Imagine this horror: your child has just reached dating age, and their first crush is on the son or daughter of someone you went out with in your youth, a relationship that ended disastrously.
It was once a common story in Perth, Western Australia, but less so now as the state continues to grow faster than any other in Australia, in both population and its economy.
That comfortable big-country-town feeling is fading, as fast as the red dust of the North West is being shifted to get at the valuable minerals beneath it.
The mining boom of the last decade has done many things for the state and for Australia, most notably being the economic factor that stopped Australia dipping into negative economic growth during the Global Financial Crisis.
China is the biggest recipient of Australia’s exports. About half those exports are iron ore from Western Australia. Ten years ago, it was only 16%.
Back in the 1970s, about 1 million tonnes of iron ore was being shovelled from the ground each week. Now it’s about 1.5 million tonnes a day.
Visitors from the east say the same things.
“Great place, beautiful beaches, bloody expensive. You won’t believe what I paid for bacon and eggs. And the coffee at $5 is rubbish.”
The state is the place to be. It has the jobs and the opportunity. One in three people living in Western Australia was born overseas, the highest proportion of any area in Australia.
And if you take into account those moving to WA from other parts of Australia, it’s more like every second person was born somewhere else. In some lifts taking mining executives to their offices in the new corporate concrete and steel palaces on Perth’s main street, St Georges Terrace, local accents are hard to find.
At the last census in 2011, WA had 2.2 million people. Since then about 1,500 new people have been arriving each week, making WA the fastest growing state. A year ago it reached 2.5 million. The Committee of Perth, a local business think tank, believes the population could hit nearly 4 million by 2050.
Much has been written about CUBS (Cashed Up Bogans) of Western Australia, awash with cash from mining jobs, buying jet skis and other boy’s toys. However, buying boats, four-wheel drives and jet skis isn’t new to Western Australia. They’ve always done that and it’s linked with the desire to make best use of the natural resources: the bush and the beach, the outdoors, the fishing, swimming, diving, surfing.
What Perth is seeing is a gentle shake up of who’s grabbing the money, who’s getting wealthy. The latest research shows humble tradies (the electricians and welders and builders), those who haven’t inherited wealth, benefiting. They’re growing their wealth fast. And, of course, those who had wealth, are doing as well as they usually do. Some on more fixed incomes aren’t doing that well because, as wages have risen, prices have gone up. Perth is now officially the most expensive state capital to rent a house.
These stories show how the mining boom has changed the state and its people.
Lost And Found
Marlon Johns came to the search late. It was hot, past lunchtime and the afternoon was ticking by. The woman had been missing since the early hours of the morning.
Most of the bush had already been gone over and a helicopter hadn’t found anything.
Police had asked the Main Roads Department crew Marlon was working with to put out plastic witches’ hats to slow traffic, and warn motorists that people may be on and off the road as they worked the search area.
Marlon had put up his hand, asked his boss for permission to join the search, and the police were happy to have him.
He weighed up the situation. Only a few more hours of day left. It would be near impossible in the dark and water was the problem. It always was. Without it, the woman was in real trouble.
He thought his best bet was to run a zigzag course along the perimeter of the search area, hoping to cut across the path of the woman, pick up signs where she may have disturbed the natural setting. A broken piece of twig, a rock moved exposing fresh dirt, a footprint in the sand.
This tactic assumed the area already searched had been covered thoroughly but he had to trust the job had been done right. He didn’t have the time to cover the same ground. On top of that the family of the missing woman had already been over the area, churning up ground in quad bikes, before the official search had started.
Marlon walked quickly, concentrating, looking for signs, seeing none and moving on.
Most people see what’s in front of them but the image, the scene, the picture, is edited by the brain. What becomes common is registered as more of the same, and skipped over, discarded.
Few see like Marlon. He takes in everything. He sees the tiny and the large, takes in the smell and taste. Each bit is a component in a story of place, of the landscape.
He finds it hard to explain. He describes it as a feeling, a common sense way of looking at the world. Others don’t have that sense. “They don’t think like I would,” he says.
His dad and pop, his grandfather, took him hunting as a boy. They showed him how to look for signs on the ground, the grass and branches, as they hunted for kangaroos.
“If we’d shoot a kangaroo we’d track it down,” Marlon says. “It would be bleeding and we don’t waste food. There’d be footprints and little bit of blood every now and then. You can mostly tell which one’s wounded and that sort of stuff. It’s not easy. I make it look easy, but.”
He used these skills as he worked the bush looking for the woman. The first sign he found was almost two hours later. It was a box of tablets, medicine, and Marlon could tell it hadn’t been there that long.
Marlon picked it up and read the woman’s name. They were close. Marlon called out to the policeman to get assistance: the woman was close and they might need some help.
Marlon could tell from her partial footprints that she wasn’t in good shape. She was unsteady on her feet.
He found her a few minutes later. Too late, Marlon thought, certain she was dead.
“But she was still alive,” Marlon recalls. “I actually thought she was dead because she wasn’t moving.”
“She’d crawled between two logs. I don’t think anyone would have seen her. She was pretty well hidden.”
The local police said the woman was found in an area not normally visited by people and that she had so successfully hidden herself it was highly unlikely she would not have been found if Marlon hadn’t been there.
Senior Constable Fritz Gaugg says the woman had been missing since the early hours of the morning and she’d been gone quite some time before Marlon offered up his services.
“Off he went,” Fritz said. “Within two hours of him coming on board, he’d located her and she was taken to hospital. It was brilliant. He did a fantastic job for us and saved a lot of resources.”
“He didn’t have a lot to work with,” Fritz said. “Once he found that slightest trace he tracked her along.
“I’ve never had a tracker. I’ve heard of them, guys around Kalgoorlie, but I’ve never seen one in action until Marlon came along.”
Marlon has eight children, four boys and four girls. He grew up in Katanning in the Great Southern of Western Australia. He left school at 14 to go roustabouting, the term for a dogsbody for a shearing team. Then he became a shearer.
