Despite promises to the contrary, real wages in mining declined under the Albanese Labor Government. Anthony Albanese came to government promising to introduce “same job, same pay” laws, which Labor claimed would allow miners to earn more.
While wages have gone up in mining by 14 per cent under Labor, so have prices. According to the Australian Bureau of Statistics, the cost of living for employee households has gone up by 19 per cent since Labor was elected. So the average Australian miner has seen just a 5 per cent real wage decline over three years.
In real dollar terms, the average miner is $6000 a year worse off compared to when Labor got into government.
The false promise offered by Labor is that somehow a politician can give you a pay rise. Your real pay is instead determined by real things. The real health of the industry you work in and the health of the overall economy.
Over the past three years the coal mining industry has been very healthy. Coal prices hit record highs after the impact of the Ukraine war. This has allowed coal miners to receive increases in their pay in recent years.
It’s just that those increases have been almost entirely eaten up by the rising price of everything under this Labor government. There is not much point in getting a pay rise if your mortgage payments, grocery bills and fuel costs all go up, too.
On this score, the last few years have been a missed opportunity for Australia. Thanks to the booming coal prices (and iron ore and gas prices too), the Australian Government has run its first surplus budgets since the Global Financial Crisis. But this wealth has been wasted and we have a weaker economy with higher interest rates to thank for it.
Over the past three years, our labour productivity has fallen by 5.7 per cent. There has never been a drop like this in recorded history.
The only sustainable way to increase real wages over time is to increase productivity.
If our productivity had not declined under Labor, and instead grown over the past three years at its historical average of 0.9 per cent a year, then the average coal miner would have received a $4000 per year pay increase in real terms.
In the coal mining sector, investment has not kept pace with the boom in commodity prices. During the last mining boom of the early 2010s, capital investment in coal mining peaked at $13 billion a year. During the post-Ukraine war mining boom (which recorded higher coal prices) capital investment in Australian coal mining peaked at just $8 billion.
This is because there is a lack of confidence that the Labor Government supports the long-term health of the coal industry. Labor ministers regularly talk of the need for a “just transition”. They have promised that coal miners can get jobs in a mythical hydrogen industry that shows no signs of arriving anytime soon.
Why would anyone invest in Australian coal if the Australian Government does not see a long-term future for the industry? And, if no one invests in Australian coal then productivity and wages will decline for coal miners.
The strange disconnect between Canberra and coal mining towns is that Canberra sees an industry in decline even though coal demand has never been stronger. The world hit another record for coal demand last year.
The challenge for the new government is to adopt policies for coal mining that are based in the real world – policies that will produce real wage gains for coal miners.
Hon Matt Canavan
Senator for QLD
