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Abbott launches reforms, upstream sector wants more

THE federal government will establish "growth centres" for oil, gas and energy resources plus min...

Anthony Barich
Abbott launches reforms, upstream sector wants more

As part of a coordinated approach to strengthen Australia’s competitiveness after 25 years of growth, which Prime Minister Tony Abbott said “should not be an excuse for complacency”, his office yesterday released an action plan to reform the vocational education and training sector and encourage employee share ownership.

The government will inject $188.5 million to fund industry growth centres across five key sectors, which will ensure the community sees stronger returns on the $9.2 billion annual Commonwealth investment in research.

It won’t end there, however, as Abbott said further reforms would be needed to promote the agenda’s ambitions longer-term.

The government will host a series of roundtables around the country over coming months to consult the business community, industry associations, peak bodies and academia on the policy directions outlined in the competitiveness agenda.

The government will change the taxation treatment of employee share schemes to encourage start-ups to attract and retain employees and commercialise good ideas in Australia.

In a joint release with Industry Minister Ian Macfarlane, Abbott said it would reverse the changes made in 2009 to the taxing point for options for all companies.

“Commodity prices have fallen from their peak in 2011, government finances have deteriorated significantly since 2008, our population is ageing and multifactor productivity growth has been flat for a decade,” Abbott and Macfarlane said.

They added that despite the carbon tax being gone, 10,000 pieces of unnecessary legislation and regulations being scrapped, as well as what it claimed was Australia’s biggest infrastructure construction program being undertaken and free trade agreements with Japan and Korea being signed, job creation, growth and competitiveness needed “constant attention”

Its stated objective to reform the 457 visa program for skilled migrants drew the usual responses from unions and the upstream petroleum industry.

“Consistent with the recommendations of an independent integrity review, the government will reform sponsorship requirements; streamline arrangements for existing approved sponsors; reform English language requirements; and move to a risk-based approach for compliance and monitoring,” Abbott said.

He said safeguards would remain in place to ensure that the 457 visa program was not rorted and foreign workers must still receive the same market rates and conditions that were paid to an Australian doing the same job in the same workplace.

The government said it would also improve the significant investor visa program by involving Austrade in the process of determining eligible complying investments, aligning qualifying investments with Australia’s five investment priorities and introducing a premium stream for people investing more than $15 million.

Australian Council of Trade president Ged Kearny said that with unemployment at a 12-year high, it was “mind-boggling” that the government was making it easier for employers to bring in foreign workers.

He also expressed fears, which were echoed by the Construction, Forestry, Mining and Energy Union, that the move could actually hurt foreign workers.

“The combination of poor English language skills, the dependency of 457 visa workers on their employer and poor enforcement of 457 regulations is a lethal one,” CFMEU said.

On this issue, the Australian Petroleum Production and Exploration Association said while employers preferred to recruit and develop local Australian skills, they also needed a flexible, well administered skilled migration scheme.

While saying more work was needed, APPEA said the industry innovation and competitiveness agenda had the potential to “position Australia as a leader in global energy development, informed by cutting edge science and using advanced technologies”

In other areas, however, APPEA believes the reforms do not go far enough.

It called the lack of reform to the existing labour market testing arrangements “disappointing”, as labour market testing made the process of employing temporary skilled migrants significantly more difficult.

APPEA said it would hamper the participation for Australian employees in the international talent development and sharing programs of global oil and gas companies.

“Beyond the announced reforms to build a skilled labour force, broader reforms to labour market arrangements remain urgent,” APPEA said.

“A key part of the agenda’s focus on building a skilled workforce is the need for broader labour market reform.

“Industrial relations reform is well overdue in Australia.

“High labour costs and low productivity are an unsustainable mix – particularly for major project construction.”

APPEA urged further reforms to the Fair Work Act to introduce a form of enterprise agreement to specifically apply to construction of major capital projects, such as large mines and LNG plants – reforms it said could help secure future growth in Australia’s oil and gas industry.

It supported reforms ensuring Australian regulators did not impose additional requirements beyond those already applied under trusted international regulation.

“Currently misalignment between Australian oil and gas industry standards and international standards mean that machinery and equipment that is manufactured overseas and meets international standards is then required to be retrofit to meet Australian standards,” APPEA said.

“The oil and gas industry acts globally, procuring goods and services on the basis of internationally recognised standards.

“Federal and state regulations for onshore and offshore facilities, with varying degrees of prescription of Australian standards, result in significant cost and productivity impacts.”

APPEA listed pressure equipment, lifting equipment, electrical and onshore structures as cases in point – what it called “an unnecessary barrier” to efficient construction and major maintenance.

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