Socio-economic costs and benefits of a mining workforce on Busselton

Professor Fiona Haslam McKenzieDr Aileen Hoath

Recent Research• CSIRO Minerals Down Under program,

Regions in Transition, part of the Minerals Futures Flagship

• Co-operative Research Centre - Remote Economic Participation, Remote Economies research agenda

• Commonwealth Department of Regional Australia, Local government, Arts & Sport

Long distance commuting (LDC)

• Interest in FIFO, DIDO, FEFO, BIBO increased exponentially in the last decade

• House of Representatives FIFO Enquiry – Regions in transition– Source communities – Host communities

Long distance commuting (LDC) (cont-d)

• 2001-2006 intercensul period fourfold increase# • 2006-2011 intercensul period twofold increase# • in Western Australia, ~101,000 FIFO workers in

mining industry (~52% of WA mining workforce)*

• Projected to increase to ~120,00 in 2012*

• * Chamber of Minerals and Energy, 2012• # ABS Census data

Who benefits from a mine workforce?

19%

69%

13%

PeelPerth MetroOther

26%

58%

17%

PeelPerth MetroOther

• Evidence from Boddington Research (CSIRO)

• Total income impact

Total employment impact

Where do people live?

Source: Hoath, Haslam McKenzie, & Maybee 2012 Hoath 2011;

Where are miners spending their income?

6

The impact of miner expenditure? • Using a set of economic multipliers: – for the Western Australian economy (Clement & Ye 1995)– calculated specifically utilizing data from the Peel region

(Johnson 2007) • we assessed the income and employment impacts

from Boddington

Peel Economic Multipliers

8

Who benefits?• Perth Metro receives the greatest absolute impact. • However…. that impact is spread over a much larger

base • The most intensive impact is within the Peel Region,

which while being smaller in absolute terms, is spread over a smaller base.

• Busselton should be benefiting – and it is, but not as much as it should be.

So what? (1)

• The geographic distribution of economic costs and benefits is uneven.

• If local communities are to benefit from mining, there has to be the opportunity to spend income locally

• The benefits are distributed widely (and no doubt, leaked). • There are inevitable costs associated with LDC• Especially for the host community if it is receiving limited income

expenditure and secondary and tertiary employment benefits• Source communities also incur costs:

– Unanticipated/unplanned growth– High demand on infrastructure and services

A source community – Busselton

Source: ABS 2001 2006 2011 Census data

A source community – Busselton (2)

Source: ABS 2001 2006 2011 Census data

A source community – Busselton (3)

Source: ABS 2001 2006 2011 Census data

Managers Professionals Technicians and trades

workers(b)

Community and personal

service workers

Clerical and administrative

workers

Sales workers Machinery operators and

drivers

Labourers Inadequately described/Not

stated

0

2

4

6

8

10

12

14

16

18

20

16

13

18

8

1210

6

16

2

1513

19

8

12 11

6

15

1

1415

18

10

1211

6

13

1

Busselton: Occupation by percentage

Census 2001 Census 2006 Census 2011

%

A source community – Busselton (4)

A source community – Busselton (5)

A source community – Busselton (3)

Source: ABS 2001 2006 2011 Census data

A source community – Busselton (4)

Source: ABS 2001 2006 2011 Census data

2001 2006 20110

200

400

600

800

1000

1200

1400

1600

1800

2000

867

1257

1900

Busselton: Median mortgage repayment ($/monthly)

Median mortgage repayment ($/...

Census

AUS

$

2001 2006 20110

50

100

150

200

250

300

140

180

270

Busselton: Median rent ($/weekly)

Median rent ($/weekly)

Census

AUS

$

So, despite median income increasing, rents mortgage payments in Busselton increasing at a high rate, 2001-11

LDC – Busselton Social Impacts (1) • LDC is not new to Busselton, although numbers have

increased exponentially since 2001• High proportion of oil and gas industry LDC workers

(relative)• A significant proportion of mine services and

construction LDC workers• Different skills and skill levels in Busselton • Rio Tinto is one of many LDC employers in the region• Many of the issues identified probably always present

but LDC amplifies the impactsSource: ABS 2001 2006 2011 Census data

LDC – Busselton Social Issues

• The ‘golden handcuffs’• Poor financial management conflicts • Motivation for LDC changes over time• Relationship conflicts can be exacerbated by LDC• Loneliness for both partners• Lack of Busselton-specific support services• Substance abuse

Source: ABS 2001 2006 2011 Census data

LDC – Busselton Social Issues (2) • Busselton not always a friendly community • Busselton could do more to capture the benefits

of LDC• A growing and often manufactured gulf between

the ‘haves’ and the ‘have nots’• Too much expected of mining companies and

their employees• BUT …. LDC is not all bad, in fact many people

enjoy the lifestyle and there are benefits.Source: ABS 2001 2006 2011 Census data

Perceived Service GapsIdentified Service Gaps Responsible agency? Child care Local government authority,

planning, SMEMental health State government

Women’s refuge State/local government

Financial planning Individual , company induction

Community centre Local government authority

Substance abuse management State government

Relationship management State/local government, Company induction

Affordable housing State/local government, community housing providers

Youth services Local government

Further information ...• The final report will go to the Federal Minister

in June 2013• Professor Fiona Haslam McKenzie– Principal research leader at Co-operative Research Centre -

Remote Economic Participation and professorial fellow at Curtin Graduate School of Business

– F.mckenzie@curtin.edu.au 0417 09 8880

• Dr Aileen Hoath– CSIRO research fellow Curtin Graduate School of Business– A.hoath@curtin.edu.au 0439 474 269