THE resources sector anticipates Enterprise Migration Agreements will enable more than 30 large projects to overcome the labour shortages that threaten their viability.
THE resources sector anticipates Enterprise Migration Agreements will enable more than 30 large projects to overcome the labour shortages that threaten their viability.
The introduction of EMAs was a positive development in the federal budget; it specified that EMAs would apply to projects with capital expenditure greater than $2 billion and a peak workforce of 1,500.
The Australian Mines and Metals Association estimates this will cover 32 projects, including all planned LNG projects and most of the large iron ore developments in the Pilbara.
However it would not have covered BHP Billiton’s Macedon gas project, for instance, which has a budgeted cost of $1.6 billion.
The EMAs come with some conditions; in particular, companies using the agreements will be required to pay 2 per cent of their payroll into an industry-training fund.
And workers coming into Australia under the new agreements will need to be paid the same wages and conditions as local workers.
The budget had several other measures to address labour shortages, including plans to lift regional sponsored migration from 10,000 to 16,000 places, and to streamline apprenticeships and training.
AMMA chief executive Steve Knott described EMAs as a huge step in the right direction.
Mr Knott said despite pulling all the right policy levers on the domestic labour market – encouraging increased workforce participation and encouraging skills training – Australia’s labour force simply could not meet the levels of demand in the not-too-distant future.
“Despite the best efforts of both industry and government to train more workers, the stark reality is that we need overseas workers to fill the gaps and progress our resource projects,” he said.
Mr Knott warned that, despite the migration reforms, a very real risk of a shortfall of skilled workers remained in some industry sectors.
The tight supply of skilled labour has been one contributor to rising costs and delays on large projects.
Woodside’s Pluto project has come in over budget and behind schedule, and there is persistent speculation the Gorgon project is behind schedule, though Chevron insists this is not the case.
Project developers have responded to local market conditions by increasing the amount of work they are sending overseas, which has left local steel fabricators unable to fill their workshops.
The likely development of floating LNG projects will add another dimension to the local content debate, because these LNG plants can potentially be designed and built entirely outside Australia.
The Australian Steel Institute and the Association of Professional Engineers, Scientists and Managers of Australia (APESMA) have led the charge for more local content, and are backing a Labor Party bill to support this objective.
