Can Australia handle an economic downturn? Failure to reinvest in mineral wealth casts doubt

“Yes, we charge company tax and levy royalties for minerals, but we have been very generous to [resource extraction] companies,” Greg Jericho, chief economist at the Australia Institute, told This Week in Asia. “[But] we have very little to show from the sale of our natural resources.”

Often referred to as a “nation builder”, mining has for decades been Australia’s largest export income earner: last year it generated a record A$455 billion (US$306 billion), about two-thirds of the country’s overseas income.

The politically powerful sector also enjoys considerable popular support, not least from “fly-in-fly-out” workers like Steve Parker, a “50-something” plant operator who earns A$250,000 a year working at an iron ore mine in Western Australia’s Pilbara region.

“Working away from home for three weeks can be tough,” he said after disembarking from a charter flight at Busselton, one of 60 each week that ferry workers between the picturesque southwest town and a dozen outback mines. “But then I get a couple of weeks off and the company treats me very well: good food, good accommodation, great money. Two more years of this and I can retire.”