A Time of Opportunity and Reform for Australia’s Resources Industry
Perth
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For more than a century, this Chamber has been connecting industry, government and the community.
Its members make a profound contribution to Australian exports, jobs and prosperity.
Now is a time of great opportunity for Australia's resources industry.
But if we are to maximise the nation's return from these opportunities there are barriers to be overcome and substantial challenges to be met.
Labour and local content
Challenges include skills and labour.
There may be at least 30,000 construction jobs on new resources projects annually to 2015.
Some predictions are that by 2015 there will be 65,000 more jobs in Australian mining and gas operations than there are today.
To help meet this challenge, the Australian Government established the National Resources Sector Employment Taskforce.
We recently announced our acceptance of all 31 recommendations of the Taskforce’s report Resourcing the Future.
In line with the report, I note the Chamber’s efforts, in partnership with the Queensland Resources Council, to try and heighten high school students’ awareness of opportunities in the resources sector and improve links between schools and the industry through, for example, the ‘Oresome Resources’ e-learning tool.
Effectively tackling the issue of labour shortages will require a joint effort between industry and Government.
I acknowledge industry efforts to date in this regard and encourage you to continue to find proactive approaches to training and growing jobs for Australians.
Resourcing the Future recommended Enterprise Migration Agreements – or EMAs – for ‘mega’ resources projects so that construction staff can be brought to Australia during the critical construction phase.
The Government has indicated its in-principle support for EMAs and is currently consulting on the detail of this recommendation with industry and relevant stakeholders.
With an unemployment rate at 4.9 per cent nationally, and only 4.2 per cent here in WA, the need to temporarily bring in skilled and construction labour to help our massive pipeline of projects get off the ground is clear.
Once up and running these projects will deliver good, skilled employment to Australians for decades to come.
Our focus must always be two-fold – using migration as a tool to meet short-term need but at the same time continuing to develop workers in Australia.
A particular interest of mine, and increasingly for chamber members, is greater Indigenous employment in the resources sector.
The benefits of increasing Indigenous employment are manifold.
Building long-term relationships between Aboriginal communities and the resources sector is now widely regarded by industry as part of its core business.
Doing so helps to address skills shortages on top of the obvious social and economic benefits to remote communities that are essential to industry creating and maintaining its social licence to operate.
There are examples out there that the industry could learn from, including the Larrakia Trade Training Centre in Darwin, whose official launch I attended last week.
This centre, independently funded by the Larrakia Development Corporation with support from INPEX and Total, will improve the employment prospects of young Indigenous people in the Territory across a range of skills and industries.
It will also deliver benefits to industry by increasing the pool of skilled workers available for work on major projects.
Local content is another key issue in Western Australia.
I made my position on this clear last week at the APPEA conference here in Perth.
I support Australian companies, wherever they are based, supplying goods and services to Australian projects.
I support the creation of jobs in Australia.
I support new businesses and technologies in Australia.
What I cannot support are policies which either create or attempt to maintain industries or activities that are inefficient or impose burdens that make otherwise promising projects unviable.
That is why I do not support mandated levels of local content.
The point that has been made repeatedly to me, including by members of this Chamber, is that they have a vested interest in maintaining local capacity.
In fact the long-term viability of many of their essential maintenance providers depends upon these providers gaining substantial work during the construction phase of projects.
Policy reform
Let’s turn now to the question of policy reform and I’ll start with resource taxation.
I extend my thanks to those of you who made submissions, both written and oral, to the Policy Transition Group (PTG) which I co-chaired with Don Argus.
Even those who opposed the Government's policy engaged constructively in the PTG process which positively contributed to our work.
As you would be aware the Government has accepted all 98 of the PTG’s recommendations and is currently consulting on the detail of the draft legislation that we are aiming to release for further public consultation mid-year.
We are being supported in this by the Resource Tax Implementation Group involving industry representatives.
The PTG was very focussed on delivering an economic reform package that will broaden and grow the economy while ensuring the new tax arrangements maintain the competitiveness of Australia’s mining industry and, importantly, minimise compliance costs – particularly for small miners.
Revenue from the profits-based MRRT and the PRRT will allow the Government to:
- cut company tax for all Australian businesses;
- deliver tax breaks for small business;
- boost savings through the superannuation system; and
- invest more in infrastructure in mining regions.
