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Economic Impact Analysis in a Resource Industry Boom

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Labour Force Mobility in the Australian Resources Industry

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Abstract

In Western Australia in recent decades mining companies have increasingly relied on long-distance commuting (LDC) over the creation of special purpose mining towns. A considerable body of literature now examines the socio-economic issues and challenges for ‘host’ communities associated with the use of fly-in/fly-out (FIFO) arrangements in remote regions, where workers live in company facilities at mine sites during regular block work rotations, and reside during furlough within the Perth metropolitan area, or less frequently, in regional centres offering high lifestyle amenity (Haslam McKenzie 2011, Acil Tasman 2009). A similar body of work documents and analyses economic and social impacts associated with drive-in drive-out (DIDO) arrangements in Queensland (Rolfe et al. 2007). Limited formal assessment has been undertaken of the local and regional economic or social impacts of mine sites in inner regional Western Australia that rely heavily on LDC, with particular focus on a DIDO arrangement. This chapter will use traditional techniques to explore the effect of economic multipliers generated by the resource sector on regional economies. It will discuss economic leakage, why it occurs, what impact it has on those economies, and what trends in the minerals sector need to be taken into account so that the true economic impacts of an operation are recognised.

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Notes

  1. 1.

    An additional benefit is that you can also examine output and employment multipliers using input–output analysis.

  2. 2.

    Following Hoath and Pavez (2013), living locally in this analysis is defined as those employees that maintain their primary residence within a 50-km radius of the mine site.

  3. 3.

    According to the Australian Bureau of Statistics, approximately 80 % of the Western Australian population resides within the Perth metropolitan area.

  4. 4.

    An aggregated version of this input–output table is provided at the end of this chapter in Appendix 5.1.

  5. 5.

    It should be noted that there are many safety issues associated with commuting more than 50 km to and from work daily. However, as this chapter is concerned primarily with the economic impacts as characterised by the income and employment multipliers, they are not discussed in detail.

  6. 6.

    The Minerals Council of Australia (2014) reported in their submission to the Independent Review of Integrity in the Subclass 457 VISA Programme that only 2.1 % of the mining workforce in Australia are 457 VISA holders.

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Author information

Authors and Affiliations

  1. Department of Mineral and Energy Economics, Curtin University, Perth, WA, Australia

    Bryan M. Maybee & Daniel J. Packey

Authors
  1. Bryan M. Maybee
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  2. Daniel J. Packey
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Corresponding author

Correspondence to Bryan M. Maybee .

Editor information

Editors and Affiliations

  1. Centre for Regional Development, University of Western Australia, Perth, West Australia, Australia

    Fiona M. Haslam McKenzie

Appendix 5.1: Aggregated Input–Output Table for the Peel Region

Appendix 5.1: Aggregated Input–Output Table for the Peel Region

 

