IN our final e-Bulletin for 2012, AMMA chief executive Steve Knott reflects on the year that’s passed in workplace relations, employment growth and political leadership as it relates to Australian resource employers. Read the Q&A here.

1. How would you sum-up 2012 from the resource industry’s perspective?

2012 demonstrated that the resource industry continues to play a very important role in the national well-being, being Australia’s fastest growing source of employment growth at 25% per annum. As the national resource industry employer group, AMMA is proud to see more than 270,000 Australians working directly in the sector, and about 600,000 indirect jobs created through the flow-on affects in downstream activity.
However, 2012 also represented a turning point for the industry, with the latter half of the year in particular producing some warning signs that the industry can no longer be treated as an unwavering cash cow for the economy.
A triple threat to our international competitiveness right now is unsustainable wage escalations coupled with a combative labour environment and declining productivity. Moving into 2013, there remains a dramatic need for policy-makers to take action.

2. What’s been AMMA’s stand-out event for 2012?

In terms of providing avenues of opportunity to Australian workers, one highlight for the industry was the AMMA expo in May 2012. More than 10,000 eager Australian jobseekers attended the expo in Perth, connecting directly with major resource employers, top-tier construction contractors and training institutes. The skills shortage is now critical, with demand for tradespeople and geologists well beyond predictions made by the federal government’s NREST taskforce in 2010. It is against this backdrop that the strong interest shown by jobseekers and the dedication of employers to recruit and retain was a stand-out event.

3. What about the more negative aspects of 2012?

Throughout the year there have been several instances of construction unions openly ignoring court orders and engaging in unlawful strike activity. This has not been confined to resources construction works, with the most publicised event being the CFMEU blockage of Grocon’s Emporium site in Melbourne. In terms of the impact on resources, these events rightly or wrongly show the international investment community that Australia is return to the ‘bad old days’ of illegal and damaging union activity.

Resources-related construction projects will be the primary source of around 90,000 new jobs between now and 2016, but the benefits from these projects could be jeopardised by this kind of union action. Militant unionism, including stalling agreement negotiations and further illegal strike activity needs to be tackled head-on by providing stronger powers to the construction industry regulator and reforming the Fair Work Act.

4. What represents the greatest problem or liability to Australian mining?

A triple threat to our international competitiveness is unsustainable wage escalations coupled with a combative labour environment and declining productivity. This largely stems from the national workplace relations legislation, the Fair Work Act, which provides unions with the power to encroach upon management decisions. By not acting on any substantial reforms recommended by industry in the legislation’s review process, the government continues to ignore employers’ concerns about its impact on the commercial viability of major projects. A ‘strike first, bargain later’ mentality has arisen. Despite recording some of the highest wage growth across the economy, the coal mining sector registered the highest number of working days lost due to industrial action as a proportion of its workforce.

5. Can AMMA advocate a solution to this situation?

Policy makers need to get serious about industrial relations reform. The government must ensure that new projects are not held to ransom by exorbitant wage claims or unnecessary delays. Enterprise agreements should concern the core employment relationship and protected industrial action should only be taken as a last resort, following legitimate attempts to bargain.

Employers and employees should be afforded the fall gamut of agreement options to suit their needs, including genuine individual agreements. Many of these changes were recommended to the government by its review panel, though we are yet to see any significant reform.

6. If you could alter one factor affecting Australian employers, what would it be?

A serious discussion about productivity needs to occur. It is frustrating for industry when meaningful talk about productivity reform is clouded by semantic debate or fear mongering about a ‘return to WorkChoices’. Some commentators have even argued there is no connection between labour productivity and workplace relations. But in the real world, employers need academics and policymakers alike to recognise that concrete measures can be taken to facilitate more productive workplaces. The outgoing chairman of Australia’s independent Productivity Commission has flagged the importance of industrial relations reform to recapturing the productivity growth experienced in the 1990s.

7. What factors work in Australia’s favour?

Australia’s enviable spread of resources is complemented by our close proximity to Asia, whose demand appetite is being driven by the emerging middle classes of China and India. Our competitive advantage is also defined by our management expertise. The value of our exports in mining technology services, allied industries and project management services are worth around $9 billion a year. Unimpeded, the industry is well positioned, but only if the government removes the unwarranted impediments to doing business that currently exist.

8. Where does the future lie for Australian miners?

Australia cannot bank on continued commodity price increases. In the future, growth in export revenues will come from bringing new low cost brownfield and greenfield projects on stream. It is therefore essential to get those agreements right. Australia’s great resources opportunity is not over but its dynamics have changed and its policy demands are greater and more urgent. Australia must do the hard yards of volume growth in order to grow market share.

9. Your predictions for 2013 in Australian resources?

Australia is at a defining point in our economic history, with more than $500 billion worth of resource projects either approved or proposed, estimated to create up to 90,000 new jobs. But we’re seeing projects delayed and even shelved due to unjustifiable wage demands and unprecedented levels of industrial action. 2013 will therefore represent a significant crossroads for policymakers. They must avoid complacency and resist backsliding to deliver the significant reforms needed by industry to realign its cost position with changing global conditions.

10. Any final words for AMMA’s last 2012 e-Bulletin?

As a unified voice driving effective workforce outcomes for Australia’s resource industry, AMMA is proud of the hard work being undertaken by employers to deliver major projects in a challenging environment. For too long the industry has been taken for granted. Over the last decade, the resource industry has been responsible for the highest level of wealth creation and transfer in Australia’s history. We are confident that this can continue for at least another decade to come, but only if supported by meaningful workplace reforms that enhance our productivity and competitiveness.