At the end of 2008, it was difficult to move in Perth, without bumping into someone who had just been laid off by a mining project.  When meeting someone new, a frequent response to the question, “what do you do,” was, “I used to work on {insert mining project here}”.

At this time, news bulletins were filled with stories of projects closing down or cutting workforces.  The mining industry wasn’t sentimental in its response to the global financial crisis.

Fast forward to 2012 and the tables have turned.  Mining projects, irrespective of the impact of the mining or carbon taxes, are progressing full steam ahead.  And the high value of the Australian dollar, predicated on the high prices of our coal, iron ore and LNG exports, is making all of our secondary industries less competitive with their international competition.

News stories are now dominated by news of one manufacturing operation or another closing, or shifting their operations offshore.  Not limited to manufacturing, we are seeing engineering services shifted offshore, as well service industries like education exports.

This week, we have learned that UGL Rail will shift its rail fabrication operations to India, with unspecified job losses in Australia.  Rumours of more job losses at OneSteelare circulating at the time of writing.  And there are reports Alcoa has offered large incentives to workers at its Geelong plant to work at its new cut-price smelter in Saudi Arabia.

The resources construction boom is delivering a number of benefits to the Australian economy and it underpins the growth and unemployment statistics that governments point to, when spruiking the health of the economy.  However, these statistics mask the qualitative truth that the economy is benefiting from a large number of short term resources construction jobs, and the multiplier effect of these jobs, while there is a steady stream of jobs being lost in long-established secondary industries.

Arguments put forward by right wing economists, that suggest governments should do nothing to support “uncompetitive” industries, ignore the fact that the challenges our secondary industries face are based on the short-medium term impact of the mining boom.

Our State and Federal Governments have a choice.  They can stand by and do nothing, patting themselves on the back, as the mining boom forces our secondary industries offshore to remain competitive.  Or they could do what countries as diverse as the United States, Canada, Malaysia, China and the Ukraine are doing, and take strong action to support local jobs.