Agriculture, forestry and fishing

Mining

Manufacturing

Electricity, gas, water and waste services

Construction

Wholesale trade

Retail trade

Agriculture, forestry and fishing

33.62

0.35

17.15

0.03

1.09

0.92

3.71

Mining

0.13

47.56

199.79

0.11

1.65

1.04

0.07

Manufacturing

5.43

9.44

963.62

2.53

84.49

5.49

6.01

Electricity, gas, water and waste services

2.71

2.92

8.53

9.40

9.22

1.18

0.98

Construction

4.94

12.92

11.13

4.73

314.99

3.37

2.93

Wholesale trade

4.68

5.56

12.13

1.62

14.23

4.03

2.72

Retail trade

3.28

2.55

12.30

0.64

11.46

2.12

6.25

Accommodation and food services

0.41

0.27

1.57

0.24

0.77

1.34

1.33

Transport, postal and warehousing

7.15

7.00

33.57

1.10

21.61

9.12

6.52

Information media and telecommunication

0.22

0.16

1.44

0.48

1.77

2.70

4.04

Financial and insurance services

2.48

1.52

3.13

2.94

17.33

3.97

3.92

Rental, hiring and real estate services

2.76

2.08

6.87

0.57

31.09

9.07

9.87

Professional, scientific and technical services

3.21

17.00

6.81

2.46

38.57

11.57

17.42

Administrative and support services

0.46

3.58

7.83

0.37

28.89

3.93

10.91

Public administration and safety

0.11

0.23

0.58

0.13

1.59

0.33

0.63

Education and training

0.09

0.43

0.93

0.24

0.65

0.12

0.23

Health care and social assistance

0.01

0.01

0.09

0.01

0.03

0.01

0.04

Arts and recreation services

0.03

0.07

0.07

0.04

0.37

0.21

0.46

Other services

3.28

2.90

1.86

0.84

8.41

2.66

7.21

Total intermediate usage

75.00

116.55

1289.38

28.49

588.22

63.17

85.25

Compensation of employees

37.60

68.13

391.73

21.02

284.83

53.91

161.38

Gross operating surplus and mixed income

121.39

287.83

1119.36

24.61

247.68

27.79

65.63

Taxes less subsidies on products

2.92

4.44

6.42

1.47

7.46

0.95

1.57

Other taxes less subsidies on production

4.72

2.45

17.41

−0.11

8.11

4.23

9.07

Imports cif

95.37

121.77

4248.83

24.17

405.59

40.84

103.18

Production

337.00

601.17

7073.11

99.66

1541.91

190.89

426.08

 

Accommodation and food services

Transport, postal and warehousing

Information media and telecommunication

Financial and insurance services

Rental, hiring and real estate services

Professional scientific and technical services

Administrative and support services

Agriculture, forestry and fishing

3.96

0.21

0.15

0.02

0.64

0.15

0.26

Mining

0.03

0.12

0.04

0.02

0.09

0.26

0.16

Manufacturing

8.65

5.07

1.70

0.18

2.46

1.40

1.34

Electricity, gas, water and waste services

1.86

1.57

0.60

0.11

2.31

3.36

2.15

Construction

2.89

0.94

1.41

0.21

11.04

3.11

1.32

Wholesale trade

2.34

6.34

1.98

0.46

1.74

3.80

2.17

Retail trade

3.87

4.95

0.86

0.29

2.53

1.47

1.38

Accommodation and food services

0.42

0.74

0.73

0.54

0.78

2.51

1.55

Transport, postal and warehousing

4.36

11.61

1.51

0.96

2.32

4.91

3.20

Information media and telecommunication

2.19

1.13

4.56

0.98

2.24

4.62

2.09

Financial and insurance services

2.53

1.74

1.51

49.05

21.95

4.32

1.97

Rental, hiring and real estate services

5.15

4.24

2.07

1.21

43.73

5.92

6.75

Professional, scientific and technical services

3.42

6.52

2.58

3.42

15.40

43.41

9.06

Administrative and support services

6.88

4.20

2.83

3.14

14.01

9.93

7.68

Public administration and safety

0.12

1.26

0.54

0.09

0.51

1.54

0.62

Education and training

0.21

0.27

0.08

0.66

0.61

1.40

0.88

Health care and social assistance

0.02

0.06

0.02

0.45

0.03

0.04

0.10

Arts and recreation services

0.24

0.03

0.67

0.12

0.22

0.96

0.39

Other services

1.01

11.13

1.39

0.74

2.22

2.57

2.33

Total intermediate usage

50.15

62.13

25.24

62.66

124.82

95.68

45.38

Compensation of employees

51.75

64.75

14.23

88.62

65.35

81.04

55.51

Gross operating surplus and mixed income

20.50

44.63

23.33

96.48

208.08

31.40

5.13

Taxes less subsidies on products

6.33

8.79

0.50

2.00

6.69

2.65

1.01

Other taxes less subsidies on production

2.07

5.58

0.61

4.50

12.26

2.32

0.89

Imports cif

59.23

71.22

13.05

31.07

85.47

38.01

26.88

Production

190.03

257.09

76.98

285.33

502.66

251.10

134.80

 

