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Addressing the labour supply problem

AMEC Conference 2011

Steve Knott - Chief ExecutiveAustralian Mines & Metals Association (AMMA)

30 June 2011

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About AMMA

• Established in 1918

• Largest and most representative lobby group for the resource industry

• Membership includes coal, metalliferous, oil and gas, energy, construction and service providers

• Recognised as the peak employer organisation for the resource industry and

• Regularly features in the ‘IR power and influences’ review

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Current and future resource projects and investment

• Oct 2010 - 72 resource projects at advanced or committed stage worth $133 billion

• April 2011 – 94 resource projects at advanced or committed stage worth $173 billion

• The resource industry accounted for 9% of GDP in 2009-10 ($102.6 billion)

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2005 2011 2015

Direct employment 107,500 205,800250,000

Indirect employment 320,000 620,000750,000

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Mining industry employment growth

Source: ABS Labour force, February 2011 and NRSET Resourcing the Future Report

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-20

-15

-10

-5

0

5

10

15

20

25

MiningManufacturingConstructionAgriculture

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Source: ABS Labour Force Stats, February Quarters 2001 - 2011

10-year employment growth by industry

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

5

% employment

growth

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Source: Job Vacancies, Australia, February 2011, 30 March 2011, Catalogue no 6354.0. ABS

2006 Nov

2007 Feb

2007 May

2007 Aug

2007 Nov

2008 Feb

2008 May

2009 Nov

2010 Feb

2010 May

2010 Aug

2010 Nov

2011 Feb

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

Mining industry % vacancy rate pre and post-GFC

Vacancy rate

Pre-GFC Post-GFC

6

%

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Skilled vacancies in mining v other industries – February 2011

Vacancies Total workforce %

vacancy

Mining 8,100 205,800 3.9%

Construction 20,1001.030 million 1.9%

Manufacturing 12,100998,400 1.2%

Source: Job Vacancies, Australia, February 2011, 30 March 2011, Catalogue no 6354.0. ABS 7

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Demand for mining engineers

By 2015

New engineering jobs 1,600+Replacement jobs due to attrition 1,300 =

2,900-New engineering graduates 1,200Shortfall 1,700

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Source: Skill Shortages Australia, June 2010, Australian Government, DEEWR 9

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Demand for tradespeople

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NRSET recommendations

• Promoting workforce planning and sharing information• Increasing the number of trade professionals• Graduating more engineers and geoscientists• Meeting temporary skills shortages with temporary

migration• Strengthening workforce participation• Forging stronger ties between industry and education and• Addressing the need for affordable housing and community

infrastructure

Source: NRSET Resourcing the Future Report

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Trade and non-trade apprenticeship commencements – all industries

1989175,000

1993111,200

2001224,800

2008286,900

2009272,500

2010324,600

Source: NCVER Apprentices and Trainees 2011: Early Trend Estimates March quarter

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Completions

Commencements

In Training

Source: NCVER Data *'Minerals’ is based on ANZSIC 2006, including mining division (ex oil and gas) plus basic ferrous and non-ferrous manufacturing.

Apprenticeship commencements v completions

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14

2001 2005 2009 2010 20110

5

10

15

20

25

Mining (all)Exploration and other mining support services

Employment of women by mining industry sector

Women as a % of total

workforce

Source: ABS Labour Force, February quarters 2001 to 2011

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457 visa facts

• Two-thirds of visa entrants for the current migration

program are skilled migrants

• More than 50% of 457 visa entrants achieve permanent

residency, most of them under employer sponsored

arrangements

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Projects to be covered by EMAs

• 38 projects have $2 billion or more in capital expenditure• But just 13 are identified as having a peak workforce of

1,500 or more• A further 42 projects have $1 billion or more in capex but

only one has peak workforce of 1,500• If peak workforce threshold lowered to 500, an extra 15

projects brought onboard on top of 13 to 20 already covered

Source: ABARES – Tabular list for ‘Minerals & Energy: Major Development Projects – April 2011 listing.’ 17

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Labor’s broken IR promises

• Right of entry won’t change• Fair Work Australia appointments won’t favour one side or

another• A tough cop will remain on the construction beat• Common law contracts will offer the same flexibility as

AWAs• Majority support of workers will be required to force

enterprise bargaining and strike action• Freedom of association will be upheld

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AMMA Workplace Relations Research Project

• Report on third survey of impacts of Fair Work Act released today.

• Findings include:– Employer satisfaction with the new IR laws continues to

decline– Down by 15% on the first survey conducted in April

2010– Nearly 75% of employers are spending more time on IR

transactions– Employers’ view is that labour productivity has declined

by 10% 19