Inside Australia’s housing shortage myth: Ryder

One of the great mysteries of real estate is the lack of strong rental growth in a land that allegedly has a chronic housing shortage crisis.

The latest rental report from Australian Property Monitors – which covers the eight capital cities – records falling rentals in some markets, zero growth in most and small increases in a few.

The only market to deliver rent rises consistent with the so-called dwelling shortages is the Darwin housing market.

Everywhere else in capital city Australia, it’s all about stagnation. This mirrors recent results with house and unit prices.

How can that be in an under-supplied market?

Here’s the answer: the shortage claims constitute the number-one furphy in Australian real estate.

Economics 101 tells us that where there’s strong demand for a product which is in short supply, prices rise. If prices are not rising, then we can conclude that demand is weak and/or that there is plenty of supply. Or that the normal laws no longer apply.

There are a few places around Australia that do have genuine shortages of dwellings. They’re not the capital cities – they’re in the regions, primarily those where life is all about the resources sector.

Gladstone has a genuine shortage and rents are increasing is significant increments. It’s become a major issue in the Queensland industrial city, particularly for households that aren’t earning the big money in the resources-related projects.

Mining towns in Queensland’s Bowen Basin like Moranbah have had rents rising so high that typical rental yields have topped 15% – a number I haven’t seen in my 30 years researching Australian real estate – prompting BHP Billiton to spit the dummy and refuse to pay the $2,000-plus weekly rents the market is demanding.

In Port Hedland and Karratha, which service the iron ore mining projects of the Pilbara region in WA, typical weekly rents are around $2,000 a week. The federal inquiry into the use of fly-in-fly-out workers has been told that it costs major mining companies $100,000 more annually to accommodate a worker in Port Hedland than it does to fly them in from Perth for regular work shifts.

That’s the outcome you get when there really is a shortage of dwellings and strong demand.

But we’re not seeing anything like that in our capital cities.

The APM Rental Report finds that in the March Quarter there was no change to house rentals in Sydney, Melbourne, Brisbane or Perth, plus a small decline in Adelaide and a 2% drop in Canberra.

Darwin and Hobart were the only cities to record increases in house rents in the quarter.

There was an even more mediocre outcome with unit rents: declines in Sydney, Canberra and Darwin, plus no change in Melbourne, Brisbane, Adelaide, Perth and Hobart.

Looking at house rents on a yearly basis, Melbourne and Adelaide both recorded small declines. Sydney, Brisbane, Canberra and Hobart each had small annual increases between 1.5% and 2.7%. Perth houses rents grew 3.9% and Darwin was the only capital city to show significant movement, with house rents up 11.8%.

There was no meaningful movement in apartment rents anywhere. Hobart’s median decreased, and there was no change in Sydney, Melbourne and Adelaide. There were minor rises, less than 3%, in Perth, Canberra and Darwin. The biggest movement for unit rents was a 4.3% rise in Brisbane.

These are not figures to set markets alight or compel investors to dive in to buy capital city property.

It all reinforces one of my recurring points: that the best places to invest are found outside the capital cities, where prices are cheaper, returns higher and capital growth prospects better. The regions include locations that really do have housing shortages.

http://www.smartcompany.com.au/property/049410-inside-australia-s-housing-shortage-myth-ryder.html

Union downplays mine lay-offs

By Jennifer Huxley

Updated April 30, 2012 10:50:54

The Construction, Mining, Forestry and Energy Union (CFMEU) says the community should not panic about a company’s move to downsize its Bowen Basin workforce in central Queensland.

Twenty contracted workers at Anglo American Coal’s Foxleigh mine have been laid off and employees at the company’s Moranbah North site, south-west of Mackay, have had their hours reduced.

CFMEU spokesman Steve Smyth says it is a common practice at the end of the financial year.

“That’s one of the issues of having labour hire employees and those who are not engaged in fixed-term, full-time employment,” he said.

“Their jobs are like seasonal workers – they can have a job now and not tomorrow and that’s one of the issues that we face in the mining industry.

“It’s not good but it does happen as it gets towards the end of the financial year.