As a boy, he represented Australia in Darts. He won the national championship when he was 14 and went to London to represent Australia when he was 16.
Marlon went back to work with the Main Roads but what he really wanted was a job in the mining industry, a Fly-In-Fly-Out (FIFO) gig. That’s where the big money is, in the red dirt of the north. He could easily double his pay.
He’d worked in the North West before but a motorbike accident had left him unfit to work for too long. Since then he’d been calling the mining companies, getting on waiting lists, generally hassling them as much as he could without turning them off him.
Building the wealth
This mining boom has built quickly over the last ten years and the benefits have spread, creating jobs and wealth. Many have done well. Others not so.
The state’s Gross Domestic Product growth at almost 5% a year, two-thirds higher than the national rate.
The confidence level fell for a while when the investment phase of the boom finished. But the state has hit the third stage of the boom where increasing mountains of ore, and cash, are coming from established mines with increased capacity.
Looking at the state as a whole, its households are among the wealthiest in the country. Perth ranks third across the nation for mean household net worth, averaging more than $800,000 per household, according to the the Bankwest Curtin Economics Centre.
Household net wealth has increased by more than 70% in real terms since 2003, adding at least $268 billion to the State’s total wealth stock.
This chart tells the story of WA compared to the rest of Australia:
Per capita gross state income for WA is currently averaging $98,000, about 50% more than it was ten years ago.
The average gross household income for WA families is $2,117 a week. Compare this to South Australia which has $530 less in average household income each week.
Almost one in five (18%) of high income households in WA are headed by those in trade jobs, compared with only one in ten (9%) in the rest of Australia.
But the poor are still poor. The richest 10% have about 4.5 times the income of the poorest 10%.
The Red Dirt
You can never quite get rid of the red dirt. Clean the car inside and out after a trip north. Vacuum, wash and buff. But always, such as when you open the petrol cap, the red dirt remains. Again, dust and wash the children’s toys and the same thing. A dollop of red dust will drop to the floor.
Deanne Hislop lived at Karratha in the North West for three and a half years. When husband Paul’s contract was up, they decided to move to Perth where Deanne grew up.
That’s when they kept finding the red dust. “It does stain and it gets into absolutely everything,” Deanne says.
They had the choice between moving to Queensland or living in Perth with Paul working FIFO, 15 days on in Karratha, six off, as a commercial manager. With school coming for their oldest, they chose Perth where Deanne’s parents live.
Deanne grew up in Wanaroo, which in the 1980s was pretty much the northern edge of Perth. After school she tried university for a while, then headed to Melbourne and on to London in her early 20s where she ran organic food stores.
“My sister, when I was leaving for London, was buying her first house,” she says. “I can still remember the adverts for first home buyers which were saying if you earned $500 a week you could own your own house.
In London, everything was expensive. “The whole time I was living in London I would think it would be nice to go home to be able to afford things, to be able to live, have a better quality of life.”
But when she got back, six years ago aged 28 with a child on the way, everything had changed. It was a shock.
“The cost of housing and the cost of food had gone up hugely,” she says. “The prices in Perth were twice as high without the quality.”
She remembers staying with her parents when she came back. She grabbed $10 and went out to grab some bacon and a block of cheese. She didn’t have enough money.
Paul, her husband, and a Londoner, was gobsmacked.
Since they’ve become a FIFO family, they’ve bought a two hectare block on the very outer edge of Perth. It has three horses and is five minutes to the beach.
Deanne started a website, My FIFO Family, which grew from helping her son who was having trouble understanding that his Dad had to leave for work.
This led to the development of a calendar with stickers which children can use to work out when Dad is going away and when he will be back and what they can do. Then there’s the book, Boomerang Dad.
Deanne sells them to companies which tend to add their logo and order in the thousands.
“Children, once they find out what’s going on, do very well,” she says. “They adapt. A lot of it is trying to find your personal balance for yourself.
“If you’re the person who wants to work, you’ve got to be working for yourself or part-time. If you’re happy being a stay at home mum, that’s fantastic.”
Deanne wants to work, which is why she runs My FIFO Family, and she also wants to stay at home to look after the kids. She laughs. “So I want it all.”
Deanne and Paul think they are incredibly lucky. “The mining boom has allowed a huge amount of opportunity for people. The difference between us having a life in London and us having a life here: the commute in London would be huge, the pay here is four times higher which gives me the freedom to live further out and choose whether I want to work or not.”
She also doesn’t have to live with her children in a busy city. If you want your kids to grow up in a rural area you’re not going to find the same work that pays the same.
“We wouldn’t have been able to have the same lifestyle anywhere else,” she says.
“We absolutely love where we live and we’re pretty much living the dream.
“My husband loves his work. I love what I do. I love the freedom and the fact that I’m giving back to the community.
“Hubbie comes home and he builds fences, plays horses and takes the kids to school. It’s pretty good.”
She believes that if you have a good relationship, FIFO is going to work.
“I am very big on building resilience in children and I think FIFO is a fantastic way. My husband and I have a strong ethic that if you want to see your children succeed then they have to see you doing it.”
The First Home Buyer Boom
One indicator on how deeply wealth has penetrated into society is the state of the first home buyer market, where affordability and confidence are critical elements.
The first home buyer has been absent in the eastern states for some time but in WA there’s something of a boom. And this has happened despite a three-fold increase in the cost of the average first home over 14 years.
In 2000, there were 1,430 first home buyer grant applications across the state for the month of July. That was when the entry for the median purchase price for established homes was $122,000.
Over the last year, monthly first home owners grant applications have been between 1,600 and 1,700. The Office of State Revenue reports the median purchase price for first home buyers is $438,000.
The Real Estate Institute of WA says: “Of course the median is only the middle price which means that half of all first home buyers are purchasing under $438,000 and there is plenty of stock under $400,000, including house and land packages.”
