Until very recently, there has been a sense of unreality about this global financial crisis. The media has been flinging doom and gloom at us like a baby in a high chair with a big plate of bad news, but I can’t say I’ve noticed much belt-tightening out in the real world. Restaurants are still packed, shoppers were as fevered as ever in their attacks on the post-Christmas bargains at the department stores, and the coffee-sippers and lunchers at the local cafe strips are undiminished.
A majority of folk have suffered excruciating drawdowns on their super funds, sure, and those with direct exposure to the sharemarket have been hammered, but in many cases the losses are on paper only. Markets crash and markets boom, and in between – which is most of the time – they fluctuate to and fro rather tediously. That hasn’t changed. The cycles repeat, and in time the paper losses of today will be made up with the resumption of the upward bias that is historically a given. The same applies to the real estate market. In the meantime, though, this current crisis will leave its mark just as the boom has.
BHP’s abrupt announcement last week that they would be closing their mining operations at Ravensthorpe and Hopetoun due to depressed nickel prices and falling demand for stainless steel was a nasty dose of reality – quite shocking, actually, since it effectively sounds the death knell for both towns as thriving coastal hubs. It is likely, though, that this is but the first of many such mine abandonments. Calls for the State Government to bail out mine workers and others who have invested in property in Ravensthorpe and Hopetoun, the value of which has plummeted overnight with BHP’s decision to up stakes, are misplaced. What about others whose property and other assets have devalued due to the global crisis and the flow-on effects of a smacked-up resources sector – should the government be compensating them, too?
As with any investment, when you buy real estate you accept risk in the pursuit of reward. The savvy (or lucky) investors who bought property at Ravensthorpe and Hopetoun prior to the boom reaped thousands of per cent on their initial capital outlay. Others who bought in later still did bloody well. Can’t say I noticed any offers to share these rewards with the larger community. Why, then, should the taxpayer shoulder the burden of an investment gone bad?
If you bought in late and are now stuck with a mortgage worth more than your house, that’s a major bummer, but the timing is part of the risk in any investment. You have a right to expect sympathy and support from the government and community, but not financial compensation.
BHP’s responsibilites are another issue altogether. If, as is being claimed, the company sought to nurture a residential workforce and encouraged investment in the towns on the basis that the mines had a guaranteed life span of 25 years, they would appear to have an moral responsibility, at least, to compensate those whose vision of a secure future in the region has been dashed on the rocks of their misleading advice. Slater and Gordon have wasted no time in positioning themselves for a share of the action, should BHP’s ethical reflexes require a little legal prodding.
As for the way The Big Australian told their workers of the decision – typical Aussie management. In other words, appalling. According to this news report from The Australian, the workers were called to a “safety meeting”, where they were told they were no longer required. Another online report indicated that they were instructed to leave the premises immediately – they weren’t even permitted to return to their workplace to retrieve their personal belongings, which BHP undertook to “send on”.
Why do these fucking bastards in management always do things this way? Why not show a little respect, treat people with a bit of dignity, be straight? Fair fuckin’ dinkum (since it’s coming up to Australia Day), in all my working life I have NEVER experienced good management in this country. They have no idea what it takes to get the best out of their subordinates. Retarded EQs, these bozos.