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Regional skills relocation

CHAIR —Welcome. We hope you have more optimistic news to share with us than you had at the time of writing your submission.

Mr Beer —I wish I could say that was the case but, unfortunately, things remain very difficult in our part of the world.

CHAIR —That is no good. Although the committee does not require you to give evidence under oath, I should advise you that this hearing is a legal proceeding of the parliament and therefore has the same standing as proceedings of the parliament. I also need to advise you that these proceedings are being broadcast on the internet. We have received your submission. Before we launch into questions, would you like to make an opening statement?

Mr Beer —I think my submission deals with most of the things that I want to say, as you would expect. In answer to your previous question—and perhaps to bring things up to a more modern context from when I submitted my submission in April—in regional Australia generally, but particularly, unfortunately, in our part of the world we are still finding ourselves in very tough economic times. Although our unemployment rate as at the end of April was slightly better than it had previously been, it is still over 10 per cent—double the national average. In relation to the Indigenous communities immediately to the north and west of us in some cases we are talking 30, 40 or 50 per cent. So there are still very unfortunate economic times. Whilst there is some light on the horizon—we move into our tourist season from about now and the sun is shining and it is a very pleasant place to be—we are still facing a lot of difficulty.

CHAIR —Can you give me an idea of youth unemployment versus the rest of the population?

Mr Beer —Yes, I can. DEEWR has some very specific details on those, as you know—and I actually sit on the Keep Australia Working committee for our region, which is run by DEEWR. In the unskilled youth market and in the 15 to 25 age bracket, in some cases the figures are above 20 per cent unemployment. Not only are the figures very high; but there are issues in the traditional areas where those people tend to pick up work—being hospitality areas and the farming areas in things like the sugar industry and the banana industry. Sugar is probably doing okay now but in the hospitality industry not only is there not very much work but also a lot of the people who are in work have substantially reduced hours. So the pure unemployment figures themselves really do not tell the story, because it is the underemployment as well that is also quite chronic.

CHAIR —Can I perhaps reassure you before I hand over to other committee members, that it is certainly is not our intention to make recommendations that would see your skilled workforce diminish in Cairns. What we are particularly interested in are those high levels of youth unemployment and perhaps more so in your unskilled and semi-skilled areas. It is certainly not our intention to make things worse in an area of high unemployment but to try to look at what recommendations we can make about government policy to assist in areas of high unemployment, and I appreciate your submission in that regard.

Mr HAASE —I have looked at your submission. You have a population of unemployed and you are looking for jobs to come to Cairns. That is an honourable position—an aspiration. Of course, to do that you need to be an attractive destination for one reason or another. I rib a lot of my colleagues who try to promote Cairns that the first thing they might do is get a beach. I never get beaten up for it, though.

Mr Beer —In a proper spirit of respect, I will not respond to that.

CHAIR —I will hit him for you, Russell.

Mr HAASE —The reality always is, of course, that from time to time all of our communities suffer downturns. It is all relative—I come from Western Australia where distances are very, very great—but I would have thought that Cairns would have the opportunity to drive to mining operations in Queensland. Could you explain to me why it is not a possibility?

Mr Beer —It is very much the case. However, having said that, the reality is that in terms of what you would call proximate driving range—and let us say that is up to about six to eight hours away—there are not a large number of large mining operations within that north-eastern mining province. They tend to be in the north-western mining province and then tend to be either west of Townsville or north of Mt Isa—that sort of region. For that reason, and also because we are very well served with our airport here, we think that a much more realistic option is the fly-in fly-out market. We are already a very large fly-in fly-out centre. There are about 2,100 people who reside in the Cairns region who are employed anywhere from the Timor Sea through to New Guinea, the Surat Basin area and the Bowen coalfields.

So we think that is a more realistic option. Indeed, my CEO and the head of our chamber of commerce are actually in your state next week dealing with CITIC and others on some fly-in fly-out opportunities there. If you look at a map—like you we are very aware of distance issues up here—in fact the north-east of Western Australia is closer to Cairns than it is to Perth. So we see that as very much within out ballpark for the sorts of areas where we might be sending fly-in fly-out workers. Alliance Airlines, one of the largest service providers in the fly-in fly-out market, have recently opened a Cairns operation very much with that sort of area in mind.

