East coast in 'deep recession': Linfox

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AAP

June 05 2011, 12:40AM

By Kim Christian

SYDNEY, June 5 AAP - Eastern Australia is in "deep recession" and the NSW and Victorian manufacturing industries are "stuffed", the head of Linfox Logistics says.

Fresh from making a $68 million property acquisition in the mining boom state of Western Australia, Linfox Logistics chief executive Michael Byrne has dismissed suggestions the nation is dealing with a two-speed economy.

"It's a parallel universe that bears no relation to anything else on this planet," he told an American Chamber of Commerce event in Sydney on Friday.

"If you look at the world, eastern Australia is in deep recession, in my view, as is New Zealand."

WA was driving the national economy and Asia was a "different place again," Mr Byrne said.

"If we didn't have mining, Australia would be like Portugal, Spain, maybe Greece and Ireland," he said, referring to European debt problems.

Businesses in NSW, Victoria and Queensland were reducing numbers, while companies in WA were investing in resources projects, he said.

For the first time in more than half a century, the largest privately-owned transport company in the Asia-Pacific region hadn't hired anyone on Australia's east coast.

"I put 3,500 people on this year - 3,000 went into Asia, 500 went into WA and there was not one job, not one job, for the first time in 54 years, on the eastern seaboard," Mr Byrne said.

But he admits the company will never employ the same number of people in WA as in places such as Vietnam.

While it forked out astronomical wages in WA, Linfox employees earned 30 per cent more revenue than company employees in other Australian states.

Linfox revenue in WA has grown from nothing to $200 million in two and a half years.

"It took 54 years to build a $400 million dollar business in NSW. That will be done in WA in less that five," he said.

Mr Byrne believes also nothing can save manufacturing in Victoria and NSW.

"My own view is that they're both stuffed," he said.

"You've got the Australian dollar at record highs, you've got savings rates at 11 per cent, you've got immigration being cut from 330,000 to 160,000, you've got fuel at new record highs.

"Australian manufacturing at these levels is finished."

He added Sydney had "crossed over to the dark side" in terms of infrastructure, with congestion and old, inefficient networks.

He believes the only way to obtain the required labour for the mining sector is to boost immigration through the 457 Visa program based on equitable pay and conditions.

"I was at a Chevron meeting recently in WA where they needed something ridiculous like 6,000 engineers for Gorgon, Browse and those (LNG) projects. They said that Australia's not going to make them," Mr Byrne said.

"We're going to have to get them from overseas and I think Australia is going to have to get over its emotional argument about boat people."

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