Gillard's mining jobs mystery

The Enterprise Migration Agreement is good policy in a country where there aren't many skilled workers looking for jobs – so why did Julia Gillard try to distance herself from the Roy Hill project?

Crikey

The government is right to assist mining companies – even those run by Gina Rinehart – to obtain foreign workers for constructing large projects. But not because there’s some basic problem with Australian workers taking mining jobs.

Only last week Labor was boasting about the colossal half-trillion dollar pipeline of investment coming into the resources industry (thereby making a mockery of Tony Abbott’s repeated insistence that the tax would harm the industry), but that pipeline goes nowhere if there aren’t appropriately skilled workers available to build and then run projects.

The basic union contention – despite key figures such as Dave Oliver and Paul Howes having been on the Industry Reference Group for the report by Gary Gray that led to the establishment of Enterprise Migration Agreement – is that Australians are missing out on jobs, particularly those displaced by closures affecting manufacturing. But the problem is there aren’t that many skilled Australians looking for jobs. Gray’s estimate is that the resources sector might be 36,000 tradespeople short by 2015. Worse, given the location of mining industry jobs, it makes little economic sense to assume people from major centres in the eastern states will relocate to take them.

Why? It’s nothing to with laziness or being work-shy. It simply doesn’t add up. The biggest group of unemployed people are married people between 35-54. That means they’re likely to have families. Moving your family to a town adjacent to a major mining project is problematic: wages are likely to be high, but so too will housing costs, cancelling out the benefits of any income rise. Ordinary household supplies will also be more expensive. Access to childcare or education choices for your kids is likely to be very limited, as will healthcare options.

If you opt for the other alternative and become a FIFO worker, that enables you to take a job without relocating, but puts significant strain on families and partners who stay behind.

In short, taking a mining job might be superficially appealing, but anyone with a family would have to think long and hard, especially unemployment nationally is only 5 per cent and the chances of picking up work closer to home are high. Instead, mining is better for singles with no kids. But young, skilled singles are only a small component of our unemployed; 15-19-year-olds form a substantial part, but they tend to have fewer skills – and investment in skills and training is a substantial part of the government’s response to the Gray report.

That’s why when Abbott floated the idea of paying unemployed people $4000 to relocate to mining jobs before the 2010 election he was rebuked even by the normally loyal Coalition ally Mitch Hooke, who noted that mining needed highly skilled workers.

Not that the mining industry is blame free. This is the industry that spent decades regarding its workforce as a burden and unions as an enemy to be smitten hip and thigh at every turn. A key reason  the industry confronts a skills shortage is that it has helped create it by failing to invest in its people, but like businesses in other sectors it now feels free to slough that cost onto taxpayers.

So we’re left with training programs and importing workers to fill the skills gaps that the rapid expansion of the industry have opened up, or major projects get delayed or cancelled. Preventing employers bringing in workers will simply delay projects and drive up the price of labour (which of course unions are happy to see). In 2011 there were more than 70,000 people in Australia on temporary employment visas. The maximum of 1700 that would be employed at the Roy Hill project are a tiny addition to that, providing some context for the bizarre anger that last week’s announcement by Chris Bowen prompted.

Quite why Julia Gillard decided to blame the whole thing on Bowen and Martin Ferguson and claim she wasn’t aware of it is a mystery. What sort of prime minister defends herself by saying she doesn’t know what’s going on within her own government?

This is good policy. Good policy, and bad judgment from the Prime Minister. The story of this government.

This story first appeared on www.crikey.com.au on May 28. Republished with permission.