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Resources and Skills Alliance address

6 June 2014

[Check against delivery]

Good morning, and welcome to this important summit.

It’s great to be with you here at a forum where two of Australia’s most important assets are the topic of conversation  – our nation’s skilled workforce, and its mining and resources sector. I can’t think of any job these days that doesn’t require a skill of some sort. The days of unskilled labour are well and truly over.  That is the reality of the 21st century. It is the reality of the modern workplace in Australia. You not only need skills to get a job.  Your skills to be efficient and effective for your job.  It doesn’t matter what the work is or where the work is, from the Hunter coal fields to the iron ore pits of the Pilbara, from the north to the south from the east to the west,  whether onshore or offshore, we need people who are job ready and job steady.

In some occupations, you need skills—specialist skills—not only to be able to do your job, but to do it safely, to stay safe and ensure others are safe. Such skills can mean the difference between life and death, this is the reality of the resources sector – everyone needs to be a specialist and great at their job – if you’re not, you endanger not only yourself, but those around you.

I don’t say that to be political, I say this because I care. I come from an engineering and construction background, both above and below the water, and I believe, especially when it comes to skills, training and safety in this sector, that you have to build this quality into training programs. Do I think Australia has this balance right at the moment? I think some of our training institutions, whether they be public or private, do it well, extremely well, and others need to improve.

I am not alone in this view, your industry leaders share this view. Over the past six months I have been to countless meetings where stakeholders from the resources industry have told me there is a need for change. They have told Minister Macfarlane’s office there is a need for change.

Some of the feedback industry has offered includes suggestions like:

  • industry should be the ones setting training standards;
  • reporting requirements of the National Workforce Development Fund should be reduced, so more time can be focussed on skilling up Australians, instead of filling out paperwork;
  • regular assessments should be undertaken by the Government determining where skills shortages are occurring, so funds are better allocated to the sectors that are more urgently in need of it; and
  • a new assessment criteria of training programs and students abilities is required, as students are not being assessed to the satisfaction of the industry.

In other areas, industry is already on the front foot to address what I have spoken about. The Government is now looking at how we can better support these industry initiatives.  A good is example of this is a skills and training program the Minerals Council of Australia is working on with the sector to develop. They are working with the University of Central Queensland and the University of Southern Queensland to construct an associate degree that allows those who have worked in the mines and on the gas rigs for many years, and committed themselves to the resources sector, to upskill themselves with this associate degree, and use these new found skills to take some of the pressure off our engineers.

It will allow those workers who never had the time to go to university to pursue, while still being able to work, and complete this in two years, instead of four. It rewards their commitment to their career and allows our engineers to work on the more pressing challenges because these newly trained workers are sharing the workload by taking on some more routine duties carried out by an engineer. I congratulate the Minerals Council of Australia for being innovative and listening to their stakeholders' needs, I want to say this Government is doing the same and listening to you, so we can help Australia get the balance right and meet its skills and training needs over the next decade.

Minister Macfarlane recently told the Resources and Investment Symposium in Broken Hill, the Government will not be deterred from its primary focus of rebuilding the nation’s economy and restoring investor confidence. The resources sector is one of the lynchpins of our economy.  It contributes about 10 per cent of GDP, employs around 270,000 Australians and supports the incomes of another 800,000. The Australian Government’s priority has been to send a very clear message that Australia is open for business after six years in which the Labor Government hit the heavy lifter of our economy – the resources sector – with new taxes, constantly rewrote the rules for investment and launched a series of class warfare attacks against the sector, instead of encouraging Australians to be proud of it.

Australia’s future economic successes and jobs will continue to come from the resources sector.  The Australian Government recognises this and that’s why we will not relent on our plan to scrap the carbon tax and the Minerals Resource Rent Tax. Both of these taxes have been a drag on Australia’s mining sector, by undermining its international competitiveness and discouraging growth and investment. The MRRT is nothing more than a bureaucratic burden for the resources sector.  It’s a badly designed tax that raises virtually no revenue, but slugs resources companies with millions of dollars in compliance costs. The carbon tax and the mining tax are bad for the economy, bad for jobs and bad for investment. At the last election the Australian people gave a clear verdict on both these taxes – they want to see them scrapped. We intend to deliver what the people want.

