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Economic Impact of Mining Boom

The Economic Impact of the Current Mining Boom on Australia's Tourism Industry
Release: 17/01/2013

This study looks at the economic impacts of the current mining boom at a state and territory level, including for leisure tourism (travel for the purposes of holiday, or to visit friends and relatives – VFR).

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See also: The positive and negative effects of the mining boom – A technical paper
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Key Findings


The mining boom began in the mid-2000s leading to sharp increases in prices for mining-related commodities. It has, to date, delivered mixed impacts across Australian states and territories, and across industries. This is sometimes referred to as ‘Dutch Disease’, whereby a boom in an exporting industry, in this case mining, raises the terms of trade and the value of a currency. This can deliver negative impacts for some other industries involved in export or import substitution.

 

This is a follow-up report to Tourism Research Australia’s (TRA) snapshot on the impact of the mining boom, released in November 2011. It showed that travel activity to the key ‘mining’ tourism regions (and for business more generally) had increased strongly and that accommodation and aviation industries in capital cities and in the mining areas were benefiting from the boom up to that time.

 

This study looks at these economic impacts in more depth at a state and territory level, including for leisure tourism (travel for the purposes of holiday, or to visit friends and relatives - VFR). As tourism is a difficult industry in which to determine the net impacts of the mining boom, a state-based Computable General Equilibrium (CGE) model was employed to help assess this impact.

 

Attempting to quantify the impacts of the mining boom is made more difficult due to the local nature of impacts that currently available statistics are unable to reflect. In order to provide an industry perspective on the statistics and modelling, TRA sought views from representatives from a number of tourism organisations currently active in the mining boom debate, including the Tourism & Transport Forum Australia (TTF), the Australian Tourism Export Council (ATEC), Queensland Tourism Industry Council (QTIC) and the Tourism Council Western Australia (TCWA).

 

Overall, industry feedback confirms the broader trends contained in official statistics, namely, that while the mining boom impact on the tourism industry has been very mixed, it has had a negative impact on leisure tourism. The feedback also highlighted concerns about tourism’s inability to attract and retain skilled staff and the impact that the displacement of leisure travel with business travel (miners) is having on the leisure tourism sector. This report identifies in detail a range of economic impacts of the mining boom, both positive and negative.