The percentage of first home buyers as a proportion of the overall housing market has been above average for some time and last year was at times almost 30 per cent of the whole market.
Having A Job Helps
Peter Dyball, originally from the western suburbs of Sydney, believes Perth is a place where it’s OK to “have a crack”.
Peter, the founder of the The Pit Crew, a small consultancy which services the mining and oil and gas sectors, says there’s a lot of entrepreneurship in WA.
“Some of this may be a product of the remoteness, but also with the level of ‘just get on with it’ attitude that seems to be more prevalent here. And even if things don’t work out so great the first time, it’s OK to have a crack again.”
He came to WA in 1996 working at Argyle Diamonds for the company which had the maintenance contract. He was commuting from Albury in NSW and around 1998 he was asked to move here permanently. He’d already met the woman who was later to become his wife, so that suited him well.
“I think the first thing I did when I came to Perth was to buy a motor bike,” he says. “The roads around Perth were just fabulous so I went out and bought a nice big bike.”
Now he has a scooter, a little Vespa, to run around on.
“That expansion of the city is locked in by the hills so the expansion is north-south and I think the next thing that Perth folks will have to get to grips with is increasing density, more urban, high-density living. CBD type living. It’s starting to happen but there’s a lot resistance to overcome.”
Peter lives at the beachside suburb of Swanbourne and his office is at West Leederville. “I can go to tennis and the beach on my way home. On a bad day it takes me 11 minutes and on a good day 7.”
He’s lucky in where he lives and works. Overall, he believes Perth still is a great place to live, a great lifestyle.
“Having a job here helps. I was without a job once for six months many years ago. My wife married an unemployed bum. Six weeks before we got married I was made redundant.”
“I was doing a construction and project management until about 2000. I was thinking of changing and got made redundant anyway.
“I decided to get into business development, contacting companies about tenders coming up, doing company presentations, preparing for negotiations.”
While he was doing that he was doing an MBA and Curtin University. The good thing about that was he could use his assignments for work.
“If there’s something at work which is appropriate you can turn it into a major assignment. So you try to convince the group at university that they should do the assignment about your work. So the companies I worked for got some very good and cheap analysis, data and consulting.”
He did a lot of analysis of the iron ore sector, the oil and gas business, and the general economy, where it was heading. That’s when he started Pit Crew.
The market was primed for it. If you were going to do something on your own, 2004 was the time to be getting started.
“When I kicked off pit crew, I was more focused on the business development side of things, marketing strategy and bid strategy, tender management and company business development systems and processes (which sometimes can be a bit loose),” he said. “But not long into that I was also doing some analysis and facilitation work for Rio and BHP. It became pretty obvious that there were a lot of questions about the skills and the potential shortage of skills that was peering over the horizon at us.
“Back then it was boiler makers and electricians and we were being told they were hard to get. The expectation then is that rates will go up which would mean changes in budget. And they were asking: what’s going on, is that really happening?
“I did a bit of research and looked at the available data and it was pretty inadequate, very general and some of it a bit dated.
“I used my project management background to develop a system that looked at all the projects and more or less added up the demand for all the different skills that they would need. And I turned that into a business for the next nine years.
“I’ve developed and evolved the modelling and the forecasting. As well as looking at demand we look at availability. We started in WA and we now look at all the states.”
He’s now in Canada to launch the business there. “My modelling and what we do is perfectly transferable,” he says. “Canada is very similar to Australia. So we charging over there to see if we can make a difference.”
When he first came to WA working for a small company building power stations he was disarmed by how tight the network was.
“I’d be trying to get something done and one of the directors would say: ‘Hang on, I’ll make a quick phone call’ and then he’d say ‘yes, you can meet him tomorrow’ I’d been trying to meet with that guy for three weeks.”
In mining, oil, and gas, people know everybody. One of the big events of the year is the Chamber of Commerce and Industry construction dinner. “I think I’ve been to the last ten and it’s like a roll call. There’s 1,000 people at the dinner and you will probably know 500 to 600 of them. And if you don’t know them personally you will know of them. “
A lot of his business is based on relationships and that’s one of the things which appeals to Peter. It’s not who you know but being able to connect to the right people through introduction and relationships.
Reputation is everything.
“They talk about that relationship in Perth but one of the things I’m concerned about is, that is becoming Australia. People are so mobile. We do a lot of work in Queensland now. So the roll call can now be Australia wide and not just Perth.
“That whole everybody knows everybody thing, the pond is getting bigger. We all know we’ve got to exist in that pond.”
And he sees a lot of young men grabbing the opportunity to make good money.
And that brings the clichéd bogan rating. Earning the big money, they buy the big toys: jet skis, boats, four wheel drive vehicles.
Perth has always been one of those places for people who have some extra cash. It has the space, the bush and the ocean. Why not have toys?
The thing is, the boom has created a lot more people with that extra income.
“You get a bit older and you have different toys,” he says. “I have a race car. That’s my toy. If I didn’t have that I’d have a boat or a sporty car.
“But it’s interesting to see blokes who don’t have discipline. The mistake that some make is thinking that this is going to go on forever.
“At the moment we’re seeing an easing off on the project side of things. And while we’re seeing growth in the operations side, it’s going to take a while to even out.
“I’ve seen reports of a young guy on astronomical money for basically an unskilled job who just had the time of his life for four or five years.
“But then things have eased off, he’s got all these commitments and he couldn’t service his debts. It’s a shame, because it could have been an opportunity to set himself up for life, and have a little bit of fun in between.”
The Art Of Giving – Or Not
One measure of a success of a society is how it looks after its less fortunate.
Overall, Western Australians have been giving more to charities than they ever have. But it’s the same people giving more. There hasn’t been, when looking at Australian Tax Office numbers of those claiming a deduction for donations, a rise in the number of people who give.
An analysis by JB Were’s Philanthropic Services shows WA has gone from a 7.8% to 8.5% share of Australia’s total tax deductible donation.