Public administration and safety

Education and training

Health care and social assistance

Arts and recreation services

Other services

Total industry uses

Agriculture, forestry and fishing

0.10

0.26

0.03

0.71

0.35

63.70

Mining

0.17

0.03

0.02

0.04

0.06

251.38

Manufacturing

1.28

2.62

1.12

1.18

3.79

1107.80

Electricity, gas, water and waste services

0.66

1.97

0.56

0.33

1.38

51.81

Construction

2.19

0.47

0.25

0.21

0.70

379.77

Wholesale trade

0.95

4.11

2.00

1.30

4.99

77.15

Retail trade

0.38

2.06

1.37

0.91

2.10

60.77

Accommodation and food services

0.74

0.74

0.14

0.47

0.47

15.77

Transport, postal and warehousing

1.77

3.20

1.40

1.31

2.62

125.22

Information media and telecommunication

1.64

3.84

0.56

1.26

1.41

37.32

Financial and insurance services

3.15

1.71

1.15

1.01

1.97

127.35

Rental, hiring and real estate services

0.94

1.41

0.75

2.44

3.46

140.40

Professional, scientific and technical services

4.62

2.69

1.88

2.60

5.03

197.67

Administrative and support services

1.94

5.11

1.51

3.14

2.41

118.75

Public administration and safety

2.28

0.94

0.19

0.12

0.61

12.43

Education and training

0.26

2.78

0.21

0.46

0.53

11.03

Health care and social assistance

0.08

0.22

0.62

0.02

0.08

1.95

Arts and recreation services

0.14

1.37

0.22

2.50

0.14

8.26

Other services

0.47

0.93

2.17

0.63

1.27

54.05

Total intermediate usage

23.75

36.49

16.15

20.65

33.39

2842.57

Compensation of employees

78.69

128.01

172.22

18.04

38.18

1874.98

Gross operating surplus and mixed income

13.28

12.55

28.34

9.69

9.72

2397.43

Taxes less subsidies on products

0.27

0.84

0.36

0.36

1.20

56.22

Other taxes less subsidies on production

0.97

4.49

2.78

1.05

3.59

87.01

Imports cif

15.42

47.21

21.52

24.65

50.56

5524.03

Production

132.39

229.59

241.37

74.44

136.64

12,782.23

 

Households

Government

Gross fixed capital formation

Exports

Total final demand

Total supply

Agriculture, forestry and fishing

24.34

1.00

10.60

237.36

273.30

337.00

Mining

0.15

0.15

27.38

322.13

349.80

601.18

Manufacturing

61.62

0.11

26.99

5876.81

5965.53

7073.33

Electricity, gas, water and waste services

21.47

1.81

8.02

16.53

47.84

99.65

Construction

2.44

4.30

395.37

760.04

1162.15

1541.91

Wholesale trade

43.49

0.59

51.24

18.40

113.71

190.86

Retail trade

273.06

3.05

18.81

70.36

365.28

426.05

Accommodation and food services

155.54

0.02

0.05

18.65

174.26

190.04

Transport, postal and warehousing

34.22

5.22

9.64

82.78

131.87

257.09

Information media and telecommunication

26.92

3.09

6.59

3.06

39.66

76.98

Financial and insurance services

153.91

0.05

1.06

2.96

157.98

285.33

Rental, hiring and real estate services

165.36

0.35

30.57

165.99

362.27

502.66

Professional, scientific and technical services

7.97

5.10

22.01

18.35

53.43

251.10

Administrative and support services

2.45

4.79

0.68

8.13

16.05

134.80

Public administration and safety

4.26

107.35

2.80

5.53

119.94

132.37

Education and training

81.14

61.78

3.48

72.17

218.57

229.59

Health care and social assistance

76.59

96.20

1.63

64.98

239.41

241.36

Arts and recreation services

45.02

6.57

0.39

14.20

66.18

74.44

Other services

78.96

0.64

0.13

2.86

82.59

136.63

Total intermediate usage

1258.91

302.19

617.44

7761.29

9939.82

12,782.39

Compensation of employees

0.00

0.00

0.00

0.00

0.00

1874.98

Gross operating surplus and mixed income

0.00

0.00

0.00

0.00

0.00

2397.43

Taxes less subsidies on products

202.31

0.01

2.64

0.11

205.07

261.29

Other taxes less subsidies on production

0.00

0.00

0.00

0.00

0.00

87.01

Imports cif

1936.43

100.47

374.06

16.60

2427.56

7951.59

Production

3397.65

402.66

994.13

7778.00

1,2572.45

25,354.68

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Maybee, B.M., Packey, D.J. (2016). Economic Impact Analysis in a Resource Industry Boom. In: Haslam McKenzie, F. (eds) Labour Force Mobility in the Australian Resources Industry. Springer, Singapore. https://doi.org/10.1007/978-981-10-2018-6_5

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  • DOI: https://doi.org/10.1007/978-981-10-2018-6_5

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