“It has been a practice in the past in other places.”

http://www.abc.net.au/news/2012-04-30/union-downplays-mine-lay-offs/3980188/?site=tropic&section=news

Free house part of deal

WORKERS at terminally unprofitable Norwich Park Mine near Dysart could score a house if they opt for a redundancy package today.

BHP Billiton Mitsubishi Alliance made the offer in official documents circulated to mine workers – and now obtained by APN – when the project’s closure was announced on April 11.

They have until midnight today to respond.

In a question-and-answer section, the document explains what happens to staff who do not want, or are ineligible to slot into roles at other BMA mines.

For those who have purchased a house from BMA “under caveat”, taking a redundancy or being sent to work at a distant project would mean “BMA will remove the caveat conditions that apply to your property”.

“The property will then be owned by you free of encumbrances.”

For those who are given a role nearby, whatever arrangements have been made with BMA will remain in place.

Those given a voluntary redundancy will be given at least 13 weeks of base pay and a further $3762 for each year the worker has been with BMA.

The 490 BMA staff will fill out list of preferences 1-9 of company sites they would want to work – voluntary redundancy is the first on the list.

But all will have to apply for their new roles.

Those who do not fit the “skill set” of a new role and have not already opted for a voluntary redundancy will have a redundancy forced upon them.

A Construction, Forestry, Mining and Energy Union spokesman has warned workers to be cautious of taking a voluntary redundancy.

The union has previously protested both the closure of the mine, and that BMA was not automatically shifting workers into new positions.

“Whatever the worker decides, they need to be confident of their future arrangements,” a spokesman said.

“If you take the voluntary redundancy, then the company is not obligated to give you anything.

“They pay you out and you’re on your own.”

It believed there were up to 1000 vacancies within the company’s fleet of Central Queensland projects.

The 10-page missive spells out that the closure of Norwich Park had nothing to do with industrial action nor that BMA was considering selling the site.

BMA did not respond to questions before deadline, but has previously detailed that it would redeploy as many workers as possible to its other projects.

 

BMA SAID

Will BMA make Norwich Park a contractor-operated mine?

At this stage there are no plans to operate Norwich Park mine as a contractor operation.

Why is BMA spending millions on new sites, yet is saying that Norwich Park is uneconomical?

Each of BMA’s assets is assessed in its own right. Each mine needs to stand on its own two feet.

Can we read and reply to the review of Norwich Park?

The Strategic Review is an internal management process which is commercially sensitive.

Is BMA going to sell the site? If so, and I am made redundant, can I apply to work for the new operator?

BMA has no current plans to sell Norwich Park mine.

State reviewing power of ULDA

THE future of mining towns such as Blackwater and Moranbah are up in the air following Premier Campbell Newman’s push to derail the influence of state planning power, the Urban Land Development Authority.

Mr Newman has clashed with the ULDA on several occasions, labelling it “undemocratic”, “unaccountable” and “unelected” most recently.

On Monday, Deputy Premier and Minister for State Development, Infrastructure and Planning Jeff Seeney confirmed the LNP had started the process of reviewing the authority’s powers.

“As part of its election commitment, the LNP Government has started the process to identify state planning powers that could be transferred to larger local governments,” Mr Seeney said.

“The government believes it is important to shift power back to local government and, where appropriate, give that tier of government the independence to make decisions for their local communities.

“A number of reviews are already underway to make this happen.”

Sections of Blackwater and Moranbah are currently under the control of the ULDA, which was brought in to facilitate the growing and urgent need for affordable housing.

The news of Mr Newman’s push to hand back powers to local governments comes at a time when ULDA projects are well underway in both towns.

Mr Seeney said the LNP saw an ongoing role for the ULDA “or some derivative” in the long term in smaller local governments, but he did not confirm what constituted a smaller or larger local government.

He did promise the ULDA would complete the projects which were already underway, including the Blackwater Urban Development Areas.

The ULDA refused to comment on what the minister said, but it did offer a rundown of the work being completed in Blackwater and Moranbah.