This strong relative and absolute gain in dollars donated was mainly because of the rise in average dollars donated, from $142 to $415 per donor.
Compared to the rest of Australia, Western Australians haven’t been rushing to give to charity. While the national average participation rate moved from 32.5% to 37.9%, WA’s only moved from 29.5% to 33.1%. This improvement was the second lowest of the states and territories (SA only gained 4%) and below the national average gain of 17%.
However, another measure of giving is the annual Telethon, a marathon television event highly popular in Western Australia. People are more likely to make a deduction and forget or not bother with claiming a tax deduction for a charity donation.
Telethon has seen a staggering increase in money raised. So while WA doesn’t stack up well against other states on a tax deductible donations, the money raised by Telethon indicates there’s a broad section of the community which gives generously.
Keeping The Essence Of The City
Another import from Sydney is Marion Fulker. She came to Western Australia in 1986 on a transfer with a multinational information technology company.
One of the great attractions of Perth then was that housing was more affordable. Marion wouldn’t have been able to buy in Sydney or taking time off to have children. “In Sydney I had no choice but to work.”
And in Perth she’s forged a successful career as well as a home and family. She’s the CEO of the Committee For Perth.
“We’re just starting to get big city problems,” she says.
Perth was a reasonably egalitarian city, where many could afford a reasonable standard of living, but less so now.
The Committee for Perth has commissioned numerous research papers and reports, seeking to define the city and discover paths to the future.
“As no-one else is writing the story of Perth we thought we would write it ourselves.”
While Perth property isn’t as affordable as it was then, the average price is around $535,000, there still is that dream, or culture, of building your own home on a virgin block of land. The old house and land package.
Marion says Perth is still a very family-friendly city and it’s great if you like an outdoor lifestyle.
However, some are doing it tougher than others. As mentioned, these are typically those on more fixed incomes: professionals, teachers, public servants, police officers, nurses.
The cheapest land and housing is on the fringe of the city, which now stretches 160 linear kilometres, an astonishing sprawl for a city of less than 2 million people.
While the house and land packages, put together by one of the most efficient land and home building industries in the world, are reasonable priced the commute to the city is a drag.
“The factor of the cost of transport is a fairly new one for Perth. It used to be 20 minutes to anywhere but not now. There are 110,000 people trying to get into work in the city each morning.”
On the city fringe, there are 2.5 cars per household. Close in it’s more like 1.5.
The main inflow of people to Perth has been from Britain and this has traditionally been an influence on its culture.
“I am married to a Pom and he came here because he thought the quality of life would be better,” she says.
“I reckon I’ve got the best job and, because I’m not from here, I can be a critical friend.
“How does Perth grow up to be like Perth? We don’t want to be just another big city. Perth has a natural beauty, a quaintness, a real friendliness about it.
“It’s so far to Perth. We hear that a lot. We know that. Technology helps, such as Skype, but some things have to be done face-to-face.
“My own family on the East Coast doesn’t understand.”
On the East Coast, the news about Perth and the riches being dug from the ground, the money flowing, sits uneasily. They smile and convince themselves it will be another boom which will turn into bust. Then the East Coast will be back on top again, where the action really is, and Perth will be back in its place.
Marion shakes her head: “We don’t think so.”
People started losing jobs about 12 months ago as the construction phase of the mining boom came to a close. But there’s now increasing work in the energy sector which will continue for many years, Marion says.
“We’ve been through a very economically fortuitous time in Western Australia. What we have in terms of natural resources will be there for a long time.”
Living Costs, The Talk Of The Town
There is no doubt that WA, and Perth in particular, is wealthy. The mining boom has created jobs which sloshes cash around the local economy and creates more jobs.
But not all have benefited. Those with relatively fixed incomes, such as public servants, teachers, police officers and nurses, have mostly seen increasing food prices and big jumps in the cost of rent.
The cost of living in Perth has been running ahead of the rest of Australia. For example, Perth is officially a more expensive place to rent a house than Sydney:
The cost of living overall is running ahead of the rest of Australia. Perth is no longer a place to live cheaply compared to the bigger cities such as Sydney or Melbourne.
The Super-Sprawled City
For those born there Perth was a place to return to after spending a few years interstate of overseas, adventuring and gaining professional experience. And coming home was a time think about a family.
David Whish-Wilson came back from Japan about 20 years ago. He bought an old shack. “No-one wanted it because it was asbestos. Then you could still rent an old banger of a house somewhere reasonably close to the beach or the river and the roads were reasonably empty and you could get around okay,” he says.
“Now the water cooler conversations of the last couple of years is not about real estate it’s about traffic; the problems you associate with any rapidly growing city, clogged roads and oversubscribed public transport, all the usual growing pains you associate with a big city.”
“Our mortgage is low and we already struggle,” David says. “My wife works as a high school teacher but we still live pay packet to pay packet. If we had a big mortgage on top of that we would be seriously struggling.” They have three children ranging from 5 to 14 years.
“The rental market is very tight but it’s no different in Sydney. Life is reasonably tough for those who aren’t on the mining dollar or who don’t have a solid job. The prices of things here are quite a bit more than they are in Melbourne, just for basic foodstuffs.”
When David grew up in Perth, a lot of people left, as he did for about ten years. But he also knows many who never came back.
“They’d come back and think: there’s nothing for me here. Of lot of people in the early twenties are going away to get experience but they’re coming back as well.
“You can’t have a vibrant city if many of your curious-minded young people are leaving and never coming back.
“The fact that they are coming back is a really good sign. And a lot of that would be tied up with the mining boom, the job opportunities.”
David says there’s a lot to come back to. The natural environment is still in good nick, although there’s a lot of devastation in the banksia woodlands in the Perth Hills.
“Most people travel down to the river and the beach,” he says. “It’s still that type of city where you can have your cake and eat it too. A pretty good natural environment for those of us who enjoy going out on the river or body surfing or fishing or whatever.
