Hancock claims IR move will jeopardise billions

A $6 billion plan to expand the Roy Hill iron ore operation to 100 million tonnes per annum will be put at risk by the federal government's proposed IR changes, Hancock Prospecting has warned.

The Gina Rinehart-led business is the major shareholder of Roy Hill Holdings, which said it was working to expand its port and rail logistics chain to increase capacity from 60mtpa to 100mtpa.

But in a submission to the Senate inquiry on the government’s proposed IR changes, Hancock said the Bill in its current form would put the expansion at risk.

The legislation would stop new investment and hit productivity and export competitiveness, Hancock said.

Resources employers are particularly concerned by the rules around multi-employer bargaining, where unions will negotiate with groups of employers on wages and conditions.

The government has argued it will drive up wages and close the pay gap, although international evidence has shown countries with individual bargaining have performed better on real wage growth.

“As it stands, this Bill puts at risk not only the interests of mining workers, but the broader economic benefits and tax and royalty revenues the mining industry makes possible,” Hancock’s submission said. 

“At a minimum, the mining sector must be excluded from multi-employer bargaining.”

The submission said resources already paid its workers well, with an average full-time wage of $145,000 per year, compared to $86,000 in other industries.

A six-week strike at the world’s major iron ore export port, in Port Hedland, would cut national export earnings by $9 billion and lose the state government $551 million of royalties, Hancock said.

When asked if he supported the Commonwealth Bill at a press conference in the South West today, Premier Mark McGowan said Australia had a problem with low wages growth.

The federal government has come under criticism from businesses for the speed of the changes, which it has said it plans to legislate this year.

Tasmanian Senator Jacqui Lambie reportedly told Sky News today that the government should split out controversial sections of the bill because it has not given small business time to understand the changes.

Lobby group warning

Last week, Australian Resources and Energy Employer Association said businesses may be forced into negotiations without majority support of their employees.

That could result in disruption of the sector, which powers more than $200 billion of WA exports annually.

AREEA had claimed Part 15 of the bill would remove the need for a union to secure majority support from workers at a business before starting bargaining to replace an expired enterprise agreement.

That would have an adverse impact on workplaces and contractors in the industry, AREEA said today.

The AREEA interpretation is backed up by a fact sheet published by the federal Department of Employment and Workplace Relations.

“The (bill) proposes removing the requirement for employee bargaining representatives, such as a union, to obtain a majority support determination to initiate bargaining if the proposed agreement would replace an earlier single‑enterprise agreement that had passed its nominal expiry date and no more than five years had passed since the nominal expiry date,” DEWR’s document said.

AREEA was similarly concerned about provisions intended to strengthen multi-employer bargaining deals.

“Less than half of the sector’s workplaces (are) covered by an in-term enterprise agreement,” AREEA said.

“Many resources and energy sector workplaces have ‘all staff’ common law arrangements in place, underpinned by Modern Awards, however paying well above award terms.”

Speaking at the National Press Club last week, Minister for Employment and Workplace Relations Tony Burke said AREEA’s concerns were a scare campaign.

“Sadly, I can’t deliver a speech that will deal with that campaign because if you’re on the east coast and you’re on enterprise agreements, then you’re excluded from the multi employer bargaining agreements,” Mr Burke said.

“(And) if you’re on the west coast, the concept of getting a majority support determination up from the workforce is something that has never come close and so therefore I can’t deliver on that one either.”