“In Blackwater, for example, work is continuing on Aurora Close – a development of 12 townhouses currently under construction in Arthur St, which will offer the Blackwater community affordable housing options, particularly key workers in the town whose wage levels are generally much less than the resource industry,” a spokesman said.

“The ULDA is also currently assessing an application of a new development in Blackwater which will deliver 171 residential lots to the market.

“The ULDA is also reinvesting $6 million in the resource communities of Blackwater, Moranbah and Roma to provide affordable housing where the supply and cost of housing is making it difficult for local residents on non-mining incomes to rent a home in the community that they live and work in.”

http://www.cqnews.com.au/story/2012/04/25/state-reviewing-power-of-planning-authority/

Mine closure expected to bring down rents and prices in Dysart, Queensland: Agents

By Larry Schlesinger
Thursday, 19 April 2012

Real estate agents selling and leasing properties in Dysart, a small town in Queensland’s Isaac region, expect some reduction in house prices and rents following BHP Billiton’s decision last week to shut down the nearby Norwich Park coal mine indefinitely.

The mine is about 15 kilometres south of Dysart and according to BHP has been losing money for “several months”.

The closure of the mine will directly affect 490 mine employees and up to 1,000 people when including contractors.

However the mining company has said that it will aim redeploy as many employees to the Saraji Mine, about 26 kilometres north of Dysart “to enable, where possible, those employees and families to remain living in Dysart”.

The town has a population of about 3,100 people, according to the Isaac Regional Council.

Julie Williamson from Julie Williamson Real Estate told Property Observer she expects a “huge impact on the market” as a result of the mine closure.

“It will free up a lot of rentals, which will bring the rental market down, which in turn will bring house prices down.

“I believe this will last for a few months, but we know there is still a lot of future employment throughout the other mines.  Hopefully, in the not-so-distant future the market will start to rise again,” she says.

Another local agent pointed out that no miners had lost their jobs and that the mine was relocating people to the Saraji Mine.

“It’s not as bad as the media are beating it up. It’s business as usual. The shops are full – there are no vacant shops,” the agent says.

“People like Lawsie (John Laws) are talking about people losing their job, when no one has lost their jobs yet,” says the agent.

However, she accepts that rents and prices are likely to fall back a little.

“They’ll only crash if people start panicking.”

“The market has been strong up until now… It will only plateau out.”

Hotspotting.com.au director Terry Ryder says it is as yet unclear whether BHP is serious about closing the mine, “or merely using the threat as a negotiating weapon with the unions, who have been making life difficult there for the past 18 months”.

“They are doing the same with rents in Moranbah, refusing to sign up for any more house tenancies until landlords drop their rents.

“But it all emphasises the high risks involving in investing in mining towns – the growth rates and rental returns can be enticing, but the risks are high in markets based on a single industry and often a single powerful employer, like BHP,” says Ryder.

Rents in Dysart start from around $800 per week for a three-bedroom house to as much as $1,800 per week for four-bedroom houses providing double-digit rental yields for investors.

Figures compiled by RP Data show that nine houses in Dysart have been sold since the start of the year, with prices ranging from $374,000 to $695,000.

Among the nine properties to sell this year was this five-bedroom house at 44 Beardmore Crescent (pictured below), which was sold for $695,000 to a Sydney investor from Mona Vale in January.

The property was listed for rent by Vision Real Estate Consultants Mackay asking $2,500 per week.

It was rented out last week at a slighter reduced rent of $2,400 – equating to a yield of almost 18%.

A five-bedroom house on Brock Crescent (pictured below) which sold to a local Dysart buyer for $579,000 is currently available for rent at $1,600 per week (a yield of 14%), with the listing also held by Vision Real Estate Consultants Mackay.

According to RP Data, Dysart house prices rose 13.6% in 2011 following strong gains in 2008 and 2009.

RP Data puts the Dysart median house price at $680,000, compared with $437,000 in March 2011 with growth of 13.6% recorded.