“The usual conversation about Perth is that it’s a beautiful place but pretty dull. What most people hope is that the later is slowly starting to change without affecting too much of the former.”
It has changed in obvious ways. The population has increased and 70% of the growth is in the suburbs, on the edges of the city rather than suburban infill or high rise.
Perth is already one of the most sprawled cities on the planet. It’s the same size geographically as Los Angeles and Tokyo and four times to size of greater London but with a fraction of the population.
In not too long Perth is going to be a 170 kilometres long city on its north to south axis.
David calls it a super-sprawled city.
There’s a kind of paradox in Perth. David: “While you have low unemployment, you have the highest rates of homelessness which is incredible. And one of the highest prison populations. There is definitely disadvantage among the affluence. But it’s always been that kind of city of course.”
And it’s a young city. “Perth has the highest proportion of 25 to 29 year olds of any city in Australia by a factor of about 200 per cent and most of those were choosing to live in the inner city. Which is really good I think because it’s going to revitalise the inner city.”
In a way the current boom is a replay of past booms or, as some say, it’s been a long boom with a few dips along the way.
“Perth’s history is tied intimately to the various mining booms,” David says. “It was a small town of 48,000 in 1892 when they first started out in Kalgoorlie and Coolgardie when 750,000 people suddenly passed through it and the population grew 700 per cent in the next 15 years.”
Perth went from a small town to a small city. There was a shake-up in ownership, the establishment. Those on top were challenged.
And it’s happening again. In a way it’s been happening since the 1960s when WA got the federal government to remove the embargo on iron ore exports to Japan. Then came the nickel boom.
But the last decade has been bigger than anything before.
The Business Lounge With A Police Presence
The first impression many people get of any city is its airport. Passenger numbers in and out of Perth’s have grown more than two-fold in the last decade. For a while, check-in and security queues were daunting.
Signs of the boom are everywhere; high visibility jackets of mining workers mingle with the t-shirts of tourists and the business shirts of executives.
The gateway to Perth always had its own style, more t-shirt and shorts than the smart casual of Sydney or the city cool of Melbourne.
The construction worker gear adds a boom town dimension to the sloppily dressed airport. It says: We’re too busy making money to worry about what we’re wearing.
In the Qantas Club police in pairs do a walk through. It’s tempting to overdo the free bar when you’ve just come off a couple of weeks working in a dry mine.
Getting a taxi to the city can be a challenge, and expensive, but the car hire companies appear to have stocked up with vehicles. It used to be that over summer, if you didn’t book months before, you had no chance of hiring a car.
However, it’s late at night, after the last flight from the eastern states has landed, that Perth airport really gets strange.
The economics of FIFO kick in when travelling longer distances. If you add up the travelling time of, for example, someone living in Melbourne but working in a Pilbara mine site the return per hour starts falling dramatically.
And paying for a night in a hotel in Perth would reduce earnings by several hundreds dollars when adding up hotel, taxi and breakfast charges.
It’s easier and more cost-effective to bed down on the airport floor, wake up in time for the early flight north, than to find a hotel room.
That Expensive Coffee And What To Do About It
Unlike many of her generation, Perth’s Lord Mayor Lisa Scaffidi, now aged 53, saw no need to go interstate. She was having too much fun in Perth.
She left MLC, an all-girls private school in the affluent Perth Western suburbs, went to two universities but didn’t finish either. “I was having too much fun working in the Merlin Hotel, the precursor to what is now the Hyatt. That was during the Americas Cup yacht race, an exciting time.”
She started in guest relations then corporate sales, convention and group management, and finished as director of sales.
“That’s where I created a lot of my contacts and network today,” she says. “Many of them are CEOs and the like. It was a really good time working in the early 1980s in that industry.”
Today she heads an eight square kilometre block of the central city including the CBD where the mining executives run and plan their next projects.
She’s popular, into her second term which she probably won when she was asked the question: if you had a million dollars to spend for Perth what would you do?
She said: Free WiFi.
“And it just took off,” she say. “The opponent at the time said more public toilets in Forrest Place which was delivered anyway.
“The WiFi thing was grabbed and so embraced by the public that we delivered it. It does make visitors linger longer. But as someone who travels … I think it’s a must provide for businesses to encourage people to hang around.
“You just pick it up on your phone. That means you’re not using your roaming charges as a traveller. It’s a big saving.”
The City of Perth has a 12 person communication team. Social media is a priority.
The Perth CBD of two decades ago was lifeless. Today Lisa lives in East Perth which has been successfully redeveloped as an inner city suburb. Lisa can look out of her window at night and see people out and visiting restaurants.
She says: “People are working long hours and they want to have little restaurants that they can dine in because they’re not going to be cooking every night of the week. I’ve been a strong champion of small bars of which we’ve seen a lot open in the last couple of years and now we have more supermarkets. More vitality in a city that starting to get a big critical mass which gives the viability to businesses.”
She listens to the accusations of those who think Perth has become expensive. And she agrees with them.
“I have to say to you that I think it is true,” she says. “The cost of eating out, food and beverage, in Perth is expensive. And I can only put it down to the high cost of labour. It worries me and that’s why I talk about service establishments making sure that people get value for money. We used to say how expensive London was and how expensive Tokyo was, well now it’s how expensive Australia is. Now London seems kind of OK. That might change in another decade or so as things often do.”
She has advice for people: “If the coffee’s not good at $4.50 a cup well tell the Barista and don’t accept it.”
Perth has much in new and sophisticated venues, the fantastic climate, and infrastructure. However, Lisa points to what she calls the “soft infrastructure” – the city’s people.
She says: “Good service and friendliness will be the difference between making our city a good city and a great city.”
The Gold Street Paving Is Fading
Sue Pember knows exactly who the new arrivals are in Perth. She gets to meet a lot of them. Four years ago she started Aussie Orientation Services, to help staff from international and interstate companies settle in Perth.
