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Miles did not think the downturn had hit bottom yet. "Twelve months ago we were in a boom that you didn't have to do a lot to make money. The work just flowed through the door," Miles said. "But now people actually have to get off their backside and work hard to make a living." Sugar cane was Mackay's original boom industry and is still important to the region, but not big enough to pick up the slack. And while Australia will continue to be a significant minerals exporter, digging up and shipping ore and coal overseas soaks up far fewer workers than building new mines. Mines that are being constructed are designed to be more cost-efficient in preparation for a future upswing in demand that is likely to be far more modest than the past decade's. The new reality is still sinking in. Ken Smith earns a living hauling enormous mining truck tires that can exceed more than 4 meters (13 feet) high between the Bowen Basin and his depot more than 1,000 kilometers (600 miles) away in the state capital Brisbane. He drives up to 5,000 kilometers (3,100 miles) a week and maintained a hectic work schedule until July, when orders dropped off. He is confident that a gold-rush mentality will return. "They say it's slowing down, but they're still building new mines," Smith said. "Once it all starts up again, once the money comes back into the coal, there'll be a big scramble for staff again," he said. After accounting for about half of Australia's economic growth in the past two years, the contribution of resource extraction industries such as coal and iron ore mining would fall to one-third, Australian Treasurer Chris Brown told the National Press Club last month. "We have reached a crossroad," he said. "This is not a crisis, but it is a challenge." To maintain economic growth at its long-term average of 3 percent, Australia must turn to industries other than mining and gas, Bowen said. It is a shift that will take time and won't be without pain. The government expects the unemployment rate to rise to 6.25 percent by the middle of next year from about 5.7 percent at present. Its own finances are rapidly deteriorating as slowing economic growth weighs on tax revenues. In May it forecast a budget deficit of AU$18 billion. Last week it announced the shortfall would be nearly twice that. A euphemistic government order for a bigger "efficiency dividend" will require all government departments and agencies to cut spending. On Tuesday, the central bank cut its benchmark interest rate to a record low of 2.5 percent. "We thought we could see it coming," said Howard, owner of the heavy equipment business. "We didn't know whether it was a year away, whether it was two years away, or it could have been five years away. We just had a feeling we had to pull back eventually." He now fears wages in Australia have become too high for the mining industry to compete internationally. "I travel around the world everywhere buying and selling gear, and I think we've become a bit complacent. We need to have a good, hard look at what it costs us to get coal into a train compared to other countries," Howard said.
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