This was Friday’s headline in the West Australian:
This appeared in the West the next day:
WA’s iron ore miners gear up for big spend as boom returns to the Pilbara
WA’s big iron ore miners are gearing up to spend $25.5 billion to extend the life of their Pilbara iron ore operations, according to investment bank UBS, with the mini-iron ore boom promising jobs, growth and a new wave of construction work.
Analysis by UBS shows the Pilbara’s three biggest iron ore miners plan to build $9.5 billion worth of new mines in the next four years — including BHP’s $4.7 billion South Flank mine, announced on Thursday, Fortescue Metals Group’s $1.7 billion Eliwana development and Rio Tinto’s planned $3 billion spend on a mine at Koodaideri.
BHP and Fortescue need to build new mines to continue their existing production rates, and Koodaideri is required if Rio wants to hit its ultimate plan of exporting 360 million tonnes of high-quality iron ore from the Pilbara.
South Flank will create about 2500 construction jobs, Eliwana about 1900 and Koodaideri likely to generate about the same amount when Rio approves its development.
Let’s keep some of those numbers in mind…
This was The West’s ‘economics editor’ (and regular ABC Insiders ‘panellist’) Shane Wright 6 months ago, struggling to figure out where WA’s economic growth was going to come from – you, know, because it couldn’t possibly come from mining. Absolutely not. No way. You got that?
Where is WA’s economic growth going to come from?
Over the past six months the WA economy, excluding imports and exports, grew about 1.3 per cent or a touch over $660 million.
For a State that’s gone the rounds of economic pain for so long, it was a great result.
But we’ve got to put this in some context. Domestic economic activity in WA peaked at $60.4 billion in the September quarter of 2012. The same figure for the just-completed September quarter was a smidgen under $51 billion.
In other words, there is more than $9 billion less in local economic activity running through the financial veins of WA taxpayers and businesses.
That’s the pain that we’ve all felt over the past four years.
It is hard to expect another mining boom to generate a huge lift in wealth and activity. The last boom was the biggest since the 1850s gold rushes that made Victoria one of the richest parts of the world (like the iron ore boom made WA one of the richest spots on the planet).
For instance, it took just 15 months for State final demand to climb from $50 billion to $60 billion. The quantum of that climb is what WA needs to make up just to get back where it was — but the chances of it taking just 15 months is akin to the Gold Coast winning next year’s premiership flag.
This was TMR’s take at the time:
One can only guess that Shane thinks we need to be demanding more iPads to lift the WA economy. And just what do they make those out of I wonder?…
The problem with leftists like Shane is that they seem to think that economies are demand driven – and that you can simply drive an economy by ‘stimulating demand’, with everything else following thereafter (which is akin to watering nothing but the leaves of a plant and expecting it to grow properly). It’s why people like Shane incredibly have no idea where WA’s economic growth is going to come from. Presumably, Shane would have people dig holes, fill them up and re-dig them in the exact same spot and call it economic activity – while advanced aliens from outer space looking down on the whole affair would wonder what species of Neanderthal they were observing.
One can only imagine the bunch of flies that must be buzzing around in Shane’s brain when he sees that it’s the supply side yet again doing the heavy lifting and driving the rest.
Keep gettin’ dem cheques Shane!
That’s ok Shane, you keep looking at that iPad price parity index and working that impotent grey matter of yours on the big things.
Suffice to say, Shane Wright is a hack of the highest order and his brand of pathetic slop shouldn’t be allowed to go through to the keeper anymore. Given that he’s a regular on the ABC, it’s not just a Western Australian problem either:
Shane Wright is the Economics Editor of The West Australian. He joined the Canberra Press Gallery in 2000, working initially for Australian Associated Press. Prior to Canberra he had kept track of the nation’s economic machinations from The Border Mail, The Daily Advertiser and The Cootamundra Herald. When not reading old Budget papers, Wright listens to the music of Kate Bush while dreaming of a Collingwood premiership.
If The West could see to amending his position description from economics editor to entertainment contributor, then that would probably fix things… and maintain The West’s equal employment credentials for good measure.