Facilities in the town include a $5 million sports complex including an Olympic-sized swimming pool, a shopping mall, a nine-hole golf course and bowls club, and a Community Civic Centre owned and maintained by Isaac Regional Council.

http://www.propertyobserver.com.au/queensland/mine-closure-expected-to-bring-down-rents-and-prices-in-dysart-queensland-agents/2012041854299

Meet the cash flow kings of Australia

If you’re looking for the best rental yields in the country, look no further than Palmerston in the Northern Territory or the resource centres in central Queensland. These and other markets top our list of the best cash flow hotspots in Australia…

You can’t have your cake and eat it, they say. We say: what’s the point in having cake if you can’t eat it?

Professional property advisors tell us that capital growth is king and that aiming simply for cash flow is a short sighted strategy. You and your bank manager may think a little differently.

When it comes to meeting your monthly mortgage repayments, there’s no substitute for a property that pays for itself. Capital growth will always be a requirement, but few could argue that having a property that covers your mortgage obligations and leaves you with a little cash leftover is a gem. It’s lower risk too.

With that in mind, we’ve dug through the latest RP Data figures and uncovered the country’s 20 markets with the best rental returns.

Queensland is king

While the top rental yields in the country can be found in the Northern Territory, it is Queensland resource towns that make up the lion’s share of the top listed best yielding markets.

It’s not hard to see why. In towns such as Moranbah and Dysart, where the average house is 4-bed, 2-bath, landlords are typically charging weekly rents between $1,300 and $1,500 and largely staying tenanted..

This may not be any news to savvy investors, however. Both Dysart and Moranbah are ultra-popular with buyers. Dysart auction clearance rates are at 100% – meaning that anything that goes onto the market via auctions is getting sold.

RP Data figures also indicate that Dysart properties typically take just 49 days to get sold and that sellers have the upper hand in the negotiation process – the average vendor discount is just 3%.

Compare this to, say, Bondi in Sydney, and the popularity of Queensland mining centres starts to show. Only 57% of properties that are auctioned get sold in Bondi, according to DSRscore.com.au, while vendors are typically giving away 11% discounts on the properties they sell.

Mark your Territory

Palmerston, an emerging area around Darwin, also features prominently in the high end of the list. Southern suburb Bellamack takes the top honours for having the best rental yields in the country at a whopping 15.3%.

What this means is that investors are typically getting $31,460 a year in rent on properties that cost $205,000.

The list

State LGA Suburb Median Price Average Annual Growth Weekly  Rent ($)  Yield
NT Palmerston BELLAMACK (H) $205,000 12.6% 605 15%
QLD Isaac DYSART (H) $478,750 1300 14%
QLD Isaac MORANBAH (H) $610,000 1500 13%
WA Roebourne PEGS CREEK (H) $690,000 14.4% 1650 12%
NT Palmerston FARRAR (H) $249,000 26.4% 580 12%
QLD Moreton Bay BELLARA (U) $116,296 5.7% 270 12%
TAS West Coast ZEEHAN (H) $65,500 24.3% 150 12%
QLD Rockhampton LAMMERMOOR (U) $182,000 10.3% 400 11%
QLD Whitsunday BOWEN (U) $155,000 14.2% 330 11%
NSW Narrabri BOGGABRI (H) $157,500 27.4% 330 11%
WA Port Hedland PORT HEDLAND (U) $728,500 25.1% 1500 11%
QLD Cent. Highlands BLACKWATER (H) $365,000 29.3% 750 11%
WA Roebourne MILLARS WELL (H) $740,000 13.9% 1500 11%
WA Port Hedland SOUTH HEDLAND (H) $754,250 21.2% 1500 10%
WA Coolgardie KAMBALDA WEST (H) $133,000 9.6% 260 10%
WA Port Hedland SOUTH HEDLAND (U) $640,000 28.3% 1250 10%
WA Roebourne BULGARRA (H) $745,000 17.2% 1450 10%
QLD Dalby WANDOAN (H) $315,000 600 10%
WA Roebourne BAYNTON (H) $965,000 30.4% 1825 10%
WA Roebourne BULGARRA (U) $450,000 22.5% 850 10%

This list was compiled using February RP Data figures. Always do your own research before making an investment decision. For stories with a greater depth of analysis, forecasting and comment, grab a subscription to Your Investment Property here.

