Firms spend most around Brisbane

Resources review

By Keith Orchison

A new economic study has found that mining and energy industries spent $22.3 billion in Queensland last financial year, including $4.95bn in wages and salaries.

The study has been produced for the Queensland Resources Council by the Eidos Institute and Central Queensland University Research.

It is a product of the industries’ reaction to the federal government’s proposal to introduce a mineral resources rent tax.

The study is being used to demonstrate that their commercial health is important to many areas in the state and not just those in which they operate.

The council’s chief executive, Michael Roche, believes the review is the first of its kind in Australia.

“We asked our members to show us the money,” he says.

“They supplied expenditure for 2009-10 by state postcode covering purchases of goods and services, remuneration and voluntary community contributions.”

The council has established a website so Queenslanders can find out what the industry contributes in the area in which they live by typing in their postcode.

“We have had the spending translated into a full economic picture, including the flow-on benefits of income and job generation, across all state local government areas,” Roche says.

“While a large share of the spending occurs in resource communities, the economic benefits are spread far and wide.

“I am sure it will surprise and amaze Brisbane residents that they are so closely linked to minerals and energy production in Queensland, no matter how detached they may think they are from places like the Bowen Basin and Mount Isa.”

The study reveals the biggest beneficiary is the state capital.

About $9.7bn of the industries’ expenditure was focused on the Brisbane City Council region last financial year.

The sector accounts for almost 7000 direct and contracting jobs in Brisbane.

“This economic stimulus generated, directly and indirectly, nearly 137,000 jobs or the equivalent of 22.7 per cent of the city’s entire work force,” Roche says.

The report illustrates the influence of the industries outside the state capital by examining in depth the effects in the Mount Isa local government region, the second biggest city in Australia in terms of area but with a population of only 21,800.

Last financial year the resources sector contributed $1.35 million to Mount Isa shire through indirect employment and spending in the local economy.

It paid $324m to direct employees and $166m to contractors, and purchased $820m in goods and services.

The study says modelling suggests that, when all the flow-on effects are taken into account, the mining industry is responsible for generating about 70 per cent of employment in Mount Isa.

Overall, it adds, the resources companies underpin one-fifth of gross state product and 13 per cent of Queensland employment.

The effects on the resources activity in the state are felt more widely than Queensland, he points out, both in contributions to federal revenue through taxation and in $2.8bn worth of annual purchases from suppliers beyond its borders.

Inside Queensland, purchases from suppliers and voluntary community contributions reached $17.4bn in the last financial year.

The study finds that the resources boom in Queensland has driven up employment in the mining industry from 18,300 people in 2002-03 to 42,500 last financial year.

Article from The Australian, December 2010.

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