Published 24 March 2021
The Hunter Valley is the largest regional economy in Australia, making up roughly 8% of NSW’s economy and indirectly driving around 28% of the state’s economic output. The Hunter is our biggest wine region, in addition to producing milk and commercial pasture seed. The Hunter is also the state’s largest coastal catchment and hosts Australia’s largest saltwater coastal lake and an internationally significant wetland estuary. However, the majority of the region’s wealth is currently dominated by coal mining. The Hunter is the biggest thermal coal region in the country and hosts a third of New South Wales’ power generation.
The Grattan Institute has estimated that the Hunter Valley has 16,300 workers in high carbon intensity work, particularly thermal coal mining. But the mining industry and our four coal fired power stations also underpin much broader activity – the Tomago aluminium smelter, for example, supports 4,000 jobs.
It’s a diverse region, with large numbers of people working in manufacturing, health and all levels of education, but the dependence on mining is most pronounced in Singleton and Muswellbrook, where mining contributes 58% of economic output and employs around 40% of people.1
While Hunter region has higher average incomes than many parts of NSW and generates more gross regional product than any other region, these averages mask pockets of disadvantage. Young people have lower high school retention rates and worse mental health than the average, Aboriginal people have higher rates of unemployment, lower educational attainment and lower incomes and sole parent families have higher unemployment and lower incomes. The town of Muswellbrook is a notable pocket of disadvantage amid the broader regional prosperity. Aboriginal unemployment is 21%, the percentage of people receiving welfare in the Shire is twice the Upper Hunter average and on the index of social disadvantage, Muswellbrook scores poorly compared to other LGAs and NSW generally.
“Now is the time to prepare for change. Four of NSW’s five coal fired power stations are expected to close in the next 15 years, and all of them are in the greater Hunter region.”
The signposts are clearly telling us that now is the time to prepare for change. Four of NSW’s five coal fired power stations are expected to close in the next 15 years, and all of them are in the greater Hunter region – two in Lake Macquarie and two in Muswellbrook. The countries that buy our export coal are committing to net zero emissions and introducing policy to control air pollution and respond to climate change. There was a dramatic drop in the price of coal six years ago when world coal production fell by 221 million tonnes and consumption of coal began to fall too. That experience gave us a taste of what is to come. The Hunter mining industry responded to it by laying off several thousand workers and increasing overall production.
Every region that fails to respond to economic change says two things: we wish we had started planning when we had a chance, and we wish we had worked together. This sentiment is reflected in the academic literature. A synthesis study of coal mining regions around the world that have experienced structural decline found that the process left long-term effects on specific regions, often with high dependency ratios, low educational attainment, below average wages, wage stagnation and environmental problems related to site remediation and that this legacy is in part due a failure to anticipate and prepare for the transition. This research underscores the importance of anticipation, the length of time adjustment takes, the scale of investment needed, the importance of local knowledge and, crucially, the degree of acceptance in the community about the need for adjustment.
The people of the Hunter have experienced mining downturns and have the knowledge, relationships and commitment to managing our own adjustment. We need governments to back the community and local leadership to do this.
Places like Cessnock, which recently saw the last of its coal mines permanently close, already know the long legacy of disadvantage that coal mining leaves in its wake. It is a common feature of coal mining and resources communities that they have had previous experience of structural adjustments, either because of commodities cycles, changing global markets or government decisions like privatisation of the electricity sector. These communities have direct understanding of the successes and pitfalls of such processes and this is knowledge the NSW Government and the industry need if we are to manage transition and diversification processes in a way that leads to greater sustainability, prosperity, security and opportunity.
Moreover, the people of this region love and value their home and have more invested in what it looks like in the next half a century than most of the political and corporate players talking about the region from outside. But big decisions about land use, economic planning and the future of the Hunter are not being made here.
Around 80% of the coal Australia mines is exported. That’s where the bulk of those 16,000 livelihoods are based. So the future of our industry and our region at this point depends on decisions made in other countries – particularly Japan, South Korea and China – and in the board rooms of the mostly foreign-owned mining companies that operate here. The political culture in Australia means our governments are letting the interests of capital and the market make the big decisions about decarbonisation in Australia. That approach will leave workers and the environment in the lurch.
