EDITORIAL: When the booms go bust

ECONOMIC diversification has always been the holy grail for the Hunter Region’s advocates, but living with mining booms and busts makes that goal elusive.

When coal is in its boom cycle it tends to shoulder aside potential investment in other areas. When the boom fades and confidence recedes, the pessimism and panic that accompanies the downward cycle makes it implicitly hard to attract capital for any purpose. 

What makes things even more difficult is the influence of the intensely Sydney-centric state administration and of governments more interested in playing politics than in fair or sensible economic development.

The price the region pays for this short-sightedness and bad leadership is being seen, once again, in job losses now sweeping the region.

According to regional industry group HunterNet, 75per cent of respondents to a survey of small and medium-sized businesses have laid off staff to stay afloat. 

HunterNet has blamed a ‘‘perfect storm’’ of negative conditions – including China’s slowdown, the high exchange rate and the coal price slump – for the job cuts.

The fact is, however, that every boom ends for a combination of reasons that ultimately comes down to supply and demand.

For years this newspaper has urged successive governments to help the Hunter diversify, arguing that allowing the region to develop more strings to its economic bow would enable it to weather these inevitable ‘‘perfect storms’’ in the coalmining sector.

There is little evidence that anybody outside the region has paid attention to these calls. 

Witness, for example, the previous Labor government’s decision to actively prevent the establishment of a car import terminal at Newcastle, even when the importers wanted to set up in the city.

Nor would the government take the advice of the expert committee appointed to review the NCIG coal loader and impose a small levy on export tonnages to invest in regional diversification. 

Neither major party seems willing to consider the sensible proposal to establish a container terminal in the Port of Newcastle.

And all the while the city and the region bleeds expertise and capability. In the past few months Newcastle has lost its floating dock and is shortly to lose its wool auctions, typifying this steady process of damaging attrition.

It’s a problem that desperately needs attention, but winning that attention will require more political consideration than the Hunter has been able to marshal in recent decades.  

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