Australian Financial Review

Tuesday, July 30, 2013 Page : 42 Section : Edition : Region : National Metropolitan

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Editorial&Opinion
The mining and gas industries ad campaign does a poor job of attempting to shift the focus from their private profits to the national interest.
Another day, another expensive advertising campaign from an industry group seeking to pressure the government. Not content with bidding up the prices they paid for construction workers, now it seems the mining and gas industries are about to bid up the price of prime-time TV advertising slots in their contest to claim backbone of the nation status. The freeto-air TV stations must love it. The centrepiece of a modern advertising campaign for a vested interest is to shift the focus away from private profit and onto the national interest. And the best way for foreign-owned resource companies to appear concerned with the Australian national interest, their polling tells them, is to talk about jobs. And so it is that this week APPEA, the peak body for gas companies operating in Australia, claimed that, unless we stop complaining and let them sink as many gas wells across our agricultural land as they want, Australia will miss out on 150,000 jobs. They also claim to have increased employment by 100,000 in the last year alone. That seems quite a lot given that the ABS says the oil and gas industry only employs 24,700 people and there was an increase of 7,600 jobs in the last year. In an era in which Coca-Cola is spending its shareholders money running an anti-obesity campaign, perhaps we shouldnt be surprised that capitalintensive, small employers like mining and gas exploration would pretend to be concerned about jobs. I know, I know, Im ignoring all of the
investments create but, then again, economists ignore trivial impacts all the time. The idea that creating a job in one industry would create three, four or five indirect jobs in other industries was dismissed by academic economists decades ago. But it seems that some people just cant give up hope that such multipliers can be found. Last year Santos commissioned modelling that purported to show that coal seam gas extraction in NSW would create lots of jobs across the rest of the economy. Indeed, the multiplier effect associated with gas extraction in the Liverpool Plains was so strong, we were told, that Santoss plans to employ 30 people would lead to the creation of thousands of new jobs which would include 570 new jobs in the public sector. Seriously. Santos claimed that. And this week its peak body is claiming that unless our politicians ignore the concerns of farmers, regional communities, health professionals and climate scientists the industry will lose five times more jobs than it currently employs. Not that long ago big business in Australia was very concerned about the impact of rising energy prices on jobs. The introduction of the carbon price, we were told, was going to decimate the Australian manufacturing industry. But while the introduction of the carbon price prompted a hysterical response from some manufacturers, the impact of coal seam gas on wholesale gas prices has prompted a muted response. This is despite Australian Industry Group saying the LNG price shock is four times larger than the carbon price shock, and this adjustment comes without compensation, assistance or responsive policy. The LNG price shock that AIG is referring to results from the impending

Richard Denniss

linkage of the east coast gas market to the Asian gas market via the export terminal being constructed in Gladstone. Put simply, Australias east coast gas production is currently land-locked, but as soon as the export terminal is built, the gas companies will charge local customers the much higher Asian gas price. The claims by the gas industry raise more questions than they answer. And its advertisements stretch the definition of truth almost as far as Coca-Colas newfound concern with obesity stretches credulity. Children are taught in schools how to recognise advertisements and focus on the motives of the advertiser more than the claims. If the gas and mining industries believe their advertisements work, then maybe it is time our politicians were made to sit through a similar class. Sugar breakfast cereal is not really an important source of energy and building CSG wells isnt really a good way to create jobs.
Richard Denniss is executive director of The Australia Institute.

The idea a new job in one industry would create three or four indirect jobs elsewhere was dismissed years ago.

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