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Impact of gold on Australia

High cost of labour

The rush to the gold fields and abandonment of jobs had a direct affect on the shortage and cost of labour both in cities and the country. Wages doubled between 1851 and 1853, but even at such inflated rates labour was difficult to find while surface gold was still plentiful. As the Argus reported in 1851;

"No wonder that the small shop keeper was shutting up and abandoning his counter; no wonder that seamen were running away from their ships, printers from their type, doctors from their drugs. In fact everything has assumed a revolutionary character."

In this climate of gold fever, house servants in the city and country could expect to be paid 65 – 70 pounds per annum with rations, while shepherds earned 38 pounds and bullock drivers 50 pounds.

Building a Domestic Market

The gold fields, through their wealth, proximity to ports, fertile soil and temperate climate, were the pump primers of the Australian mineral economy.

Gold was the prime financial assest behind communities as well as individuals, and the profits from success were often reinvested back into towns. Successful diggers took up businesses or farms in the area. Banks and lending societies sprung up and in 1857, Main Street Ballarat was lined for 2.5km with stores, hotels and workshops.

The deeper mines of the 1860s relied on a steady supply of timber for shafts and firewood to fuel boilers.

Foundries emerged to help build and repair, engines, pumps and quartz crushers. As Weston Bates writes in his book Victorian Gold Rushes: "Miners’ clothing and equipment, their high protein food and housing needs stimulated primary and secondary industry to a degree not experienced in pastoralism and agriculture."

The expansion of the overall economy, related in part to the fertile countryside surrounding the mining towns, meant many immigrants were absorbed into activities beyond mining. In Ballarat, one observer commented on the number of carpenters returning to their trade.

Changes to Agriculture and Transport

Gold fields such as Ballarat enjoyed a natural protection from overseas and interstate competition. Proximity to markets and protection from imported grain by distance and freight costs were key to its success. Goods were supplied locally and the manufacturing of candles, soap, boots, harness, agricultural implements and many other items were similarly boosted.

Historian Geoffrey Blainey says before the discovery of gold, graziers were at the mercy of fluctuating overseas prices for wool. But the new population brought by the gold fields meant they could profit from local demand for meat and hides.

"The demand for meat and hides meant that Victoria’s cattle population doubled and the breeding of horses as ‘engines’ for puddling machines, drays and coaches became profitable."

Transport Revolution

The huge cost of railways meant no alternative was available for the Victorian goldfields before 1862 and in NSW before the 1870s. Instead, faster horses and light, durable, American-engineered Concord coaches replaced slow-moving bullocks.

In the mid 1850s it cost 80 pounds a ton to send goods 100km from Ballarat to Geelong - 10 times the price it was to cost by rail in the next decade.

Migrants – vital force in development of Australia

The characteristics of the migrants who had come to the gold fields were as important as their numbers. Ethnically, Australia remained British, but the influence of migrants from China, America, Germany and Poland added a colourful cosmopolitan feel to goldfield towns.

Skilled Migrants

Most middle class immigrants returned to the cities after the initial rush where many became prominent in business, politics and law. Some stayed on in the bush to help out with farming. In 1869, DJ Jones - an acute observer of pastoral life - wrote:

"Our labour in the bush has been supplied from four sources; ‘old hands’, the next is the young native born population; the third, the digging population of the neighbouring goldfields, the last the newly arrived immigrants."

The adaptability of the migrants reflected not only their youth, but also comparatively high levels of education and skill. Geoffrey Serle agues that in 1861:

"...only 11 per cent of the European men in Victoria and 22 per cent of the women over twenty one could neither read nor write – less than half the proportions in the United Kingdom and far better than any other colony or London."

Once established, the migrants helped in the development of institutions such as churches, schools, hospitals, newspapers, libraries and sporting clubs. They contributed to high marriage and birth rates beginning in the 1850s and continuing through to the 1860s.


By Tim Scott


Weston Bate, Lucky City: The First Generation at Ballarat

Geoffrey Blainey, The Rush That Never Ended University of Melbourne Press 1963.

DJ Jones, Bushmen, Publicans and Politicians Deniliquin 1869.

Margaret Kiddle, Men of Yesterday: A Small History of the Western District 1834-1890, Melbourne University Press 1983.


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