Australia’s most outrageous rents

How does a rental income of $12.5k per week sound? This is what the owner of an extravagant Sydney apartment expects his property to fetch. Or how about $4.25k per week for a four-bed house in Port Hedland, or $3.8k per week for a seven-bed house in Moranbah? Your Investment Property reveals some of the highest asking rents on the market.

Advertised as a “lives of the rich and famous – one of the world’s great apartments”, this opulent waterside apartment in Pyrmont is on the market for an incredible $12,500 per week. So what do you get for your money?

The harbour-side property has five bedrooms, four bathrooms, a private lobby, a martini bar, a “sumptuous” master suite with his and hers bathrooms and a wine cellar for starters. It also offers what it calls “exclusive access” to a 60ft Sunseeker cruiser, but you’ll have to shell out a separate day rate to make the most of that privilege.

Perhaps unsurprisingly, Sydney’s prime suburbs serve up the lion’s share of Australia’s outrageous weekly rents. Take this extravagant estate just north of the Sydney Harbour Bridge in Kirribilli, for example, which is on the market for a cool $6,500 per week. Or how about this “magnificent family home” in Vaucluse, which is yours for just $6,000 per week? If that’s not quite to your taste, then this modern five-bedroom palace in Bellevue Hill might fit the bill if you have $5,500 per week in spare change.

That’s not to say that the country’s other major cities don’t offer rock star rental properties. Take this “prestige European design executive home” in the Melbourne suburb of Brighton, for example, which is advertised for a whopping $4,500 per week. Or for $3,000 per week it’s possible to rest your head in this waterside mansion in New Farm, Brisbane.

But it’s not only the prestige suburbs in our state capitals that contain some of the country’s highest advertised rents. The mining boom has pushed rents in certain areas up to unbelievable levels.

Take this modern looking four-bedroom, two-bathroom house in Port Hedland for example, which is on the market for an incredible $4,250 per week. Meanwhile, this seven-bedroom, three-bathroom home in Moranbah is advertised at $3,800 per week.

Shock closure of Norwich Park mine sends powerful warning to unions

THE shock closure of the Norwich Park mine sends a powerful warning to unions that mining giants can shut sites even in a resource boom.

Morningstar analyst Mark Taylor said it was also “an easy way” to send a “powerful” message to unions who were in a pay dispute for the past 16 months with strikes.

“If you’re closing down an operation that’s not particularly profitable for you, and if you’re copping grief from unions, it’s kind of an easy way to send a message to them that mines can shut down if they’re not profitable,” he told The Courier-Mail.

The comment comes as CFMEU mining and energy division district president Stephen Smyth raised suspicion over the closure given ongoing strikes at the site.

“I’d hate to think this is the length they’d go to … shut a mine down to show them,” he said. “If it is, it’s a pretty low act to do. For BHP, this is probably simply a business transaction.”

 Mr Smyth said the mine had functioned when the coal price was a lot lower than it was now.

Last night, a BHP spokeswoman denied the allegations, stating the motives behind the mine closure were in the open.

“We talked about it losing money for months now,” the spokeswoman said.

“It was affected by the wet weather in Queensland last year and obviously the higher-cost environment that we’re all currently experiencing across the industry.

“Obviously industrial action hasn’t helped the situation but the cause is basically the economic viability of the operation given the wet weather and the higher-cost environment.”

She reaffirmed that BMA was ceasing production across the mine and would “seek to redeploy employees to our other mines”.

Mr Taylor said a loss-making mine was more likely to stay open in a boom “because you’re going to be making money out of it”.

But he said if prices went off, it would no longer be profitable and become the first to shut.

He said coal prices had been declining “for a while” to around US$200 a tonne.

Queensland Premier Campbell Newman yesterday blamed the Federal Government’s workplace policies for the closure of Norwich Park mine.

“Prime Minister (Julia Gillard) and her cabinet need to take responsibility for creating an environment where we’re seeing a break-out in industrial action,” he said.

“I ask the company concerned to think long and hard about what they’re doing.