“Governments have given corporations more power and trust than they give the public.”
We’re already a long way behind precisely because governments have given corporations more power and trust than they give the public. Work is insecure and its conditions are anti-social. Income inequality is growing, biodiversity is in crisis and we are on track to leave our children and descendants with catastrophic climate change.
The NSW Government, the Reserve Bank and the Port of Newcastle are all aware that structural decline of thermal coal is coming, and that it will hurt the Hunter much more than it will hurt the rest of the country, but they have not given the people with the most passion and energy and the biggest stake in the problem a seat at the table to chart our way out of it.
This is why thirteen local and state-wide unions and environmental advocacy groups have come together to create the Hunter Jobs Alliance – a historic collaboration to move beyond the stale ‘jobs versus environment’ sloganeering that is preventing the region from forging its path to adjust and transform in response to declining markets for coal.
“The Hunter Jobs Alliance moves beyond the stale ‘jobs versus environment’ sloganeering that is preventing the region from forging its path to adjust and transform in response to declining markets for coal.”
The Alliance is an initiative of the Australian Manufacturing Workers Union which teamed up with Labour Environment Action Network to bring the other organisations together to focus on a shared vision of full employment, good union jobs, a thriving and healthy living environment, an equitable society, a stable climate, and renewable prosperity.
This is not about loading up action on climate change with extraneous issues that become obstacles to effective action. Just the opposite. It is a recognition that unsustainability and social injustice are bound up with causing climate change and are obstacles to us preventing it from getting much worse. It is a recognition that involving people in conversation about these difficult issues makes it easier, not harder and that openness and consensus are our only option.
One of the difficulties the Hunter Jobs Alliance is confronting is the political simplification and sloganeering that has hampered Australian climate change and energy policy for years. If you listen to some politicians, the Hunter region has no choice but to chain our fate to the thermal coal market. If you listen to some environmentalists, it seems like action on climate change is simply a matter of technology.
But meeting climate change commitments is not a simple matter of replacing coal power station with renewable energy, particularly in the Hunter where coal mining for export, aluminium production and other energy-intensive industry play complex and crucial roles in the region’s economy, culture and identity. Coal’s material role in shaping identity, a sense of place and social and cultural institutions in generational mining regions must be the foundation for any effective diversification strategy.
Technology is crucial of course. Innovation can save the Tomago aluminium smelter and the Hunter region’s industrial base and ensure that Hunter aluminium can compete in a low-carbon world, but not without timely structural incentives and public investment. Not without a public that sees and understands why these investments are being made. Similarly, the region’s 150 million tonnes of polluting waste coal ash can become the basis of new manufacturing and construction projects that will reduce heavy metal pollution and greenhouse gas emissions, but this will only happen with policy shifts that penalise the power stations for leaving he ash to languish and pollute waterways. Environmental action is job creation.
The Hunter Jobs Alliance is united behind a call for a locally controlled public process to involve the public and stakeholders in planning for and adjusting to closure of power stations and changes in the thermal coal market, rather than leaving the people, landscapes and communities that have contributed so much to New South Wales’ prosperity to the cruel mercies of the market.
1. Perry, Neil and Gillian Hewitson. UWS. Weathering the Storm: the case for transforming the Hunter Valley. January 2019.
Georgina Woods is speaking next month at the Reimagining Climate Adaptation Summit, held virtually on 19-22 April. The summit, co-hosted by Future Earth Australia, in partnership with the Sydney Environment Institute (University of Sydney) and the Institute for Culture and Society (Western Sydney University) will discuss Australia’s need for an evidence-based policy response to the range of emerging threats posed by environmental change.
Georgina Woods is a founding member of the Hunter Jobs Alliance, a new initiative of thirteen local and statewide unions and environmental advocacy groups in the region. An established figurehead as a Newcastle environmentalist, Georgina focuses her efforts on community-based transition alliances and actions.