Mr HAASE —Those who are unemployed presently—and you mentioned some of the highest statistics—is that group, generally speaking, employable now, employable with training or not interested in employment?

Mr Beer —That is the $64 question. I have a fair bit of data on that. But there is no such thing as ‘that group’; they are a disparate group. Firstly, we have a very large Indigenous population to our north and slightly to our west. That population has some endemic issues, and a large proportion of those people probably will not be employable in my lifetime. We have whole communities there whose grandfathers and fathers never worked. They have never worked and chances are that, unless we can turn that around, their children will never work. So that is a particular group with a particular set of issues that are really beyond the scope of this inquiry, although very much worth some attention.

On top of that, we have I think two other groups of unemployed here that I can identify. Again, the DEEWR statistics will tell you that the level of school-age leaving and vocational and university training in our part of the world is low compared to most of the rest of Australia. So there is a significant training issue there.

You made the point that you need a reason for people to come here, which relates to another issue that I think impacts upon our underemployment. People tend to like to come to Cairns; it is certainly not a hardship posting. But a lot of people take the view that it is more pleasant being unemployed in Cairns than in Launceston—at least it is warmer here and you can lie on the beach, if you can find one. As a result we do tend to get some people who come here perhaps not with a view to working but with a view to doing not much at all.

If I can just throw one other thing into that mix. In many ways we are suffering now from Cairns’s success over the last quarter of a century. Cairns went from being a region whose economy was dominated by agriculture and fishing; the sugar industry was far and away our largest industry. Almost overnight, on the back of a Japanese invasion 20 years ago, we became a tourist town, and tourism now dominates our economy to the stage where it is five or six times the size of our sugar industry. That probably allowed us to get a bit lazy and fat. At times of a low Australian dollar, it was very easy to market to the Japanese. As a result of that market turning—issues like the relatively high Australian dollar in recent times, the fact that Japanese are very reluctant to travel during times of crises, be it 9-11 or swine flu or whatever else it might be—we suffer now from our overdependence on that one key industry. One of the things that we need to work very hard at—and we are working very hard at, with the help of all three levels of government—is trying to diversify our industry base here. That is going to be a continual challenge and not something you can do overnight.

Mr HAASE —It is interesting that this morning we had the Queensland Tourism Council in here complaining about the lack of employees to serve the industry generally in Queensland. I would have thought that, if you have unemployment that has been impacted on by a downturn in the tourism industry, you would have a lot of those qualified in such skills. If they were only prepared to travel through Queensland, they would have job opportunities.

Mr Beer —I think that, as a general proposition, that is correct. But, if we look at that in context, the sorts of people who are waiting tables or serving in bars or changing the sheets in your hotel room, are working on comparatively low hourly rates and in casual work that is very seasonal—when there is no work, you get no work. To drive—be it 500 kilometres or 2,000 kilometres—to get another job where it is equally at the vagaries of the market, may not be that attractive when it is the difference between maybe earning $600 or $700 a week or a couple of hundred dollars on the dole.

Mr HAASE —Yes, and maybe a couple hundred dollars in Cairns is enough to live a lifestyle. I know it is in Broome.

Mr Beer —Yes, I think there is a point in that. But, again, we are not talking about the situation here of some of these fly-in, fly-out mining jobs where relatively low-skilled workers can get $120,000 a year, which is a real attraction. These are people who, if they do well in their hospitality jobs, might make $35,000 or $40,000 a year. To relocate a family to get that, if you can get it, probably is not that attractive.

Mr HAASE —Yes, exactly. I hope we can get some strong recommendations out of your submission. Thank you.

Mr RAMSEY —Some of your submission is a bit of a depressing read. You told us that unemployment has dropped a little, down to about 11 per cent or something like that.

Mr Beer —Yes, just under 11. I tend to try and put this in context by saying that 13.8 per cent actually means 17,000 people. I think it gives you a much more visual impact of what that means.

Mr RAMSEY —Yes, and predominantly their skills—and I think this catches up with where Barry was—are in the hospitality or tourism industry.

