Posts
Richard
Heinberg has been recently visiting Australia and New Zealand
Australia,
Meet the Post-Growth Economy
Richard
Heinberg
8
April, 2012
Australia
is betting its future on resource extraction for a growing China,
hoping its own economy will expand to support up to twice as many
people by mid-century. The folly of this strategy is exposed as
China’s manufacturing falters. That lowers the price Beijing will
pay for Australia’s export commodities, dashing profit expectations
for Aussie industries that have spent billions building export
terminals and related infrastructure.
When
Resources Minister Martin Ferguson told ABC that “the resources
boom is over,” he was uttering an unwelcome truth. The government’s
plan is to boost mining rates to make up in volume for what is lost
in per-unit price. But a glut in supply will lower commodity prices
even more. Unless the nation changes course, Australia is set to
suffer the fate of all resource “boom towns.”
Here’s
the situation in schematic. As economies in America and Europe
stagnate due to high oil prices and too much debt, China’s exports
to those countries dry up. Which means China needs less iron ore and
coal from Australia.
No
one is immune; the world is a system. And the system is undergoing a
historic “correction.” Deutsche Bank strategist Jim Reid gave a
bracing summary when he suggested the western financial world might
be “totally unsustainable.”
If
policy makers continue assuming that the ongoing global reset is
merely another turning of the business cycle, then we lose whatever
opportunity still remains to prevent financial crisis from becoming
social crisis.
Unfortunately
the idea that growth has limits is still a minority view. After all,
in the “real” worlds of politics and economics, growth is
essential to creating more jobs and increasing returns on
investments. Questioning growth is like arguing against petrol at a
Formula One race.
Keynesians
believe government stimulus spending will boost employment and
consumer spending, thus flipping the economy back to its “normal”
expansionary setting. But bailouts and stimulus packages of the past
few years have produced only anemic results, and central banks and
governments can’t afford much more of the same.
Free-marketers
nurture faith that if government spending shrinks, that will liberate
private enterprise to grow profits and jobs. Yet countries that
implement austerity programs show less economic growth than those
whose governments borrow and spend—until the spending spree ends in
bond market mayhem.
Neither
side wants to acknowledge that its prescription no longer works
because that would imply the other side is correct. But maybe both
are wrong and growth is simply finished. There are, after all, limits
to both resources and debt.
Admittedly
this is scary business. What’s scarier still is the prospect that
the economic costs of climate change could deliver the coup de grace
to world economic growth sooner rather than later, as droughts and
floods intensify worldwide.
There
will be life after GDP growth, and if we adapt wisely it doesn’t
imply misery. Indeed, if we focus on improving quality of life and
protecting the environment rather than aiming to increase quantity of
consumption, we could all be happier even as our economy downsizes to
fit nature’s limits. But a gentle landing is unlikely absent
intelligent policy and hard work.
The
alarm bells are ringing. Like Americans, Europeans, and perhaps the
Chinese, Australians will soon wake up to find themselves in a
post-growth economy. The key questions are: What will we all do then?
And, how are we preparing?
BHP Billiton to cut iron ore jobs
BHP Billiton Ltd.'s
efforts to control costs in the face of weaker demand for key
industrial commodities has shifted to cutting jobs at its Australian
iron ore operations, the biggest driver of earnings for the world's
largest mining company.
8
October, 2012
The
Anglo-Australian firm, the world's third-biggest producer of the
steelmaking raw material after Vale SA (Vale) and Rio Tinto PLC
(RIO), said it plans to redeploy an unspecified number of employees
across the operation and possibly to other parts of the company. It
follows a review of the division that looked at the current market
conditions facing BHP and its rivals.
"For
most people there will be little change other than position title and
reporting line changes. For some people there will be greater
impact," said Antonios Papaspiropoulos, a spokesman at BHP's
headquarters in Melbourne.
In
an emailed reply to questions, Mr. Papaspiropoulos said there are
currently about 900 open roles across the iron ore business, and
until the redeployment process has been completed it is too early to
say how many workers will be made redundant. Jobs will only be cut
where an alternative role can't be found or the worker chooses to
take a redundancy package, he added.
The
company said its belief in the longer term attractiveness of the iron
ore market remains unchanged, but it has for some time pointed to the
challenges facing the resources industry.
BHP
has already moved to cut jobs at other operations, including coal and
nickel, and has shelved or postponed billions of dollars in proposed
investments and said no new major projects would be approved before
mid-2013. In Australia's eastern Queensland state, the company is
moving to close a second loss-making coking coal mine as it battles
rising costs, a strong Australian dollar and sharp fall in prices.
"Against
a backdrop of increasing costs and falling commodity prices, we
continue to focus on reducing our overheads and operating costs,"
Mr. Papaspiropoulos said. "We don't intend to provide any detail
about specific adjustments, but clearly there may be some impact on
jobs in some areas."
