A submarine-led recovery for the Hunter Valley?

Communities across New South Wales should be warned. With a federal election due later this year, and a NSW state election early in 2011 locals, would be wise to check out those big announcements that MPs love making, particularly in marginal seats. And when it comes to the NSW election that is about half the state.

The need for locals to be alert, very alert, was seen early this year when Premier Kristina Kenneally announced plans to develop Newcastle Port as a defence industry hub.

After a year of being scarred by the scandals of many of her ministerial colleagues, local member and Minister for the Hunter, Jodi McKay will milk this announcement, made by the Premier at the Pacific 2010 International Maritime Exposition in January at every opportunity in the lead up to the March 2011 state election.

There are however, serious doubts as to whether this is a good news story for the region.

Establishing a Hunter defence hub would involve winning federal government contracts for some of the 12 new submarines set to replace the ageing Collins Class submarines, securing a section of the port land for the facility and building, with state government support, the required infrastructure.

Under the NSW government plan the University of Newcastle and local TAFE would have a role in training and educating the workforce for the hub.

The Greens’ overarching concern is that the government should not develop local economies to become dependent on war industries.

Minister McKay and many of her colleagues in both the Labor and Coalition parties will argue that a Port Newcastle defence hub will bring jobs and skills to the region and an economic boost to the state. This is tunnel vision economics however.

Studies have shown that spending public money on non-military areas creates more jobs. Employment growth in the US occurs at a faster rate for each government dollar injected into health care, public transport and construction compared with the military.

Significantly, education spending reaps the best return on money invested when compared to defence spending. A Massachusetts' report into domestic spending priorities found that $1 billion allocated to education, on average, generates double the number of jobs and higher paying jobs compared with military spending.

Using public money to build defence capabilities is not the best way to serve the public interest.

So before Ms McKay does the re-announcements and poses at the photo opportunities to promote the Hunter defence hub proposal, the Labor government should bring forward an industry policy that sets out their vision for how to use public money wisely to create sustainable jobs.

The lack of a viable industry policy at a regional and national level combined with poor trade policies have led to a flood of job losses. This has hit regional areas hard. Sadly Labor governments have stood back and allowed jobs to go offshore.

As Australia comes out of the global financial crisis now is a critical time to invest in jobs that deliver value for the public dollars invested and can achieve outcomes that meet the requirements of life in the 21st century.

In the Hunter an industry policy needs to deal with the problem that there are structural limits on jobs growth. The dominance of coal mining in the government's planning, at a time when employment in the industry has plateaued, remains a stumbling block to innovative use of public money for new industries.

A more responsible plan for the Hunter's future would promote growth in public education and renewable energy industries. This is the way to deliver sustainable jobs well into the future. And if Labor politicians could take off their pro-coal blinkers they would realise that this path is also a vote winner.

This dual approach can already be seen at Newcastle University. Under Professor Bill Mitchell the Centre for Full Employment and Equity has identified 73,800 jobs that could be created across NSW if the state changed to 100 per cent renewable energy.

But right now the push is on for a Hunter defence hub specialising in submarine construction. As this cannot occur without government intervention, the question the people of the Hunter have a right to ask is whether this is the preferable way forward.

Unfortunately, the chances of the current government re-evaluating the worth of a defence hub and shifting over to education and renewable energy industries are nil. Labor strategists desperate to stop the bleeding of votes in the Hunter will be working for a submarine-led recovery for their sitting MPs.

It would be a safe bet to expect that in the countdown to the state election Ms McKay will regularly line up with Premier Kenneally, hard hats and fluoro jackets at the ready, to tout the defence hub plan as a good news story for the fading Labor star.