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Major projects expected to produce mixed bag for regional communities

AT the height of the construction phase of BHP’s DRI project, the town of Port Hedland in the State’s North West swelled to its limits with a transient work force.

Property and rental prices were driven to unprecedented levels as demand dramatically outstripped supply, pricing many locals out of the market at levels that rival current house prices in Perth’s western suburbs.

The Port Hedland Town Council struggled to cope with the demands of a burgeoning population that consisted of both fly-in fly-out workers and temporary and full-time residents.

While temporary solutions were found at the time, Port Hedland Mayor Brent Rudler said the Port Hedland Town Council was more prepared this time around as it waited for the next big wave of resource projects to hit.

“This time its going to be a steady growth,” he said.

“I think its going to be more manageable by the town.”

Mr Rudler said while major resource projects were good for Port Hedland and contributed to the local economy, concern remained regarding some of the social and economic impacts that would result.

While accommodation prices remain sensitive to market pressures, wages in the town are also likely to rise as a skills shortage meant resource giants had to lure workers to town on the promise of higher salaries.

This proved both a blessing and curse, Mr Rudler said, as it meant small businesses in the town would have to match those wages or risk losing workers to the big resource projects.

He said health care and education remained concerns for residents, with the town’s hospital still a “temporary” structure after 28 years and many families either sending their children to boarding school or leaving the north west when their children reached high school age.

However, he said quality of life was likely to improve as the Port Hedland Town Council in conjunction with the WA Government and companies such as BHP Billiton worked to develop industries such as tourism and improved public amenities and facilities.

As the resource boom continues other towns impacted by major resource projects are also either experiencing or bracing themselves for the mixed blessings these projects bring.

On the back of the nickel boom the historic town of Kambalda is swollen to capacity with its population growing to 5,000 and local companies encouraging families to locate to the town with a range of incentives including flexible work hours.

Just up the road in Kalgoorlie it is a similar story as the mining town reaps the benefits of a continuing strong gold price.

Further north, however, Roebourne Shire president Kevin Richards said developments on the North West Shelf would not bring significant local economic benefits if the operational workforce remained FIFO once the construction phase was complete on projects such as Burrup Fertilisers and Woodside’s Train 4.

Mr Richards called on the Federal Government to develop incentives, such as through the tax system, to make living in the Pilbara more appealing and help build communities.

“There are financial benefits [of major resource projects] but not to the extent that local people would like to see,” he said.

“What incentive is there for people to live in the Pilbara? It costs them more money than living in Perth.”

Chamber of Commerce and Industry chief economist Nicky Cusworth said the economic benefits of the resources boom were clearly evident with increased State and Federal government royalties in the past three years.

WA Government royalties have been significantly higher than originally budgeted over the past three years. It reaped $157 million more in royalties than expected.

In the 2002-03 budget, the WA Government expected to take $979 million in royalties. However, its May 2003 budget papers show actual revenues were $1,136 million.

While State and Federal royalties provide one measure of the impact of the resource boom, the social and economic impacts prove harder to measure.

Ms Cusworth said on the back of the resource boom WA contributed almost 30 per cent of Australian exports in the 2003 calendar year – the largest contribution made by the State to date.

She said WA had experienced an average of 7.6 per cent growth each year for the past three years to the December quarter.

However, Ms Cusworth said the impact of the boom was broad reaching with secondary and support industries experiencing benefits over time.

 

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