Did the mining boom save Australia from the GFC? > Check the facts
Who: "Everybody knows we were the bedrock of getting Australia through the global financial crisis." Mitch Hooke, Chief Executive of the Minerals Council of Australia.
The Claim: The mining boom saved Australia from the global financial crisis.
The Facts: While Australia did not go through a recession during the GFC, the mining industry did.
Discussion of evidence: The Commonwealth Treasury studied the resilience of the Australian economy during the GFC in a report in September 2011. The report found it was the combination of lowering interest rates and the fiscal stimulus that maintained the Australian economy through the GFC.
When reporting to Senate estimates Ken Henry the then head of Commonwealth Treasury had this to say about the role of the mining industry during the GFC:
“In the first six months of 2009, in the immediate aftermath of the shock waves occasioned by the collapse of Lehman Brothers, the Australian mining industry shed 15.2 per cent of its employees. Had every industry in Australia behaved in the same way, our unemployment rate would have increased from 4.6 per cent to 19 per cent in six months. Mining investment collapsed; mining output collapsed. So the Australian mining industry had quite a deep recession while the Australian economy did not have a recession.” (Page E17.)