THE DISTILLERY: Foreign worker fillip
Jotters back the government's move to boost foreign construction workers on mining sites, while one sees value in resource stocks.
Firstly, The Age’s Peter Martin brings us an easily understandable set of numbers to show why this isn’t a threatening deal for Australian workers.
"Why was Gina Rinehart given special government approval to bring around 1700 foreign construction workers to Western Australia's remote Pilbara? 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 6163 Australians have crossed the Nullarbor to live in Western Australia. That's a trickle of just 18 a day – in the middle of the biggest mining boom in a century.”
The Australian Financial Review’s political editor Laura Tingle explains why the shortage of local workers for these big mining projects is crucial, adding that the unions shouldn’t be acting surprised.
"Does Australia need such agreements? Yes it does, given it cannot guarantee a workforce for such huge projects. Many people might have gone west to take up lucrative jobs in the resources boom, but not enough. The agreements will also give comfort to potential financiers of such big projects that there will be no critical staff shortages. Were the agreements a surprise to the trade union leadership? Since the Australian Workers Union’s Paul Howes and the ACTU’s Dave Oliver both sat on the taskforce that recommended them, you would think not. That is leaving aside the fact that the agreements were announced in last year’s budget and have been under negotiation ever since. A similar agreement – this time for regional migration rather than enterprise negotiation – was announced just over a week ago in Darwin.”
The Australian’s Judith Sloan picked two of the best quotes from leading union figures to demonstrate the kind of political pressure that’s being heaped on the Labor Party.
"Given the many safeguards, the reaction to the announcement of the Roy Hill EMA has been surprising. In fact, there is stiff competition for the most over-the-top retort. National secretary of the Australian Workers Union Paul Howes is a clear contender with his comment that: ‘I thought we were actually attacking these guys at the moment. Whose side are we on? This is a big win for Gina Rinehart, it's a big win for Clive Palmer.’ A close contender for the most outrageous comment is from assistant national secretary of the ETU Allen Hicks who maintained that: ‘It's going to cause a significant amount of conflict on the sites. Our militant members are going to see this as an attack directly on them and they're going to come out swinging.’”
And while we’re talking about bringing in foreign workers, The Australian Financial Review’s Chanticleer columnist Tony Boyd examines the government’s policy to attract not construction professionals, but entrepreneurs.
"It is a two-pronged approach. Migrant entrepreneurs who have sourced at least $1 million in venture capital funding through a member of the Australian Venture Capital Association will be able to enter the country under the new venture capital entrepreneur stream. A second option for entrepreneurs is to apply for the new Business Innovation and Investment Visa, which requires a minimum of 65 points under a test that includes many measures of entrepreneurship. Points are awarded to those with registered patents, registered trademarks, joint venture agreements, export success, fast growing start-ups, and for receipt of government venture capital grants of at least $10,000 in the previous four years. These moves will bring Australia into line with countries such as the United Kingdom, Canada, Singapore and New Zealand. But they will not address the fundamental problem that has plagued the venture capital market in Australia for decades – lack of funds. Both sides of federal politics recognised this funding problem more than a decade ago.”
We’ll stay with national affairs for the moment. The Sydney Morning Herald’s economics editor Ross Gittins looks at the shifting public opinion away from defence spending, while his counterpart at The Australian, David Uren, contemplates the possibility that Australian mining investment levels are about to slow significantly.
The Age’s Peter Ker argues that resources stocks look like bargains at the moment, but investors might be well advised to wait for commodity prices to stabilise. Speaking of stocks trading lower, The Sydney Morning Herald’s Ian Verrender sees some more similarities between the Facebook float and the Myer IPO, aside from just a tanked share price. And while we’re mentioning Myer, The Sydney Morning Herald’s Michael Pascoe hits chief executive Bernie Brookes hard for his warning that political uncertainty could be turning off foreign investors. His TPG Capital days are coming back to haunt him.
In other corporate news, The Australian’s John Durie makes the point that billionaire James Packer will have to balance his ambitions for Echo Entertainment with his pledge to the Victorian government that he’d prioritise his Melbourne casino. The Age’s Adele Ferguson returns to the accountability of superannuation funds, following the collapse of $10 billion merger discussions between two of our oldest funds, Equipsuper and Vision Super. The Australian’s Paul Garvey finds the Australian Securities Exchange running into equity market headwinds during its Asian roadshow for smaller resource companies.
And finally, The Australian’s Robin Bromby claims that many "old hands” are taking this current market downtrend in their stride.