Monday, May 28, 2012

Why is Gina importing workers direct? Because we won't go there


Why was Gina Rinehart given special government approval to bring around 1700 foreign construction workers to Western Australia’s remote Pilbra? Because Australians won’t go there - not in big numbers, no matter how big the mining boom.

The Bureau of Statistics says in the past financial year a net 6163 Australians crossed the Nullarbor to live in Western Australia. That’s a trickle of just 18 Australians per day - slap bang in the middle of the biggest mining boom in a century.

By contrast a net 30,800 overseas migrants streamed into Western Australia - 84 per day. The new workers servicing Western Australia’s mining boom overwhelmingly come from overseas, not because Australians can’t move to Western Australia (there are no legal restrictions on movement between states) but because Australians won’t.

So fast is direct overseas migration to Western Australia swelling that in the most recent quarter for which figures are available Western Australia welcomed almost as many net migrants as NSW, Australia’s traditional gateway.

Asked Friday why when workers were being laid off in eastern states there was any need for Western Australia to import its own an exasperated special minister of state said he would “love workers to come to Western Australia from across the Nullarbor”...

Sadly, “the reality of the Western Australian resources sector is we tend to carry out more successful recruitment across the Indian Ocean than we do across the Nullarbor,” said Gary Gray.

Before taking up his current role as special minister of state Mr Gray was the parliamentary secretary for western and northern Australia. In 2010 he presented the report that recommended the creation of Enterprise Migration Agreements.

The problem it found was huge undersupply of the skilled workers needed to build resource projects, made all the worse because Australians were reluctant to head west. Enterprise Migration Agreements weren’t a particularly important part of the solution. The important things were skilling up Australians, funding a fly-in fly-out coordinator and building affordable housing.

For most projects the existing so-called 457 visas worked well in sourcing skills from overseas. But for a small number of “mega” projects an enterprise agreement struck ahead of time could ensure there was a project at all.

Gina Rinehart’s Roy Hill project is the first. It is unlikely to deprive Australian workers of their jobs.

In today's Sydney Morning Herald and Age

Me on JJJ Hack, Monday May 28:

6 minutes, play or CLICK THEN CLICK AGAIN to download mp3

Related Posts

. It's raining men in the West. 'Cos the rest of us won't go there.

. Go West! But we're not. And it's surprising.

. We Need More Migrants - Treasury



Marek said...

If you can work a FIFO job why would you move your family to the other side of the country? Apart from the inconvenience and huge expense, there is the risk factor, durring the GFC we saw how fast mining companies can dump workers

Rollo said...

Ms Rinehart is a businesslady; business in broad terms is not immoral but amoral.

She found a cheaper source of labour, nothing more and nothing less. If the Visas hadn't been granted, then the supply of labour would have been as was, and the price would have adjusted.
The government in granting 457 visas has shifted the supply curve of labour to the right, thus dropping the equilibrium price.

Obviously if she'd been prepared to pay higher wages, more people would have been enticed; the point is she didn't.

There actually is no labour shortage in Australia, merely a disequilibrium on price.

Peter Martin said...

Fair point. Interestingly Andrew Leigh MP, now a member of the government who supports Enterprise Migration Agreements, made the same point when he was an academic.

Magpie said...

Those statistics say a lot and omit a lot.

Let me put an example I know well.

Imagine you are a security guard. You have NSW licence and would like to go work at Mount Isa (QLD).

First thing, you'll need to get the QLD licence, which costs you money and time.

Then you find this at the Australian JobSearch site: "Please note: employer will give preference to local residents". Why is that? Because housing is scarce locally.,49094CAI,49094CAP,49094FAN,49094GLA,49094MAK,49094MTI,49094TOW,41074GOC,41074IPS,41074LOG,41074NOB,41074ONB,41074SOB,41074SUC,49084FRC,49084GYM,49084TOO,49084WAR,49084WDO&SpecOcc=1392,4411,4413,4422,4421,4412&NewJobs=&Page=1&CurrId=2215639490&Ref=findajob/searchresults.aspx
(Sorry for posting the link this way, I don't know how to embed it).

And how much they pay? 21-25 bucks an hour (yes, not hundreds of thousands per year!). The same a casual security guard makes in NSW.

Would you move there?

Marek said...

Gee that 2008 story is a blast from the past! Good to see that things have improved in the last 4 years...

Salient Green said...

