Australia: Job losses mount amid stalling economy

Job losses are escalating across Australia as major companies in all sectors, including mining—once held up by the Labor government as the engine to drive continuous growth—slash their workforces.

The official unemployment rate jumped 0.2 percent to 5.7 percent in June, the highest rate since September 2009, during the initial phase of the global financial crisis. However, that toll, which now exceeds 700,000 workers, only counts those who have worked less than one hour a week. If the “underemployed” are included, the total easily exceeds a million.

The government is also using welfare benefit rules to further disguise the true level of unemployment. Many of those receiving unemployment benefits have been forced into dead-end training and education schemes and have been classified as non-jobseekers. According to one estimate, their numbers have artificially reduced the jobless rate by between 0.2 and 0.5 percent.

The latest figures released last Friday in the federal Labor government’s economy statement all point to a continuing economic downturn with predicted growth falling from 2.75 percent in 2013-14 to just 2.5 percent and the unemployment rate revised upwards from 5.75 percent to 6.25 percent.

Under the impact of falling commodity prices and shrinking demand, fuelled by a deepening global economic crisis and a slowdown in China, mining companies are axing jobs to cut costs and maintain profits.

US mining giant Peabody Energy last month announced the destruction of another 170 jobs, or 5.7 percent of its Australian workforce, on top of the 450 it shed weeks earlier from New South Wales and Queensland mines. More than 1,000 coal mining jobs were axed in June by companies such as Glencore Xstrata, Premier Coal and Vale, and 11,000 were lost nationally over the past 12 months.

The mining downturn continues to hit related industries. Last week, Mining Equipment Maintenance slashed 100 jobs in Queensland and will soon axe its remaining 18 jobs. The company was part of the Brisbane-based DPSA Group, a services and supply group that went into receivership.

In Western Australia, where almost 5,000 jobs have gone in the state’s mining sector, including in iron ore and gold, during the past year, the Chamber of Commerce and Industry reported that employment fell for the first time since the global crisis began in 2008. Almost 30 percent of businesses shed staff in the June quarter and 22 percent expected to do so within the next three months.

In Queensland, another mining state, unemployment in June rose by 0.5 percent to 6.4 percent, well above the national average. Last month, Queensland rail freight company and coal hauler Aurizon said it would further cut jobs to save $130 million. Over the past two years, the recently privatised company has already eliminated 1,600 positions.

Zinc miner Terramin last month announced the closure of its mine near Strathalbyn in South Australia at the cost of 115 jobs. Copper and gold miner OZ Minerals confirmed it would cut 61 jobs at its Prominent Hill mine site, also in South Australia.

Thousands more jobs are expected to go in the construction sector, which has contracted for 25 months in a row. Between June 1 and July 18, almost 100 companies in the building and related industries collapsed, 23 of them in Victoria, 45 in New South Wales and 15 in Queensland. They included JBP Construction, Paint Rite Australia, Quick Home Australia and Kona Constructions and Maintenance.

In May and June, several major construction companies made earnings downgrades, including Lend Lease, WorleyParsons, UGL, Coffey, Calibre Group and Transfield Services. In July, construction company Q Structures in South Australia axed 50 jobs.

The elimination of manufacturing jobs is also continuing. The Federation of Automotive Products Manufacturers (FAPM) has warned that a “domino effect” will hit associated industries if lay-offs continue in the car industry. The warning followed 400 job cuts at General Motors Holden in South Australia and Ford Australia’s announcement that it will cease all production by 2016.

FAPM estimated that 300,000 jobs could be wiped out across the sector in the next five years. Last month, car parts manufacturer ACL said it would cease operations in the island state of Tasmania before mid-2014, shedding 136 positions.

In Tasmania the unemployment rate in June soared to 8.9 percent, from 7.5 percent the previous month. Last month, hundreds more jobs were shed. Australian Weaving Mills announced the closure of its Devonport operation at the cost of 50 jobs and Lion Nathan National Foods said it would close its cheese manufacturing site in Kings Meadows by August, destroying 170 jobs.

Also in Tasmania, Bell Bay Aluminium cut 18 jobs in July while OneSteel announced the closure of its Bell Bay recycling business at the cost of 12 jobs. Also, international steel castings company Bradken will slash 33 jobs, one-third of its workforce in Launceston, and Launceston City Council eliminated 11 jobs from its asphalt operations.

Other companies nationally announcing job cuts include communications provider Telstra , which will axe 55 positions by restructuring its digital media and IPTV division and another 54 from its customer service centre in Newcastle, NSW. In tourism, Lonely Planet will axe between 70 to 100 jobs.

In the media, Fairfax Media cut 50 jobs from the Illawarra Mercury and the Newcastle Herald , both in NSW, as part of a drive to save $60 million this year.

Across other sectors, Stanwell Corporation will axe 29 jobs from its power station near Rockhampton in Queensland and Australian Defence Apparel will shed 58 positions from its plant in Bendigo, Victoria.

The Labor government is intensifying the jobs crisis by eliminating thousands of federal public sector jobs and by driving similar cost-cutting by state governments. At the same time, Labor is backing every corporate restructure, as part of Prime Minister Kevin Rudd’s “national competitiveness” agenda, working closely with the trade unions to suppress any resistance by workers to closures and retrenchments.