody else would.

As a nation we have become too attached to espresso machines, endless conversations about home renovation, clinking glasses in master-chef approved restaurants, and finding mini-parking places for our hybrid cars – and too disconnected from the source of the wealth that pays for these southern delights.

We know that an army of workers are flying in and flying out of the Kimberley, Pilbara, Northern Territory and Far North Queensland to provide labour for the construction phase of the resources boom, but surely once that's over those workers will just come home and get decent jobs in the south? Won't they?

As Robert Gottliebsen reported on Wednesday, NAB chief economist Alan Oster sees a dramatic falling off in labour demand in northern Australia when the construction phase is over – one operational job will remain in mining for every four that currently exist, and in the LNG sector that ratio is one for every eight (Allocating Australia's construction army, February 6).

Those workers, accustomed to incomes of $150,000 (and much more) will return to a southern economy facing what looks, day by day, to be a growing number of headwinds – China's demand for our hard commodities faltering, stagnant corporate profits, hidden under-employment, and the spectre of sharp rises in the cost of living as the dollar corrects downwards to reflect these changes. Throw in a snowballing of redundant miners selling off their investment properties, and even housing could feel the end of the boom.

The social and economic problems of the return of that workforce are yet to be comprehended. The trickle-down of consumption spending by 'cashed up bogans', once gone, will remind us all of how valuable a role those workers played in keeping Australia solvent during the GFC.

And then there's the one-in-four or one-in-eight that keep working up north. As WA planning minister Brendon Grylls told Business Spectator some time ago: "A fly-in-fly-out worker costs the mining company $50,000 to $100,000 a year on top of their wages. If the company paid that money to the worker, they'd be more likely to buy houses locally. That leads to strong growth and eventually a more normal market for housing is established. And once a town reaches 20,000 to 30,000 its growth becomes self-generating" (Pulling back the curtains on productivity, July 4, 2011).

Even the operational phase of the mining boom will need more infrastructure and housing than exists presently – living in a 'donga' or hotel might work short-term, but the Abbott plan addresses longer-term needs.

And the 'self-generating' part of Grylls' vision for larger cities up north is, in this new leaked plan, as much tied up with agriculture, tourism and education as it is with mining.

Labor has a plan for regional development and is arguing for a more diverse economy as part of its re-election platform. The Greens want to build communities powered by renewable energy, and new, sustainable industries to provide those communities with work and prosperity. Both objectives can be seen emerging from the Abbott draft plan – which, incidentally, is a long-term plan focused on what can be achieved by 2030.

Labor and the Greens should have got in first with this sort of visionary thinking, but as they did not, they are left no option but to shoot it down.

Policy thinkers should not rush to join them.

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