What would be the effect of Adani not proceeding?
What would be the effect of Adani not proceeding?

City at risk if Adani is lost

IT IS the question that everyone in Townsville and beyond is asking.

What would be the effect of Adani not proceeding? The Adani issue is one of the great turning points in the development of Australia.

Either we go down this route or we do not.

Let me state at the outset that I am agnostic on this issue; I am happy to leave this debate to others better qualified to decide our future with regard to coal.

My interest is in examining the issue from a social and cultural perspective.

The first point I would make is a decision not to proceed with a mine (such as Adani) is less devastating for a region than a decision to close a major employing entity.

Bernard Salt said a decision not to proceed with Adani is less devastating for a region than a decision to close a major employing entity. Pic Mark Cranitch.
Bernard Salt said a decision not to proceed with Adani is less devastating for a region than a decision to close a major employing entity. Pic Mark Cranitch.


The second point I would make is regardless of whether an ongoing concern closes, or a proposed development fails to proceed, the impact on the local region is shaped by the state of the local economy.

The impact of the closure of a steel mill in Newcastle in 1999 with the loss of 4000 jobs was lessened by the fact that the economy at the time was expanding.

On the other hand, the collapse of Pyramid in Geelong in 1990, as the Australian economy lurched towards recession, negatively affected that city for a decade. I think the same thing happened with Adelaide (loss of the state bank) and Melbourne (also the loss of state bank), although Melbourne did surge later in the 1990s after Premier Jeff Kennett kicked off construction projects like CityLink, Crown Casino and the Docklands stadium.

Townsville too has had its fair share of ups and downs over the last decade starting with the Storm Financial collapse at the time of the global financial crisis. And as painful as this was, the subsequent mining boom that benefited Townsville and Australia lessened some of the impact.

In other words, losing something you have in place, where workers have well-established lives and lifestyles, and dependent families, is magnified when the withdrawal comes at a low-point in the economic cycle.

In the 1980s Wollongong's Port Kembla steel works scaled down from more than 20,000 jobs to less than 10,000 jobs in a series of rolling retrenchments. The population of Wollongong dropped marginally three years after the retrenchments began.

The same thing happened in Victoria's Latrobe Valley in the mid-1990s when the power generation industry was rationalised.

The breadwinner leaves the town in search of work, establishes a base someplace else, and the family follows.

Roadworks have started for Adani Carmichael coal mine project.
Roadworks have started for Adani Carmichael coal mine project.


Adani is a proposal; it is an opportunity. If for whatever reason the mine wasn't to proceed, the effect would be to reduce employment and business opportunities in Townsville (and elsewhere) in the future. (Hold your horses, I'll come to the environmental cost later.)

And then there's the positive effect of government support for struggling communities. Geelong has fared well out of this process.

Here is a city that holds marginal seats at both the state and federal levels.

In 2008 the State Government qango, the Transport Accident Commission, was relocated out of the Melbourne CBD inclusive of 750 jobs to Geelong.

This was followed within two years by the allied instrumentality, the Victorian Workcover Authority, with 250 jobs and in 2013 Prime Minister Tony Abbott announced the headquarters of the NDIS would be placed in Geelong.

It was a gift to assist the city transition from car manufacturing to white collar work.

More recently, it was announced a division of the Australian Bureau of Statistics was to be relocated from Belconnen to a site near Deakin University at Geelong.

The only federal seat more marginal than Townsville's Herbert is Geelong's Corangamite.

So, what are the lessons for Townsville? Adani is an opportunity cost; it is not an existing arrangement that is being withdrawn. And, of course, there are those who will argue that there is a far greater cost to Adani proceeding that is borne by the broader community.

However, there isn't the kind of expanding resilience in the Townsville economy today, that there was in the Newcastle economy in 1999, so the loss of Adani jobs would be a blow to local prosperity in the early 2020s.

This might appear somewhat cynical, but in some respects the best thing for a local economy isn't so much to develop a new wealth-generating industry, it's being able to remain a permanently marginal seat.

The worst thing for Townsville might not be Adani failing to proceed, it could be a shift in the politics of Herbert such that it is viewed as a safe seat, regardless of who wins it.



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