” … the very future of the community of Dysart is at stake.”

–  additional reporting AAP

Town fears mass exodus after mine closure

Residents in the central Queensland town of Dysart say they face an uncertain future after BHP-Mitsubishi Alliance (BMA) announced it was closing a nearby mine.

BMA says it is stopping operations at Norwich Park coal mine because of a combination of unprofitability and recent industrial action.

BHP boss Marius Kloppers says it was a difficult decision, but the company has a policy of shutting down mines that are making a loss.

“What is clear is that in a number of our commodities, we’ve seen prices come down, particularly in the processing-oriented activities like aluminium, manganese metal, nickel and so on which, combined with high costs, is making life difficult for some of those operations.”

While the mining giant says it will try and redeploy all 1,400 staff, that may not help Dysart where locals fear the closure will force people to leave town.

Dysart has a permanent population of about 5,000, but Margaret McDowell, from the Community Support Group, says the local economy is both distorted by and reliant upon the mining industry.

“A house that goes between $500,000 and $600,000, and your rent, you can pay up to $2,000 a week rent, so there isn’t any affordable housing in Dysart and that is why a lot of our services and the smaller businesses rely on partners of workers in the mines,” she said.

“That is the only way they can afford to live here.”

Ms McDowall says any loss of mine workers from the town will also affect local jobs.

“Workers in the hospital, workers in the schools are partners of people working in the mines,” she said.

Jason Moffatt, who owns the Dysart Bakery, says people are trying to work out what the closure will mean for them and their families.

“I think the worry for a lot of people is that it’s going to have a detrimental effect on sporting clubs and so forth if people decide to move away,” he said.

“The reaction that we’re getting here is that BMA are going to shift their workers into Saraji and Peak Downs, but whether that’s true or not I don’t know.

“But you take one of the mines out and it has an effect on every business in town.”

Mayor Cedric Marshall says local businesses will feel the effects of the closure at Norwich Park.

“It depends on what happens with redeployment and the redundancy packages they offer how many actually move out of Dysart. We won’t know that for some time of course,” he said.

Under pressure

BMA’s asset president Steve Dumble says Norwich Park has been under a lot of pressure in recent times.

“We’ve had some very difficult periods during the last wet season and a lot of damage was incurred at that mine,” he said.

“That has had a big impact on production. We’ve been investing heavily to try to recover there, but in recent times I guess the combination of weak demand, falling prices, those high costs and also some of the impacts on production, particularly from the industrial action taken by the unions, has meant that both our revenue and our costs have both gone in the wrong direction unfortunately.”

But he indicated BMA will not be sacking anyone.

“If there is a silver lining to the Norwich Park situation, it is that there is significant demand for skilled people in this industry. We’ve got a number of opportunities and vacancies across our business where we will seek to redeploy all of our people,” he said.

BMA says it will suffer from the closure because it has breached supply contracts.

Mr Dumble says to avoid liability BMA has triggered the force majeure clause, meaning an unforeseen act has occurred – something it was forced to do last year following the floods.

“Whenever we declare force majeure it is not helpful for our reputation as a reliable supplier,” he said.

“That said, the market though is very weak at the moment and the capacity on the supply side is strong and so it is probably one of those times when it has the least likely impact on customers.”

Doubts

Jim Valery from the mining union says it is an unusual use of force majeure.

“Force majeure is something I’ve always believed to be like an act of God, heavy weather or things like that. The industrial or the agreement discussions is something they very much have control over,” he said.

He also takes issue with industrial action being blamed as one of the reasons for shutting down Norwich Park.

“We would certainly hope that Steve isn’t trying to pay the pitch that isn’t correct. Industrial action has been happening across seven pits. To single out about a mine closure, there has to be some doubt about the reality of what has been said,” he said.

“It hasn’t impacted on the other pits. We certainly hope that it isn’t being bandied about as a way to create further disturbances in further agreement talks at the moment.”

Mr Dumble says it is the union that is the problem.

“This industrial dispute is about on one hand a company that wants to build that better, more competitive future, and a union that wants to stay stuck in the past,” he said.

