Australian Resources and Energy Group AREEA has submitted to the Attorney-General’s Department a compelling case for reforming the national industrial relations system to facilitate enterprise agreements that operate for the life of major new project construction.
Responding to an Australian Government discussion paper on the proposed reform, AREEA’s submission argues that facilitating “Project Life Agreements” is a critical and urgent reform that would significantly improve Australia’s ability to attract global investment into new major resources and energy projects – “the likes of which will grow the Australian economy, create tens of thousands of highly-paid jobs, encourage real wage rises and lift national revenues and living standards”.
“Resources and energy investment is overwhelmingly good for the nation,” AREEA’s submission reads.
“The recent Australian resources and energy investment boom saw almost $400 billion of major project capital injected into the nation between 2003 and 2012.
“This directly created 161,000 new resources jobs, saw the sector support about 1.1 million jobs throughout the economy, increased real wages by 6 per cent and raised household disposable income by 13 per cent.
“Australia has a significant opportunity to secure the next wave of major resources and energy project investment. There is approximately $250 billion of new project capital in the national investment pipeline. If all was to be committed, this would directly create an estimated 101,000 new jobs.”
Despite the exciting opportunities in the resources and energy investment pipeline, AREEA warns that Australia’s industrial relations system is holding Australia back.
Citing research and employer feedback from its 2018 New Horizon report, AREEA argues that an especially uncompetitive aspect of Australia’s current industrial relations system is the inability to secure employment terms and conditions beyond a four year timeframe.
“Major resources projects are of such vast scale that they take an average of seven years to build and commission, however the maximum duration of all enterprise agreements under the Fair Work Act, including ‘greenfields agreements’ for new projects, is four years,” AREEA’s submission says.
“The most damaging aspect of the current agreement making framework is that it exposes major greenfields projects to mid-project industrial action.
“That multibillion-dollar capital investment projects can effectively be held to ransom midway through their construction, and be subject to significant industrial disruption, cost blow-outs and delays, is a massive area of failure for Australia’s approach to industrial relations.”
AREEA argues that Project Life Agreements would provide much needed stability and certainty to major project investors. It says it is a “prudent and appropriate” reform for the Morrison Government to pursue, and one that should have bipartisan support based on recent statements from the Federal Opposition.
“Project Life Agreements would also be of huge benefit to Australian workers through the creation of thousands of new highly-paid jobs.”
“With major resources and energy projects providing Australian construction workers with earnings more than double the industry average and the award pay rates, there is no risk that Project Life Agreements could ever result in people being paid below the FW Act’s safety net.
“The biggest risk to these workers is in Australia failing to secure the potential new major resources and energy projects in its investment pipeline, and thus foregoing the opportunity to provide construction employees with the highest paid job opportunities in the country,” the submission says.
AREEA’s Submission to the Attorney-General’s Project Life Greenfields Agreements Discussion Paper, can be read here.
Any members with comments, queries or who wish to get involved with AREEA’s advocacy for important industrial relations reform, should contact [email protected]