Mr Beer —A very large proportion of those people, yes.

Mr RAMSEY —It would seem to me you have a bit of a problem in Cairns: everyone wants to live there but, once again, they do not necessarily care whether there is a job there or not.

Mr Beer —I think most of them would. I will err on the side of thinking that human nature is good and that most of them would like to work. Some of the issues we face are not just that people do not want to work. I and others who are trying to promote the region talk about industry diversification. The reality is that in many ways our strengths are also our weaknesses. Three kilometres one way from where I sit is the Great Barrier Reef and three kilometres the other way from where I sit is World Heritage rainforest. We are actually not able, within this very narrow coastal strip that I am on, to have industries that are going to go against that green, so we cannot do mineral processing and we cannot do heavy industry. We are in service type industries and industries like light manufacturing, IT, education and those sorts of things. Those are really the areas where we are trying to diversify our economy—plus becoming a service industry to some areas doing well such as Papua New Guinea and the mining provinces around us.

Mr RAMSEY —The very high rate of unemployment in the Indigenous community is very concerning, as it is in a lot of my electorate. What was your unemployment rate before the financial crisis?

Mr Beer —We have a strong lump of unemployment that without significant structural change I think will always be there at around the five per cent mark.

Mr RAMSEY —You would normally be running about four or five per cent above the national or the state unemployment rate. Is that what you are saying?

Mr Beer —Something like that. I would have said that, if you looked at the Queensland state unemployment rate at what is technically full employment, that is probably around the two per cent or 2½ per cent mark, and we are probably three per cent above that.

Mr RAMSEY —That helps us understand the issues a little bit better.

Mr Beer —Can I say I do not consider that good enough, but it is probably a bit idealistic of me to say that. Issues which are inherent in that problem are long-term issues and need some long-term strategies and plans around them.

Mr SYMON —I was interested that you touched on fly-in fly-out workers before. I imagine from Cairns it is not that easy. I know it is not that easy to get to some of these places from Melbourne; I imagine it is a lot harder from Cairns. Are there a number of people who already do that from Cairns, or is it because it is just too hard that it is not really happening at the moment?

Mr Beer —I will have to take issue with that.

Mr SYMON —Please do.

Mr Beer —I know I sound a bit like a miseryguts in my submission, so I will try and be a bit more positive. In fact we are already a large fly-in fly-out centre. Every day people are flying from here to Lihir Island on the north-eastern side of Papua New Guinea, flying to Ok Tedi, flying to Mount Hagan. They are also flying to Century Mine, south of the Gulf of Carpentaria. They are flying to Groote Eylandt. So there is already a very significant presence there and, as I said earlier, Alliance Airlines have just opened an operation here and located one of their Fokker F100s here, which has a range that will allow them to service the Gorgon gas field in the north of Western Australia.

Because we have such a major airport here, with very good connection services from it, we are a region which can compete with fly in, fly out. We are in discussions currently with a couple of Perth based labour hire companies, and it is not a difficult matter for people to salary sacrifice some of their transport costs, even if they need a connecting flight to a jet out to a mine. We think it is very realistic and is something that we are pushing very hard.

CHAIR —Are there currently any direct flights from Cairns to the north-west of Western Australia?

Mr Beer —Not direct flights, no. You go either through Darwin or through Alice Springs to Perth, and that is obviously the long way round. Basically, we think the market there is the charter flight market. As I say, our CEO will be in Perth and Karratha next week to specifically explore those issues.

Mr SYMON —Russell, can I just go back to the skilled labour that is going out on the charter flights to FIFO. Are they Cairns based or are they going via Cairns on their way there?

Mr Beer —Most of them tend to live within an hour of Cairns. You find that a lot of them live at Port Douglas, Mission Beach and the Atherton Tableland area. So they choose to live in a very nice part of the world but are still only an hour’s drive from the international airport.

Mr SYMON —It sounds very convivial.

Mr Beer —As I say, it is not a hardship posting. If you have a job and you can live in our part of the world, there are worse ways to live.