The next milestone in the industrial dispute comes on May 10 when a ballot of the enterprise bargaining agreement is scheduled to be held.

Boom to bust in Queensland town of Dysart undermined

THEY have weathered the booms and busts in Dysart, along with all the worries that come with coal mining.

But the Norwich Park mine was one of the reasons the town was built on a baking plain in central west Queensland and for workers such as diesel fitter Dean Thacker, married to a local, it provided a degree of security in an increasingly unpredictable world.

Until yesterday.

As the community came to grips with the move by BHP Billiton to shut the mine in the midst of a coal boom, Mr Thacker and wife Kamia were looking anxiously to their future.

“We’re here as a family and this is where we want to live and work,” Mr Thacker said.

“We’re going to lose a lot of families we socialise with and a lot of friends.”

While BHP Billiton assured the 1400 affected staff and contractors that as many of them as possible would be redeployed to the other central Queensland coal mines it operates in partnership with the Mitsubishi group, recriminations erupted over the closure. As union leaders from the CFMEU accused the company of seizing on industrial action at the BMA sites as an excuse to cut its losses at Norwich Park, Queensland Premier Campbell Newman attacked Julia Gillard for “creating an environment” in which industrial disputes could erupt.

The company has cited the impact of floods, rising production costs and softening coal prices as the principal reasons for the mine closure, but it acknowledges that rolling strikes organised by the CFMEU and two other unions played their part.

Like most residents of this company town, 1000km northwest of Brisbane, Mr Thacker doesn’t want to buy into the blame game.

But he worries about the impact the shutdown will have on his comfortable life with Kamia, 35, and their boys Zeke, 7, and Quinn, 5, in their BMA-provided house. Non-company homes in Dysart command prices of up to $600,000 and rent for $2000 a week.

Then there is the boxing club that he poured his heart and soul into setting up. “To see it go down the gurgler would just crush me,” said Mr Thacker, 34. Mrs Thacker, who works in the local pharmacy, said they had decided to stay on in Dysart even though the cost of living was higher than it would be if her husband commuted from Mackay, three hours away.

The drive-in, drive-out lifestyle was not for them, she said. “We didn’t have kids for me to be like a single mum, with him on a great wage. We wanted to be together,” Mrs Thacker said.

Dysart Community Support Group community development officer Margaret McDowall feared the “ripple effect” from the mine closure. She has lived in the town for 32 years and her husband, son and son-in-law are employed by BMA.

“I have seen it go through ups and downs before but nothing like this,” she said.

Veteran Norwich Park worker Kevin Brown, 53, said its closure would be “another tear in the fabric” of the community.

“A lot of people feel very insecure,” Mr Brown said. “I just hope it works out for the younger people, the young families.”

Supermarket manager Terri Smedes-Bagley said businesses such as hers would be hit. “Of course it will affect us,” she said.

CFMEU Queensland president Stephen Smyth refused to back away from the industrial action, which was being stepped up last night with a 36-hour stoppage at BMA’s Queensland mines including Norwich Park.

BHP, which manages the operation, had told the union the decision to cease production was taken on wholly financial grounds, he said.

“They told us fairly and squarely it was an economic decision because they’re losing money,” Mr Smyth said. “I see BHP treating us as a business transaction but to our members and people in the community it is a huge impact on their lives. The question is, now we’re in a boom – what happens in a bust?”

While insisting that federal Labor was primarily to blame, Mr Newman appealed to BHP and the unions to “think long and hard” about continuing the dispute that had brought Norwich Park to the brink, and Dysart along with it.

Ms Gillard said her sympathy was with those who faced losing their jobs and it was not the time for “the playing of politics”.

Dysart is a primarily Labor-voting town of about 3500 but this was checked at the election that delivered power to the LNP.

The town is in the state seat of Mirani, which until March 24 was the LNP’s third-most marginal seat in Queensland. Labor’s vote at the Dysart booth crashed from 70.38 per cent in 2009 to 50.51 per cent, with most of that vote seemingly going to Bob Katter’s Australian Party, which picked up a creditable 20.65 per cent.