We have committed at least $2 billion to infrastructure projects for Western Australian through the Regional Infrastructure Fund including up to $480m for the Airport WA Gateway Project to improve the roads in and around Perth Airport.
These are important practical measures to help manage the stresses and strains of this booming sector.
Carbon Price
In the same way that you engaged so constructively in the debate over resource taxation last year, I would encourage you this year to engage on what is perhaps an evener tougher debate around pricing carbon.
Yesterday, the Industry Transitional Assistance Working Group met for the first time.
Through this working group, along with the Energy Sector Working Group and the Business Roundtable the Government is engaging with industry as we work through the details of a mechanism to price carbon.
Transitional arrangements are a key concern for your members and work remains to be done on this front.
As this work progresses the Government is committed to continuing a genuine consultation with industry and working to strike the right balance between reducing our emissions and maintaining our international competitiveness.
Uranium
Now let me go to a potential growth area here in Western Australia – that of uranium mining.
Events in Japan have not altered the Australian Government’s position with respect to our uranium mining, export and nuclear power policies.
The Australian Government’s position is that Australia does not need nuclear power, but we recognise that elsewhere, circumstances are different.
Nuclear power, after all, keeps the lights on in many countries, providing low-carbon energy to millions.
We maintain the safeguards we have always had on the development of uranium mines in Australia, and safeguards on the export of nuclear material to ensure it is only for peaceful uses.
As the third largest exporter of uranium in the world Australia plays a critical role in the development of and improvements to global safeguard regimes.
However, our standing as a key supplier of uranium should not be taken for granted and while we clearly have the resources to continue to meet global demand we should not be placing unnecessary barriers in the way of development.
Here in Western Australia the Reasonably Assured Resources (at US$80/kg) have been estimated at over 70,000 tonnes of uranium oxide (U3O8) and Inferred Resources at over 33,000 tonnes.
At Tuesday's spot price and exchange rate the Reasonably Assured Resources have an estimated value of approximately A$8.82 billion.
Premier Barnett has stated that over the next five to ten years, WA may generate more than $30 million a year from uranium export royalties.
A number of operations are currently progressing through the relevant approvals processes including:
- the Mega Uranium project at Lake Maitland;
- Toro Energy's project at Lake Way both expected on line in 2013; and
- BHP Billiton's Yeelirrie project around 2014.
I look forward to these projects coming online and contributing to State and national exports.
Mine safety
Ladies and Gentlemen I would like to conclude today on the all-important issue of mine safety.
The goal of “zero harm” is one which both mining industry and union organisations are in furious agreement on.
Sadly, in 2009-10 there were ten fatalities in the mining industry in Australia including three in Western Australia.
So we still have more to do and further improvements to implement.
From a national perspective the key initiative has been the development of the National Mine Safety Framework (NMSF) which seeks greater national consistency of current safety arrangements.
A lot of work has been done on this over the last two years. It is taking place at two levels.
Firstly, through the broad agreement of all jurisdictions to adopt the content of the general provisions of the model Work Health and Safety Act, which will include specific mining regulations.
And secondly, through the work being undertaken by Western Australia, New South Wales and Queensland to develop additional legislative measures which they believe are necessary to supplement the WHS work to maintain existing safety standards in those states.
The intergovernmental agreement currently under consideration would help ensure legislative content remains consistent now and into the future.
I know the CME has been an active participant in this work.
Greater consistency will provide benefits for your industry including greater certainty about legislative and regulatory responsibilities as well greater labour mobility particularly as common competency standards for key safety positions are agreed.
In addition the recent decisions by jurisdictions to develop a National Mine Safety Database to house a range of key mine safety performance data will enable governments, the industry and individual companies to better analyse and benchmark their safety performances and put in place measures to address any identified safety issues.
Conclusion
Ladies and gentlemen, this industry is in good shape.
Forecast commodity prices are up, exploration expenditure is up, and we are seeing a healthy investment pipeline, not to mention record profits.
This is a time of opportunity and reform.
Provided we tackle barriers to growth together, the work you do in mining 40 different minerals and energy resources across this state will see your shareholders properly rewarded for the risks taken.
But more importantly the growth in Australia’s resources sector is what is now giving, and will give even more so in the future, all Australians a better standard of living.
Thank you