The accent she’s hearing at the moment is a Texan drawl. “Things have definitely changed in this town in the last five or six years. One of the biggest clients we’re looking after is Bechtel as well as other oil and gas companies. We have a huge influx of people coming in from Houston, Texas.”
A year ago, most of her work was coming from companies contracting for the big iron players such as BHP and Rio Tinto. But with the peak reached in construction of bigger mines and bigger facilities the nature of people arriving in Perth has changed.
Currently there are Japanese and French along with the Texans. They’re there for the oil and gas, the building of projects such as Wheatstone for Chevron.
“The calibre of the people we are bringing in is very different,” Sue Pember says. “We used to bring in big teams of people such as mechanical fitters and boiler makers. But now we have engineering managers, the more senior managers.”
The end of the construction phase of the boom has seen a lot of people lose their jobs over the last six months but Sue Pember says many have been rehired elsewhere.
“Anyone who has an open position will employ local first because otherwise it’s so expensive to bring in overseas labour,” she says.
“I also think there’s been a shift in income and the streets aren’t as paved as much in gold as they were.”
Sue Pember grew up in Perth and never felt the need to leave. Starting her own business was the best thing she’s done. The business has grown to 25 staff around Australia in four years. She’s also got two-year-old boy and six-year-old girl.
“It’s been a big four years,” she says.
Business was very quiet when the election was called in January 2013 but a lot more people know about us now because the recognition came in.
She trained in stage management used to work at ABC television until she was made redundant when they were getting rid of the floor managers. She spent three years in real estate then a corporate job as business development manager at the chamber of commerce and industry.
“Floor managing is such good training for babysitting people,” she says. “Everything I’ve done is really about customer service and looking after people.
“We look after everyone from a chemical fitter to the new CEO for an oil and gas company.
“If it’s a group of Filipinos who want to save money we put them into a house near the airport for $300 a week as they work on shifts. They are making the most of their money. We’ll take them to good second hand goods stores to buy most of their furniture. So they’re donating to charity while not spending as much. We’ll fit out their houses and do it as economically as possible for them.
“Then we’ll have a senior manager come in with a $2,500 per week budget plus schooling allowances.”
These she encourages to look at an alternative to renting a high level executive place in a very upmarket area such as in Perth’s western suburbs.
“We’ll try to minimise their costs as much as we can,” she says. “Perth and Australia in general has a high cost of living.
“Instead of paying school fees right away, we’ll look at areas that have really, really good local schools.
“It all depends. Every client is different.”
Sue will find a four bedroom, two bathroom house in a suburb such as Willeton or Shelley or Rossmoyne where the schools are excellent and with 1970s-80s Ramsey Street-style houses which have been renovated and with a pool in the backyard.
To buy, if the expatriates wanted to settle in Perth later, these houses cost between $550,000 and $750,000 and they’re close to public transport so they can get in and out of the city easily.
Whereas, if they rent in an expensive area they would never be able to afford to buy later.
“The entry price to buy something in those suburbs is $1 million,” she says. “That’s setting people up into a life that’s not affordable. I try to find them reality, something they can achieve.”
It’s easy to end up paying $1,500 a week rent and spending $30,000 a year in private school fees per child. “And then you go out and buy a brand new car, you’re not going to get much change out of $400,000 a year,” Sue says.
“And then when they’re deciding to stay or not, they’re not going to say: ‘Let’s downgrade our lifestyle’. That’s losing face. They pack up and go back home.”
It’s not just about getting a rental property in the right area and getting the kids into school. Relocating is so much more than that. It’s the secrets, where to shop, what to do, where to get a really good cup of coffee, where not to get ripped off.
“I had a client from Italy who was so excited when I took them to Fremantle and they were able to find the cheese they love,” she says.
“And there are cheaper places to buy food from such as farmers markets. This is local knowledge you’re not going to find on the internet. It’s like having a friend on the ground from the start.
“A lot of people get ripped off, have a bad experience and pack up and go home. If you walk into a car yard and say you need to buy a car, they’ll know you’re desperate.”
Sue runs up to six events a month, including book clubs, coffee catch ups, ladies lunches and seminars in preparing kids for new schools.
She’s always being asked. “Do you know a good restaurant?”
No Longer Isolated
Perth is the most isolated coastal capital city in the world. This was always said with some pride, the distance a badge of honour. This was more an exercise in contrasting to the eastern states, where the big bucks, the big jobs, the big businesses, used to reside.
However, the new thinking is that Perth, when you take good look at the map, has a more central position in the scheme of things. Rather than thinking about a five-hour flight to east coast of Australia, Perth is just a few hours in the air to Asia. It’s quicker to get to Singapore, and even faster to Jakarta, than it is to fly to Sydney.
Tim Shanahan, the director of the Energy and Minerals Institute at the University of Western Australia, is a major beneficiary of the mining boom. Six years ago, his job didn’t exist.
His institute now receives millions of dollars from mining companies to further its work. That is to further the intellectual capital of the state rather than focus entirely on the big infrastructure projects.
“There has been a very significant realisation that Perth shares the same time zone as 60 per cent of the world’s population,” Shanahan says.
“Two hours to the east and two hours to the west of the city. All of the things that we produce get mostly sold into North East Asia. Look at Perth’s previous view of itself that we were the most isolated capital city in the world. Now if you look at it in a north-south framework we are actually at the centre of where the world’s emerging economies are. That’s a very significant position for Australia and Perth.”
Over the last few years the University of WA has moved into the top 100 universities in the world on the academic rankings. Shanahan argues that this is in itself a major investment. Having a world class university is part of what makes Perth attractive. “When you’re looking for investment in our state, our city, that is going to be globally material,” he says.
He also points to the philanthropy in Western Australia including the big ones reported in detail in the media such as the $65 million from mining magnate Andrew Twiggy Forrest and his wife Nicola.