It was only a few weeks ago that I had the honour of attending the opening of Andrew Forrest’s and Fortescue’s Kings Mine in the Pilbara. Andrew spoke about his battle in the Federal Court to get rid of the mining tax, I commend him for this. I commended him because this tax is scaring away investors, increasing business costs, limiting the sector’s ability to grow and costing jobs. I told him that day we are here to help him and your sector. This Government intends to finish off the job and while we’re at also get rid of the carbon tax. Because, without these taxes gone, investors will continue to steer clear of the Australian resources sector.

The Australian Government recognises the importance of the resources sector in creating hundreds of thousands of jobs, supporting local communities and generating national revenue. Rebooting the resources sector will be an essential plank in rebuilding the economy after Labor’s legacy of record debt. An adequate and responsive skilled workforce is one of the critical factors in building a productive and competitive mining sector in Australia. Timely access to suitably skilled workers is important for resources projects.  Construction in the mining sector has softened, yet the need for employment and skills is evolving as the industry moves from the investment phase to the production phase of the commodity cycle. The Australian labour market is expected to respond to changing labour demand through training, labour mobility and employment participation. This may be, and I stress, may be,  supplemented by skilled migration where suitably skilled Australian workers are not available.

That being said, our commitment, our priority,  is to work with you to grow our own skilled workforce to satisfy the demand, but we are also realists. The Government is committed to boosting national productivity and competitiveness.  We have begun a number of reforms to that end, particularly in relation to skills and labour.

These include:

  • the establishment of the VET Reform Taskforce;
  • introducing Trade Support Loans;
  • delivering a new Industry Skills Fund; inquiries into labour mobility;
  • an independent review into the subclass 457 visa program; and changes to the Fair Work Laws.

VET Policy

The Australian Government is delivering on its plan to create a more effective and efficient skills and training system with a focus on providing practical, job-ready skills that employers want. As the Prime Minister said to the Sydney Institute a few weeks ago, training programs will focus less on trainer priorities and more on employer needs. Through the vocational education and training (VET) reform process, the Government has been working with stakeholders to deliver high quality training, with industry at the centre. On 3 April, Minister Macfarlane chaired the inaugural meeting of the COAG Industry and Skills Council, attended by state and territory ministers for industry and skills.

Members agreed to reform the VET system and three key priorities for action:

  • examine the standards for providers and regulators to ensure they better recognise the different level of risk posed by different providers, enable the regulators to deal more effectively with poor quality in the sector to improve confidence;
  • reduce the burden on the VET sector arising from the constant updates to training packages; and
  • ensure that industry is involved in policy development and oversight of the performance of the VET sector and to streamline governance arrangements and committees.

On 24 April 2014, the council announced that it will establish an Industry and Skills Council Advisory Committee to provide industry with a formal role in policy directions and decision making in the national training system. The Commonwealth will consult with states and territories on the composition and role of the committee, which will begin in mid-2014. The Australian Government is developing an action plan for VET reform from 1 July 2014, and will continue to engage with stakeholders over this time. The Government has supported the South Australia Resources and Engineering Critical Skills Project led by RESA, that addressed skills shortages in the resources sector, particularly in oil and gas drilling, through a systematic approach to multi-skilling workers for new workplace demands.  This shows that training organisations working closely with employers is a great way to tailor training for the specific needs of businesses and their workers, and to deliver qualifications in a way that suits employees working at remote sites.

Trade Support Loans

The Australian Government will help more apprentices complete their training and get the skills for real world jobs with Trade Support Loans from 1 July this year. Loans totalling $1.9 billion over the next four years will be available for apprentices across the nation. From 1 July apprentices will have access to $20,000 over their entire training and when it’s completed, 20 per cent will be immediately deducted from what they have borrowed, with their loan to be paid off once they are earning a sustainable income above $50,000 per year. The loans support apprentices to complete their qualification and keep building the highly skilled workforce that Australian industry requires. Many young apprentices do it tough in the early years and these loans, paid monthly, will ease the financial burden and help increase training completion rates. Our Trade Support Loans are a responsible investment in the nation’s future tradespeople. The loans target occupations on the National Skills Needs List such as plumbers, diesel mechanics, electricians and fitters.

