Happy New Year. We've reached the last quarter of the first two decades of a new millennium. Our prime minister says (repeatedly) that it is the best time ever to be an Australian. But in the Hunter we know it isn’t the best of times.
Coal – the industry that has dominated our new millennium – is losing steam. Coal mining has shed 16,800 jobs across Australia since mid-2012, nearly 30 per cent of the sector’s total, with cutbacks in the Hunter leading the way. All over the valley there are retrenchments. Pits are up for sale. Coal prices have fallen dramatically, to barely a half of what you got for the stuff five years ago.
Coal is now a brake on the region's economy. New investment, with its handsome multiplier effects, is non-existent. Retrenched miners are competing with workers in other sectors, or moving on. There are fewer pay packets circulating in our regional towns, and only modest contracts for surveying, engineering and maintenance firms. Downward economic spirals are never pretty. From experience we know what is in store in the coal sector in 2016: more layoffs, demands for higher worker productivity, a squeeze on suppliers.
Awareness will grow this year that coal isn't going to drive long term economic growth in the region like it has done since the early 2000s. We will discover this year what a precarious economic position we are in. The sale of our local electricity distributor, Ausgrid, will generate around $10 billion for the state’s treasury. But like the $10.2 billion from the sale last year of our high voltage distributor, Transgrid, the proceeds will be steered to infrastructure investments in Sydney.
The lower Hunter is seen to have received already its share of public asset sales: $340 million from the $1.75 billion sale of a 98-year lease over the Port of Newcastle, to be spent mainly on an insignificant stretch of light rail through a struggling Newcastle CBD.
As in the coal sector, workers for Transgrid and Ausgrid will be pressured for productivity gains under new private owners desperate for competitive returns on their sizeable investments. The surge of our thick energy economy – coal, electricity generation and distribution, and aluminium smelters – began 50 years ago. Now our thick energy economy is being dismantled.
This year we will also become aware of the consequences of our revived marriage to Labor at the 2015 state elections. Last March Central Coast and lower Hunter voters ended their sordid flings with Liberal and independent politicians, the exceptions being in Lake Macquarie with its longstanding independent member Greg Piper, and in that conservative stronghold Terrigal. Otherwise the political map north of the Hawkesbury is re-painted red all the way to Port Stephens, ten Labor seats one after another. We will discover this year what this political indulgence means. If Prime Minister Turnbull’s popularity persists and a Liberal-National Coalition government is returned in the 2016 federal election with a handsome majority, then NSW and Australia will be governed by popular Coalition leaders with big majorities, and no need for new general elections, state or federal, until 2019.
It’s a concerning outlook for us. It will be a long stretch without electoral bargaining power, with no local ministers from either side of politics, no infrastructure projects begging to be funded, no economic strategy bursting for attention.