More land needed for regional workers

High accommodation costs in regional Western Australia have made it unviable for resources companies and small businesses to establish or maintain local workforces, an inquiry into fly-in, fly-out work practices has been told.

Those appearing before the federal parliamentary inquiry’s hearings in Perth agreed that it is simply too expensive to maintain local workforces – particularly in the Pilbara – and have appealed to the government to increase the rate of land release to reduce the costs.

And it’s not just resources companies which are opting to employ workers on a FIFO basis – small businesses such as medical practices have also followed suit.

Australian Medical Association of WA president David Mountain told the inquiry the cost of running a medical practice in communities next to mines had even forced some practitioners to consider leaving.

A survey of association members found 74 per cent of practitioners who reported FIFO affecting their service said it had been negative. Nine per cent had considered leaving.

“If you’re in a town where the mining companies are buying up property and using up the rental accommodation, then the rents are up to $2,500 a week and you cannot attract staff…even the GP’s going to struggle if they’re renting,” Associate Professor Mountain said.

“Anyone who is not on a very good salary is going to struggle when you are paying $50,000 on rent, and even so there are very few jobs where you can take that $50,000 and say ‘I’ll be fine’.

“People who already had rentals (before FIFO workers arrived) can’t afford to stay because they can’t afford the huge increases in rent and unless employees already have their own property, then (practices) are losing staff.”

Medical services were already under pressure in regional centres before the advent of FIFO, Associate Professor Mountain said, but the increasing rate of medical staff leaving made it even more difficult to attract staff.

He said practices were now also relying on flying in specialists such as nurses and dieticians but securing local employees for roles such as reception remained an issue because it was not justifiable to fly those workers in.

Fortescue Metals Group said it had no option but to resort to FIFO employment when available accommodation in the Pilbara was exhausted.

It said the WA government’s release of land had been inadequate in volume and timing to cater to the needs of its operations in the area.

Fortescue’s group manager approvals and government relations, Deidre Willmott, told the inquiry that while it was positive the government had released land – such as in Karratha with a plan to accommodate 50,000 people – it simply was not enough.

“The plan for 50,000 is positive, but we ask, why not 100,000?” Ms Willmott said. 

“The lack of available land has been our biggest barrier.”

In its submission the company said the cost of employing a residential worker was three times that of a FIFO employee – a differential it said must be reduced.

 “For this to occur, government needs to release sufficient serviced land to reduce the overall cost of housing and address the current imbalance in supply and demand for residential accommodation.”

The calculation that local workers cost three times that of a FIFO employee did not include the cost of the fringe benefits tax; the tax placed on companies when they provided housing to workers.

Fortescue’s submission was one of a number that recommended the government revise the tax, as it had only worked to make FIFO more attractive and increase its uptake.

However, the Chamber of Minerals & Energy said while there was little doubt the introduction of the tax had hastened the uptake of FIFO, removing it would not necessarily reverse the trend.

“It would have some impact, but I think that overall impact would not be substantial,” the chamber’s chief executive, Reg Howard-Smith, said.

“When you look beyond just the issue of fly-in, fly-out and look at the demographic trends … what you see over the sustained period of time is that there has been this gradual trend of people moving out of mining or farming areas to the coast.”

Mr Howard-Smith said it was a matter of giving people choice and, if more services were available in regional towns, it would make it more attractive for workers to live in those areas. 

However, being able to develop those services relied on the availability of more affordable housing and rentals.

The Pilbara Regional Council said the supply of housing was placed under pressure largely by mine-related services, not necessarily the resource companies.

It said owners of rental homes were loath to enter into long-term leases with traditional renters and instead removed properties from the domestic market to take advantage of FIFO contracts.

Professor Fiona McKenzie, from the Curtin Business School, said the effect of high living and operating costs for services outside of the mining sector had resulted in the creation of ‘mono-economies’.

She also said communities were suffering from the ‘fly-over’ effect in that they missed out on economic benefits because few companies sourced large-scale supplies in the region.