Industry Skills Fund

The new Industry Skills Fund will commence on 1 January 2015 and will deliver close to 200,000 targeted training places and training support services over four years. The fund will assist small and medium sized businesses to diversify and compete better in a global market. Registered Training Organisations will deliver to businesses high-quality accredited and targeted training. This fund will help make Australian industry more flexible so it can seize emerging opportunities like new markets in Asia. The fund will be delivered through the new streamlined Single Business Service initiative. The Industry Skills Fund will put a new focus on delivering the skills being directly sought by employers, to bridge the gap between training and employment. The vocational training space will be greatly simplified, replacing the confusing and bureaucratic network of current arrangements.

Labour Mobility

Labour mobility is an important part of meeting rapidly changing industry skills needs.  The Government will consider recommendations from the Productivity Commission inquiry into Labour Mobility and House of Representatives Standing Committee on Regional Australia February 2013 report into ‘Fly In Fly Out’ work to address issues regarding labour mobility.

Skills Migration

The resources sector is a significant user of temporary skilled migration although 457 visa holders comprise a small proportion of the resources sector workforce (around 2.5 – 3.6 per cent). Timely access to skilled workers is important for development of resources projects.  The government has recently announced a review of the 457 visa, which will examine the appropriateness of the current compliance requirements and sanctions in place for that program. It will also examine the scope for deregulation, while maintaining program integrity. This review will report in June 2014. As I said earlier, our commitment, our priority is to train and grow a skills base in Australia, but we recognise the need to supplement that workforce at times

Fair Work Laws

The Government is putting in place reforms to ensure that:

  • greenfields agreements (enterprise agreements for new projects) can be completed within three months of negotiations starting, so major projects are not delayed and to encourage investment;
  • enterprise agreement negotiations are conducted in good faith and are sensible and fair;
  • protected industrial action can only occur if the Fair Work Commission is satisfied there have been genuine and meaningful negotiations and the claims made by both parties are sensible and realistic;
  • when approving enterprise agreements, the Fair Work Commission will be satisfied the parties have considered and discussed ways to improve productivity;
  • the rule of law is respected, productivity is improved and jobs are created on commercial building sites, through the re-establishment of the Australian Building and Construction Commission.

Regulation reform

The Government is using another powerful weapon in its reform arsenal to strengthen the environment for businesses to succeed. And that is cutting red tape and green tape. We hit the ground running soon after coming to office to pursue this critical agenda. This is about removing obstructive and needlessly time-consuming government rules, regulations and procedures impacting all sectors. Our goal is to reduce the cost of the regulatory burden for individuals, businesses and the community by at least $1 billion every year.  Eliminating inefficient or unnecessary regulation will unlock productivity and competitiveness gains for Australian industry. I’m delighted to say we’ve made good strides towards this goal. All states and territories have signed on to our plan for a one-stop shop for environmental approvals through MOUs.  This will cut duplication in the approvals process and ensure projects go ahead as planned, saving businesses millions of dollars. The result will be a win–win one: it will improve Australia's investment climate, while maintaining high environmental standards. The next step after the MOUs is the drafting of bilateral agreements, followed by negotiation of their approval within 12 months. I’m pleased to say the Australian Government has already secured bilateral agreements with Queensland and NSW.

The Government is very serious about cutting red and green tape.  In the industry department, we’ve established a Regulation Reform Taskforce to deliver the regulation reform agenda in the portfolio. The taskforce will support a culture of regulation reform within the department. It will cut red tape and promote the need to identify regulatory offsets when creating regulations.

Exploration Development Incentive

The Australian Government remains committed to introducing an Exploration Development Incentive from 1 July 2014. This will enable Australian resident shareholders to deduct the expense of mining exploration against their taxable income. The scheme will be available to junior minerals explorers incurring eligible ‘greenfields’ exploration expenditure in Australia. It will be capped at $100 million over the forward estimates. The Government released a discussion paper in March in which it outlined the policy design of the scheme for public consultation.

At the moment, we are looking at the submissions we have received to inform the scheme’s design. The Exploration Development Incentive is an election commitment. By delivering on it, we will be helping realise Australia’s under-explored resources potential. Supporting industry to explore these resources is vital to sustaining our resources sector into the future.

Conclusion

We know the resources industry is central to the prosperity of our nation. It provides essential employment for Australians and export income for Australia. We are committed to supporting your industry to find the skilled workers it needs, and we are committed to training those workers here in Australia. Your success feeds the success of this country and this Government is working in partnership with you. Thank you.

Media contacts: Mr Baldwin's office 02 6277 4200