Resources Minister Martin Ferguson
Resources Minister Martin Ferguson Chrissy Harris

'Wage claims threaten investment'

RESOURCES Minister Martin Ferguson says "unsustainable" wage claims by unions could risk future investment in Australia's resources sector.

A report released in Canberra on Monday found Australia's $500 billion infrastructure pipeline would almost be enough to meet the substantial projected increases in coal, iron ore and liquefied national gas exports through to 2025. The only exception was the high market share scenario for LNG.

The report's author, the Bureau of Resources and Energy Economics, used low, medium and high global market share scenarios for each of the commodities out to 2025.

It found while planned LNG infrastructure capacity exceeded projected export volumes, there was insufficient time to build the additional capacity by 2020.

Under the high market share scenario, Australia's LNG exports could grow to 106 million tonnes by 2020, leaving a shortfall of 25 million tonnes of annual capacity.

BREE also stressed the need for planned projects to be delivered without delays - a point Mr Ferguson and Regional Australia Minister Simon Crean were at pains to make as they released the report.

The release coincided with Australian Mines and Metals Association research revealing one in five new resources projects were stalling because of unions refusing to strike workplace agreements.

Mr Ferguson said greenfield agreements, which require working conditions on new projects being thrashed out before workers are hired, was a key issue being looked at in the review of the Fair Work Act.

He said as it stood companies either agreed to union demands or did not get an agreement.

"In some projects we are getting improvements in wages and conditions that I think are unsustainable over time," the former Australian Council of Trade Unions president said.

Mr Ferguson warned future expansion opportunities would "disappear" unless Australia was "conscience of the cost of delivering projects in Australia".

In warning of the global competition for market share, he said "no one owes Australia a living".

And he urged current union members to think of the future.
"We've got the investment, the job is to now deliver it," he said.

"I think there's a message to all of us, including some elements of the union movement, if they're not very careful some members will do exceptionally well, but future members in 10 and 20 years time will miss out."

Mr Ferguson said enterprise migration agreements were pivotal to delivering infrastructure.

"If we don't have the skilled labour we can't build the infrastructure and we can't develop the resource opportunities," he said.

Mr Ferguson said he was confident the Federal Government could work with the Queensland Government on "port and railway requirements".

He also said he would "try and get some of the companies in the Galilee Basin to co-operate rather than building separate railway projects, which is a waste of resources".

Mr Crean said dealing with capacity constraints and competition from other countries were the two key challenges confronting Australia.

He said Australia was "uniquely placed" to capitalise on the increasing global demand for resources, adding delivering infrastructure projects on time would require co-ordination between the three tiers of government and building partnerships with the private sector.

The report will be discussed at length when the Northern Australian Ministerial Forum meets in Alice Springs on Wednesday.

Ministers from Queensland, Western Australia and the Northern Territory will come together for the fourth time since the forum was established after the 2010 federal election.

To view the report visit bree.gov.au.

KEY FINDINGS

  • Australia's ability to meet infrastructure capacity demand though to 2025 was judged by BREE "manageable".
  • Projected increases in export volumes of coal, irone ore and LNG are more likely to be supported by expansion of production from existing mineral provinces.
  • Exports of coal, iron ore and LNG will become increasingly reliant on projects that are planned, but not yet under construction.
  • Delays to these projects would put Australia at risk of not having sufficient infrastructure in place to deal with growing export volumes.
  • Australia will face increasing competition from a number of exporting countries, underlining the need for infrastructure investment.
  • Existing ports and rail systems are approaching maximum capacities in Australia due to robust growth in export volumes.
  • A number of planned infrastructure projects are expected to support projected growth in Australia's exports of coal, irone ore and LNG through to 2025.
  • The exception is the high market share scenario for LNG in 2020. Although planned infrastructure capacity exceeds projected export volumes, BREE determined there is insufficient time to build this capacity by 2020.
  • The need for further work to measure the costs of infrastructure investments and the impacts of delays in construction.


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