The new $50 million Forrest Foundation will fund scholarships and postdoctoral fellowships across all five WA universities. Another $15 million will build Forrest Hall, a creative living space for rising research stars at UWA.
“65 million dollars is an absolute game changer,” says Shanahan.
“We’ve had significant investments from the mining and energy companies; funding professorial research projects, endowing research chairs, pumping more money into scholarships, more money the built environment of the university. This is all reflective on the comparative advantage Perth and WA has in the area of energy and minerals. Those will be lasting investments by those companies because they are now essentially moving into their operational phase, particularly iron ore.”
And a lot of people want to be part of the current boom and the future of mining. The number of students enrolling for engineering has doubled.
“The companies have invested in the university to ensure those students have the benefit of a world class faculty and that the courses we are teaching are aligned to business needs,” he says. “That’s probably gone under the radar a bit. Governments have supported that, companies have supported that and the university has supported that. You need to have all three players in alignment. Even operating in a very buoyant market, there are still very significant challenges to get everyone lined up.”
Just before Christmas 2013 the institute announced a $17 million investment by BHP into the university. BHP had previously put money into the business school and now it is putting money into the engineering faculty.
Shell has invested in a chair in offshore engineering. The world’s largest floating structure is being built in Korea and will come online in the next few years.
This is investment in capability. The focus is automation, robots and the interaction of humans to these systems. And WA will be the global leader in production in remote and hostile environments.
Education is Australia’s fourth largest export. The Colorado School of Mines, in an area where there’s a not a lot of mining going on, has a world reputation as a centre for research and education.
Shanahan says: “The challenge for the university is to maintain the momentum. This is a global competition, it’s not a cross town rivalry. These are globally significant issues the university is working on. The companies are essentially investors who can choose to invest anywhere in the world.”
The next project is a world rock art complex. “With the assistance of industry we’ve been able to attract and recruit some world class expertise in this area,” he says. “Clearly there’s a social benefit as well as a community benefit.”
He says nothing has stopped with the winding down of the construction phase of the mining boom. Mountains of ore are being shipped and the mines still need to be staffed.
And on the construction side, LNG projects are being built and iron ore still has Gina Rinehart’s Roy Hill mine being created.
“All this new capacity starts to age from the day it’s installed and you need to be thinking about the life cycle of those assets, smart maintenance and the management of those assets,” Shanahan says.
“And gas is getting deeper offshore and then you have all the issues with onshore shale gas.
“They will make their mines more efficient. Over history the cost of production of minerals has come down. Miners and energy companies have become absolutely focussed on the cost of production and competing on a global market. Most of the gains have been achieved through technological breakthroughs and the application of capabilities that universities and researchers have provided.”
The Flow of Mining Money
The state government coffers do well from mining. One in five dollars spent by the Western Australian government comes from the minerals industry. And most of that $5.8 billion annual royalty revenue comes from iron ore.
That revenue is so sensitive to the price of iron ore that every time it moves up or down by $1 that means the state has gained or lost $45 million. Then there’s the exchange rate. A high Australian dollar against the US dollar brings back fewer local dollars, a falling dollar more.
At the moment a trending lower dollar is working in the state’s favour but the falling iron price, driven by China, isn’t.
And there’s another catch. Each time the states adds another $100 million in minerals royalties, it loses $90 million in federal GST revenue.
For a $100 million increase in iron ore royalty revenue (due to increased value of production), all else being equal, Western Australia will lose an estimated $90 million of GST grants in net present value terms (the loss will occur in later years due to the time lags in the Grants Commission process).
Since Colin Barnett was a student at the University of Western Australia in the late 1960s and early ‘70s, the production of iron ore has increased ten-fold. The numbers are massive. From around 1 million tonnes a week too about 1.5 million tonnes a day now.
At that time Perth was a smaller and sleepier town. Fewer people, fewer cars. A simpler life. However, change was also rapid then when the post-war reconstruction of Japan brought on iron ore and natural gas development in the remote Pilbara region and the effect on the Perth Central CBD in the 1960s was extraordinary.
Barnett says: “This is the time we now look back on and lament the loss of a lot of old heritage buildings in the centre of the city, but at the time, there was a great energy and excitement and that marked quite a turning point in the history of the city and really marks the beginning of modern Perth.”
He remembers the country town feel of Perth, something comforting. He believes, however, that Perth has managed to retain a lot of that laid-back, relaxed friendly and welcoming atmosphere. “I think if there has been a loss of any of that, it is more than compensated for with a bit more variety in terms of the cultural influences and events in Perth.”
Barnett, now Premier of Western Australia, acknowledges the strains the city is under as it grows again under another boom.
“The fact is that Perth is evolving into a big city and some of the problems – of congestion, for example – are almost inevitable,” he told Business Insider Australia.
“There is no doubt that the growing population – and it is growing to the tune of around 1,500 people a week – is putting more pressure on the transport system. The State Government has placed a great deal of emphasis on improving the capacity of Perth’s roads with several projects around the metropolitan area. We have continued to invest in the public transport network as well and will soon build a new railway line to the airport and into Perth’s Eastern suburbs.”
The population increase has also put pressure on other infrastructure such as schools and hospitals. In health, WA has a $7 billion building program. Other big projects include Perth City Link to sink the railway line in the centre of the city, the Elizabeth Quay project to re-open the city to the river and the Stadium, a world-class event venue.
“I know that some people, particularly some of the baby boomers and some older people – people like me, if you like – and especially some of those in the more established, older suburbs of Perth – have questioned why we would spend money on projects like this, which change some aspects of the city.
“But these projects are not designed for people like me who have enjoyed Perth as it has always been, these are projects for the future, for young people and people new to Perth who demand a better range of entertainment options, and who want to see some of WA’s good fortune invested to create a more vibrant city.”
The history of WA is based on migration. Since the gold rush of the 1890s, which in many ways was the making of WA, the Western Australian identity has been formed with many influences. Post WWII WA took in many European migrants who had a big influence on the community, the 1970s saw a big influx of people from Asia.
