Australia is a Mine, a Farm, a Holiday Resort and Very Worried…….
The Australian PM Scott Morrison speaking in the Parliament on the crisis that is the global pandemic of the CORVID-19 virus. He acknowledges that it is a health crisis but does not really have much to say about it, other than “practice social distancing” and ‘pray’ along with a nationalistic sentiment that is summarised in two quotes:
While some must self-isolate, and we all must keep a healthy distance between us, it is important that we do all we can to ensure in the difficult months ahead that no Australian goes through this alone.
and
But we must resolve today, as Australians, to come together and to pledge to each other across our nation that this coronavirus will not break our spirit.
However Morrison, the 52 year old father of two and devoted fundamentalist Christian, becomes more eloquent when it comes to the economy. After evoking ‘the Spirit of ANZAC’ and seven paragraphs in to the 18 paragraph speech he turns his entire attention to the economic dangers of the pandemic and he does not shift from it.
A global health pandemic that has fast become an economic crisis, the like of which we have not seen since the Great Depression. Life is changing in Australia, for every Australian.
Prime Minister Morrison speaks as if the catastrophe has manifest out of nowhere, like some biblical punishment on a wayward city, specifically in the divine form of a whirlwind:
Today, we have some very important work to do to cushion the blow on Australians from the economic whirlwind. We will face more issues that none of us now can imagine. Our job is to work night and day to ensure our great country gets to the other side and emerges stronger, safer and united. We will be living with this virus for at least the next six months. It could be longer.
But the fact that the Australian economy is in free fall and lines are forming outside Centrelink (unemployment) offices is because the Australian economy is underdeveloped when it comes to diversity. For the past 30 years the planners and investors of Australia from all political parties have clung to the holy trinity — mining, agriculture and education/service (including tourism). These are now obviously toast with supply lines cut, travel restrictions universal and demand at an all time low. These extreme conditions of demand collapse can last up to 6 months according to some experts, but the actual effects of this crisis will last generations.
The Australian economy has been a house of cards for decades. Specialised to the point of obsession and by implication very susceptible to gusts. In the words of Stephen Kuper at Defence Connect:
“Furthermore, Australia’s insistence on pursuing ‘free trade agreements’ with nations that have additional layers of legislative and bureaucratic industry protections, combined with successive governments presiding over the death of Australia’s manufacturing sector and a reluctance to invest in advanced manufacturing techniques, has prompted Australia to become little more than a mine and farm for the rising powers of Indo-Pacific Asia and the very embodiment of the lazy country moniker, which author Donald Horne originally intended the Lucky Country to be known as.” https://www.defenceconnect.com.au/key-enablers/5076-australia-s-abysmal-economic-diversity-has-flow-on-effects-for-national-security
At the same time Australia has been economically dependent on China, in an unequal distribution of power, with the Chinese outbidding, out-buying and regulating demand depending on their own needs both domestically within Australia and on the world market. Australia however has remained strategically allied to the USA. This has produced a set of diplomatic contortions that are almost comic at times. With conflicting interests between the two superpowers placed side-by-side on the Australian continent.
One particular example of the conflicts in alliances Australia is entangled in is the Port of Darwin, currently leased by a Chinese state company on a 99 year lease, while the expanding military facility of Robertson Barracks is home to 2,500 US marines on permanent rotation and presumably guarding among other things, the Port of Darwin. Robertson Barracks is reported to be a future site of a United States Pacific Command, Marine Rotational Force-Darwin (MRF-D), and its current capacity of 4,500 troops will be upgraded in the near future. Currently, the size and the accessibility of key facilities in Darwin follows closely with other US deployment sites around the globe.
This is an extraordinary arrangement, which has come under little public scrutiny. The strategic significance of having the forces of a foreign nation stationed on domestic territory has largely escaped attention. Why this highly unusual deployment has become necessary in peace time has never been properly explained. — The Guardian
While the international disputes and contests continue, Australia is drilling, digging, cutting down, shearing, harvesting, as well as selling tours and educational packages as fast as it can. None of these industries exemplify value adding in how they bring wealth to the Australian people. All of these industries are demand driven. It would only take a major fall in demand and then the entire inverted pyramid will fall.
However, the present catastrophic situation and what emerges from the horrors of the pandemic can be made into an opportunity for Australia to shift towards diversifying its economic earners. This could include a clean energy sector with an export industry, as well as making higher education free (again) and a structural component of a massive research and development industry, instead of the service industry it is now, being reliant on visiting fee-paying students. De-vesting in fossil fuels and using the knowledge gained by doing so as an export industry is in itself another possibility.
Another idea is the development of a value adding layer to the rare mineral industry, which are rare only in how they are found in mineable concentrations, such as praseodymium (Pr), neodymium (Nd), promethium (Pm), samarium (Sm), europium (Eu), gadolinium (Gd), terbium (Tb), dysprosium (Dy), holmium (Ho), erbium (Er), thulium (Tm), ytterbium (Yb) and lutetium (Lu). In addition, yttrium (Y ) and scandium (Sc). These are included in the US Government’s 2018 list of 35 critical minerals. Rare-earth elements are applicable to the production of high-performance magnets, alloys, glasses, and electronics. Nd is important in magnet production in traditional and low-carbon technologies. Rare-earth elements in this category are used in the electric motors of hybrid and electric vehicles, generators in wind turbines, hard disc drives, portable electronics, microphones, speakers. Australia has mineable concentrations of rare minerals, which at the moment are only sold as ore internationally.
All of these are potential industries for a new Australian economy. But no, it is almost certain that unless there is a dramatic shift in the entire form and direction of Australian politics it will be more of “she’ll be right mate, gotta love an Aussie, ya goin to the footy” as the debt mounts, the alliances strain and the ecology of that magnificent continent is destroyed. I would argue, in a longer text than this short opinion piece affords, that the changes in form and direction for Australian politics have to include a recognition of the colonial nature of the established order, from the very top to the hands of the miners that drive the machines that dig out the minerals that have made the country rich, and so many of its people’s miserable. Unless there is a veritable revolution in Australia, the tired train will continue on its weary way to a rapidly drying up mother-load.
