Resource sector's jobs crisis

Call 2900 Holden jobs a crisis? Nah, this is a jobs crisis: 78,000 positions disappearing from resources construction over the next four years.

The Australian Workplace and Productivity Agency resources sector skills report (www.awpa.gov.au ) raises questions ranging from whether Gina Rinehart will still be able to justify a large guest worker contingent for her Roy Hill project to how quickly the federal government might be able to turn its infrastructure talk into deeds.

Having finally just about matched its construction workforce requirements with supply this year, the 91 per cent plunge in resources construction jobs by 2018 is likely to create an oversupply of skills for a non-resources civil construction industry that presently has no shortage of them. It is the sharp end of the transition from the construction phase to the production phase of the commodities boom.

But the report also is a reminder of how rich the production phase will be and how important the resources industry overall remains. While construction dives, operational employment rises by nearly 40,000 jobs to 315,472. They tend to be skilled, well-paid, full-time jobs of steadily increasing sophistication. It is the perversity of life that there is another skills shortage though as the world seeks experienced LNG and non-conventional gas operators - and there is no substitute for experienced operators dealing with highly explosive raw material.

Construction projects by their very nature have always been temporary employers. Whether building a bypass on the Pacific Highway or an LNG plant on Barrow Island, construction workers do their stuff and move on. The challenge for governments is to be able to make an opportunity out of the promised problem of excess construction skills - a chance to build infrastructure without the sort of skills shortages (and union greed) that made Victoria's desalination plant such a disaster.

The hoped-for increase in dwelling construction will take some redundant resources workers, others will go back to their farms or other businesses. If they have wisely banked the big wages the north-west has offered, some will buy farms and businesses. But it is the potential for big civil projects that should be sparking imagination. Not since Australia finished the Snowy River scheme have we had such fine construction resources.

Unfortunately, the lead time for major projects and the government still being in the early stages of its "build, build, build" rhetoric bode ill for capitalising on the opportunity.

Another lesson from the study is that the multi-party reference group comprising industry, unions and educators bought the Bureau of Resources and Energy Economics' low-growth scenario as the most likely. The Prime Minister's fanciful suggestion that post-Holden South Australia could be saved by the Olympic Dam expansion being revived is, well, fanciful.

Excess workers should make life easier for the mining executives concentrating on cost cutting and containment. With a little help from a lower dollar, maybe a period of reduced costs could entice a little more happening at the margin, but that will have nothing to do with the resources rent tax.

Michael Pascoe is a BusinessDay contributing editor.

Twitter: @michaelpascoe01