Make resource sector “pay” for its own training

The government has rewarded the powerful mining industry for failing to train its own people, according to an economist and skills expert. Just 10 months after the Labor government tried to slug the resource sector with a $12 billion super profits tax – and came within a whisker of losing the subsequent federal election – it’s unveiled plans to inject $200 million into training resource sector workers. The funding injection is part of the government’s response to a series of reports which suggest – among other things – that the sector only trains half its share of skilled workers, and that its so-called skill shortages don’t warrant government intervention. The government said the $200 million Critical Skills Investment Fund, which opened last week, was “an important first step” in addressing resource sector skill shortages and alleviating the flow-on impacts on other industries. “Companies can now apply for funding to improve the skills of existing workers, train adult tradespeople as supervisors, and recruit and train new workers and unemployed jobseekers,” said resources and energy minister Martin Ferguson. “We estimate the fund will help train 39,000 skilled workers over four years and target areas of critical need for the resources, construction, infrastructure and renewable energy sectors.” The fund is part of a suite of programs unveiled last week, most involving joint industry or state funding. They include a framework to identify the skill needs of upcoming resource projects, a program to ensure locals get jobs associated with the coal seam gas plant at Gladstone, Aboriginal employment and training programs in the Pilbara and Coober Pedy regions, and a “ground-breaking adult apprenticeship project” to fast-track the transformation of adult workers into qualified tradespeople. Skills and jobs minister Chris Evans launched the $200 million fund as part of the government’s response to last year’s report by the National Resources Sector Employment Taskforce, ‘Resourcing the Future’. But a National Centre for Vocational Education Research (NCVER) report used as background by the taskforce, ‘Tradespeople for the resources sector: projections 2010-2020’, said the resource sector trained just 3.6 per cent of Australia’s apprentices despite employing 5.6 per cent of the nation’s tradespeople. “The sector would have to double its number of apprentices to be on par with other industries,” it said. Evans acknowledged resource sector poaching in a speech to the John Curtin Institute of Public Policy last week. “Many small and medium sized businesses will tell you that they carried the investment of training skilled workers, only to have them ‘stolen’ by big companies offering high salaries which they simply could not match,” he said. Dr Phillip Toner, senior research fellow with the Centre for Industry and Innovation Studies at the University of Western Sydney, questioned the logic of rewarding this approach by “shovelling $200 million into an industry that is demonstrably under-training”. Toner said resource sector poaching was causing big problems for other industries, especially manufacturing. “It’s getting a double-whammy from the high dollar caused by the mining sector, which makes manufactured exports uncompetitive against imports, and the stripping of its skilled labour supply. “If the mining industry were causing pollution and that was affecting agriculture, you wouldn’t expect the agriculture industry to pay for it. Why should the taxpayer pay for this?” Toner said the latest ‘Australian industry’ report from the Australian Bureau of Statistics showed that the mining sector’s operating profit before tax had increased by 55 per cent to $64 billion in the three years to 2008-09 – helped along by $1.2 billion in government funding for operational costs. And labour accounted for just 15 per cent of the sector’s expenses. “It’s not as if labour costs are huge, and training is going to add massively to their expenses. “What is the public policy justification for funding training for an industry which can demonstrably pay for it?” Evans highlighted the industry co-contributions to the new programs, saying he’d only approved the apprenticeship fast-track scheme because industry was half-funding it and had guaranteed jobs for participants. “Only by partnering with industry to deliver training will we be able to ensure we take advantage of a once-in-a-generation opportunity to give many Australians the chance to participate. Industry has to understand its social obligations to make sure ... that everyone gets opportunities from the growth.” Under the Critical Skills Investment Fund’s rules, industry partners contribute between 10 and 50 per cent of the training costs, depending on their size. Evans also said the new fund would help ensure mining boom jobs went to locals instead of skilled migrants. He said all that many locals had gained from the last boom was higher rents and increased costs of living – not business opportunities – and claimed the resulting resentment had brought down WA’s Carpenter government. Evans noted that WA training minister Peter Collier had been “campaigning to have tens of thousands more migrants in all occupations settled in Western Australia”. “Rarely does anyone come to me and say can you help us train more Australian workers – the focus is always on bringing in overseas workers.” Last month the Chamber of Minerals and Energy predicted the state would need 26,000 extra workers by 2013, according to an ABC report, with the sector’s industry skills council claiming the shortages would get worse unless resource companies and the education sector worked together. But the NCVER report queried the resource sector skill shortages, saying the only skilled workers likely to be in serious shortage over the next decade were building and engineering technicians. This, incidentally, is the only occupation where the sector already trains well over its share of apprentices. Toner said the sector’s lack of training was a market failure. “But a market failure doesn’t always involve the taxpayer having to fund a solution. [Another] way is to impose a tax on the mining industry, and have that ploughed back into the industry for training.”