Barnett: “These days we have people from all over the world here and for the most part I think they all very readily accept that they are now West Australian and do not seem to have had too many problems, no matter where they might have been born, embracing the WA way of life. I think we are all pretty good at making each other feel welcome here too. To some extent here we are all united by a common purpose and I really don’t think there is an issue with establishing a West Australian identity. Maybe it’s something to do with the landscape or the weather that subdues everyone eventually.”
Many people have not felt the benefits as much as others. “We have a wide range of assistance programs in place to help disadvantaged people, carers and seniors with many household expenses. We have also invested more than $600 million in the not-for-profit sector to provide services to many of the most disadvantaged in our community, such as people with disabilities. At the end of the day we recognise that they provide the services better than government ever could.”
All benefit, Barnett says, from the enormous investment into infrastructure projects such as world-class hospitals, schools, roads and other services provide stimulation to the local economy. “We have the best unemployment rate of any state in Australia. Western Australia also has the highest paid nurses, police officers and teachers in the country.”
The changing working environment in WA means many people have much more flexible working arrangements and many work fly in fly out these days. “I know that that can be a challenge, but I also know that many families are happy to have the time to spend together enjoying what Perth – and WA – has to offer when they are not at work.”
He says there’s no doubt that as Perth grows to accommodate more people, there will have to be a move towards greater housing density and in many cases smaller homes.
“But that is fine, not everyone wants or needs – or can afford – a big house on a big block and it is important that there is a big range of housing options for say, older people, young couples or singles. As long as there are a range of housing options available, I think you will find, with changing lifestyles, there will be a gradual move away from bigger houses and bigger yards to smaller houses, perhaps closer to the inner city.
“In spite of all its changes, Perth is still a city that is relatively easy to get around and with a climate and a physical location that offers a lifestyle that is the envy of people around the world.”
‘It Only Takes A Split Second, And Someone’s Dead’
Marlon Johns, the tracker, leaves his house in Bunbury, south of Perth, just after 5 am. At 9.30 am he’s 1,500 kms north of Perth at Rio Tinto’s Brockman 2 mine in the Pilbara between Dampier and Parabadoo.
There are two flights each week direct from Bussleton, a country town, to the mine site. Marlon does the day shift driving a Haulpak, an enormous truck, feeding a crusher with ore.
“We go straight through to site. They have their own little airstrip. I get off the plane, get dressed and go straight to work. We get on site around 9.30 and start work at ten. It takes an hour and a half on the plane. I do two weeks on, one week off. I leave home Tuesday and come back two weeks later.”
While he was working for the Main Road Department, Marlon was applying for FIFO jobs with mining companies. It’s not easy to get one. “You need qualifications. You need a license (for a truck) and you have to have some sort of experience.”
Flying straight through to the mine site is a bonus. When Marlon was working FIFO previously, before he broke his leg and had to step down, he had to first drive to Perth from Bunbury, park the car and then fly out.
“Life’s good, you know,” says Marlon. “There are hardly any bills in the house and we can afford things we never used to be able to.”
His children now have iPads. “I’ve got an ‘86 caprice, six litre, got a motorbike, got the house, caravan, four-wheel drive,” he says. “Every man has got to have his toys.”
And when he’s away, he doesn’t have to pay anything. “You have everything up there; all the food, clothing, boots. All you have to do is go up there and do your job.”
It’s a production site but not really in full swing yet. They have autonomous trucks running, skimming off the topsoil to reveal the ore underneath. Then Marlon and his fellow drivers come in to get the good stuff to feed to the ore crusher.
“They are very easy to dive, actually easier than a car but bigger. And we have lots of women on site driving.”
And the job can be dangerous. “You have to stay focused all the time. It only takes a split second and someone’s dead. It would just feel like a speed hump going over a car in one of those big dump trucks.”
Marlon stays fit. He sometimes does quick exercises on the deck of the Haulpak to unravel the kinks. At the end of the shift, he hits the gym before he has dinner.
“I’m getting $120,000 a year,” he says. “I’m a greenie (new worker) but I’ve already had experience driving the trucks. I took a week to train up. Another guy took four to five weeks. Some guys are on $150,000 to $160,000 a year, maybe more.”
Marlon doesn’t find it easy working away. He would rather be at home with the family, eating dinner together. But the mine works suits him for now.
Eventually Marlon would like to work for himself.
“I just want to pay the house of and then come home. And set up a little business, a kangaroo hunting business, so I can be home every night.
“I can feed the Aboriginal community and maybe some of the white people as well.
“It’s cheap and there’s not much fat in the Kangaroo meat, it’s pretty lean. I’d like to do it all myself, get the kangaroos and cut them up. I used to work at the Katanning abattoirs.”
“My favourite food is kangaroo.” Just a stew, like a little casserole, served with damper bread.
What he likes about life best is getting home and being with the family. And fishing, golf, hunting.
“My wife (Jayne) makes a mean marron curry,” he says “We go diving for them in the creeks and rivers. We use snares and stuff as well.”
Since he tracked the missing woman, Marlon’s phone number sits with the local police who call when he’s needed.
“There was an old guy who went missing,” Marlon says. “They found his pushbike in Bunbury. They called me up and I went down and I found in him in three minutes and they’d been at it all day in the rain.”
How does he do that? “It’s just a feeling, common sense. He was riding his pushbike and then he locked it up against the fence. He didn’t have a flat tyre or anything so he didn’t walk off. And sure enough I found him in a couple of minutes. And they were looking in the wrong direction. They just don’t have sense. They don’t think like I would.”
Marlon has passed on this knowledge to his sons, and now one of his daughters. “She comes with me hunting,” he says. “I didn’t used to take the girls but she comes with me now and she’s sort of good at it. We’re after kangaroos and rabbits. We missed out on a big pig yesterday. They’re a bit too quick.”
The writer is on Twitter: @TheLastWhale