Senate debates

Monday, 19 June 2006

Questions without Notice

Workplace Relations

2:12 pm

Photo of David JohnstonDavid Johnston (WA, Liberal Party) Share this | | Hansard source

My question is to Senator Minchin, the Minister representing the Minister for Industry, Tourism and Resources. Will the minister inform the Senate of the importance of flexible workplace arrangements, including Australian workplace agreements, to the resources industry?

Photo of Nick MinchinNick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | | Hansard source

I thank Senator Johnston for his question and acknowledge his strong support for the resources industry, especially in his home state of Western Australia. It is very clear that the mining industry is one of the star performers of our economy. According to the recent ABS capital expenditure survey, mining investment has almost doubled in the past year. Also, according to ABARE’s March statistics, the value of mineral exports in the March quarter was up 32 per cent on last year. There are clearly a number of reasons for this very strong investment in export performance for that great industry. Obviously world prices for our commodities are very high and world demand, especially from China, is particularly strong.

But it is also true that our government over our 10 years has done an enormous amount to improve the economic climate in which the resources industry operates. We removed export controls on the industry; we abolished the former Labor government’s no new uranium mines policy—and we look forward to the Labor Party itself abolishing that policy; we took the tax off exports with the introduction of the GST and we expanded the diesel rebates for the mining industry; and, not insignificantly, we changed Paul Keating’s native title act to make it much more workable for this great industry.

But perhaps the most important step I think our government has taken in relation to the resources industry in our 10 years was indeed the introduction of Australian workplace agreements. Figures from the Office of the Employment Advocate show that the mining industry has the highest penetration of AWAs of any industry. Nearly 30 per cent of all employees in this sector are on AWAs—that is, some 34,000 mining industry workers work under AWAs.

Access Economics did a study in 2004 on this issue and demonstrated a very clear relationship between productivity growth in this great industry and the flexibility of workplace contracts. The mining industry, with as I said the highest penetration of individual contracts of any industry, also had the highest annual productivity growth of any industry over that 10-year period. Of course Access did this study specifically as an assessment of the commitment by the then Labor leader Mark Latham to abolish AWAs. In this report it said that such a policy would have the likely outcome of lower productivity growth and less accurate matching of wages and productivity at the enterprise level. Mr Beazley then reversed that policy when he became leader but now he has gone back to the Latham policy, leading the Australian to I think accurately last week have a headline to the effect that Mr Beazley is just Mark Latham mark II.

But, coming back to the resources industry particularly, the Australian Mines and Metals Association estimates that the removal of AWAs would cost this very significant Australian industry some $6.6 billion a year. Regrettably we do not think the Labor Party has ever quite got its head around the process of wealth creation in this country. It seems to be a party devoted entirely to the redistribution of wealth with no concern for how it is created in the first place, and I think that applies to the commodity boom which we are experiencing. It is not simply a function of good luck or Chinese demand. It has been—and our capacity to respond to that Chinese demand is—a function of the very good policies that this government has put in place, including the introduction of AWAs. It is incredibly bad for the Australian resources industry—and for future investment in it—and the Australian economy that the Labor Party has now done another backflip on this policy. We urge the Labor Party to reconsider, do another backflip and reinstate AWAs as their policy.