There's plenty of anecdotal evidence (talkback radio, blogs, newspapers) that rollo is correct.

People have gone to the trouble of getting licences and tickets for heavy machinery, at high expense, and have been refused jobs.

How could any low income household which generally lives week to week find the funds, let alone the emotional wherewithal to move that far without some assistance and assurance of a job, assuming they have the training required.

It seems that the miners have deliberately put up barriers to Australian workers, with the assistance of the government, in order to justify a lower cost workforce from overseas.

Anonymous said...

I'm from WA, I have a home and a family in WA, yet I have had to move to the East to get work. I have been trying to return home to WA for 3 years now. Most of the professional job ads in my field of IT are in mining and resources or demand expertise in a particular toolset like SAP. I know I am very capable of applying my existing skills to a new industry yet as I don't have the requistite experience my applications vanish into the aether. It is incredibly frustrating to read about all these undefined skill shortages when employers are so restrictive in their job ads.

Magpie said...

Peter and all,

Serendipity at play!

Just last night 4 Corners was about the mining boom in QLD. You should watch it, if you missed it.

Pay attention at what a bloke called Roger Ferguson says. Basically, he can't or won't pay his staff the same money mining companies pay theirs.

But, are things cheaper for those not working in mining?

Sydney Morning Herald Editorial said...

Another fine mess they've got themselves into

May 29, 2012

EVEN Labor's supporters - such as there are - will be shaking their heads at the way the Gillard government has managed to fall into disarray over the issue of foreign workers. How on earth could it have happened?

The issue looks simple. Gina Rinehart's company Hancock Prospecting needs workers to build the big Roy Hill iron ore mine in the Pilbara. Despite the malaise in manufacturing in the eastern states, mining companies find it hard to attract Australian workers to remote, difficult locations. So Hancock Prospecting applied for permission to bring in workers from overseas on an enterprise migration agreement, or EMA.

This is a new variety of entry qualification, based on the section 457 visa. Foreseeing that new mines then planned would require extra skilled workers, in 2009 the government set up the National Resources Sector Employment Taskforce to examine how best to supply them. It made 31 recommendations covering training, workforce participation for women and indigenous Australians, and immigration rules, including EMAs to speed up the certification of skilled migrant workers for specific projects. The government accepted all its recommendations in March last year. So far, an observer might think, so sensible.
Hancock Prospecting's application for 1700 workers for Roy Hill under its EMA was the first to be approved. The workers to be brought in from overseas are less than a quarter of the total workforce at Roy Hill - expected to be about 8000. Of that number, another 2000 are to be training positions for Australian workers. Even to the most xenophobic, those figures should not have been hard to sell.
Yet the Prime Minister appears to have been nervous about how the approval would look. The approval did not have to go to cabinet, and last Thursday, when the Immigration Minister, Chris Bowen, in effect announced the decision to the National Press Club, Gillard immediately started to back away.

Union representatives made hay at this hesitation: Paul Howes, the head of the Australian Workers Union, was loud in his criticism, asking "Whose side are we on? I thought we were supposed to be at war with these people [Rinehart and other mining leaders.]" The new head of the ACTU, Dave Oliver, called it "reprehensible".

Their outrage should be taken with a large grain of salt. Both were on the industry reference group advising the taskforce that devised EMAs. Both must have known who the EMAs were devised for, and why. Perhaps they were feigning outrage to cover their own role, and to reassure their union supporters - who knows? Whatever their motive, Gillard should have had none of it. EMAs are entirely justified - a necessary measure to ensure mining development continues at a steady pace.

Australia needs skilled foreign workers to build the massive projects planned. Although some enterprising Australian workers are willing to move to Western Australia to find jobs in the boom state, there are not enough of them. As Peter Martin reported yesterday, only 6000 did so in the past financial year. Yet 30,000 migrants were attracted to the state. The mining boom's enormous projects should be considered in the same light as the big nation-building projects of the past such as the Snowy Mountains Scheme.
True, those projects were government-owned, and today's massive projects are private undertakings. But both are emblematic of their times; both increase the country's wealth. It is a measure of this government's ineptitude that implementing a simple, necessary measure in Australia's best interests - one carefully researched, sensibly devised and widely known among its supporters - can be sold so badly that it causes open rifts within the cabinet and starts renewed speculation about the leadership.

Only under this Labor government is such a thing possible.

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