Mr SYMON —I would like to switch topics now to the relocation of workers. You mention in your submission that that is a threat. Have you come up with any strategies to stop other regions poaching, as it were, your skilled labour?

Mr Beer —Unfortunately, we cannot put up a dingo fence and slavery was banned the last time I looked, and people will go where the jobs are. Really, all we can do is continue to promote our region and its liveability and, more importantly, the generation of employment in our region. That is where I talk about industry diversification. I am talking to you today through a House of Representatives committee hearing, but we are fairly constantly beating down the doors of your colleagues both in Canberra and in George Street in Brisbane. I will be down there in three weeks time for further meetings with Senator Arbib, Jason Clare, Anthony Albanese and others on these issues. I certainly had some lengthy discussions recently with Gary Gray in his capacity as the parliamentary secretary for Western and Northern Australia on the fly in fly out market. There is a lot that can be done and there is a lot that is being done but, as is probably always the case with these things, it is the crisis that brings the action. I was thinking to myself recently, ‘If only I had been making these sorts of submissions and doing these sorts of things a couple of years ago we would be ahead of the game,’ but at least we are out there trying.

Mr SYMON —Thank you, Russell.

Ms O’DWYER —I would like to make a comment. You make a very clear submission and a lot of the questions that I had have been asked. It does seem that your submission is slightly different from some of the recommendations that we have received from other people who have come before the committee, in particular your view that we should be looking more at fly in fly out as opposed to trying to relocate people into other regional communities. Obviously you have detailed in your submission some of the reasons why that is. Is that a broadly held view within the region, or is it something quite specific to Advance Cairns?

Mr Beer —This is not something that I came up with one night with a blank sheet of paper and pencil. As you can see from our submission, we represent a fairly large group of stakeholders. That is our submission and something that we have evolved over a period of time. We are not naive. The fly in fly out market itself has its own challenges and brings its own social infrastructure issues which need to be dealt with. You do not need to talk to many miners to find out how traumatic it is when they are stuck in the middle of a mine in the middle of nowhere and they cannot get out when their kid falls over at school and breaks a leg. All those things bring their challenges.

I think you cross-reference against the challenges. Australia is a very large country and, as I say in my submission, my understanding from my research is that some of the areas in places such as Sweden, Denmark, Siberia and England where they have had some successful relocation experiments have been in places where it is literally an hour’s fast train ride down the road, so it is a bit easier than doing it here.

Secondly, a lot of the areas where I think there will be pending skill shortages are in areas themselves that have significant infrastructure deficits at the moment. If we are going to suddenly ship not just workers but their extended families into those centres, I am sure that will bring its own challenges. You only need to talk to the mayor of the Whitsunday Shire about how he is going to handle all Clive Palmer’s workers that are going to shoot into town, because they going to turn up before anyone starts paying rates but they expect the sewerage to work and the water to work and all those other things. Overlay on that the health and other challenges of it, I think that, if you look at it in a holistic way, to simply have policies that say let us move people like pieces on a chessboard I do not think is the answer. Some of that will happen with market forces and, as I say, people are not slow, so they will do that and they will be driven that way. But I think, with respect, this whole issue needs a more holistic approach to it and an approach that is not, in helping some other areas succeed and helping some people who otherwise may be unemployed get jobs, going to see a region like Cairns turn into a ghost town.

Ms O’DWYER —I think you put a very powerful case.

CHAIR —A couple of questions in conclusion. I am sure you are familiar with Skills Australia’s recent report.

Mr Beer —Indeed.

CHAIR —What it identified as the single biggest single contributing factor to long-term unemployment was lack of competency in literacy and numeracy.

Mr Beer —It is certainly the major issue for our Indigenous population.

CHAIR —I have seen lots of good funding programs and lots of really hopeless ones in this area. Do you have a Clontarf Academy there, do you have—

Mr Beer —How long have you got? One of my other roles is that I am the President of AFL Cairns and as part of that we run an outreach program for many years into Cape York. What we found there is that to try and be too ambitious with people who live in communities where there is literally no industry, no jobs, no role models of people getting up and going to school and working. It is ridiculous to go in there and to try and overnight take those people from where they are now to work ready. You have almost got to have programs in place that are teaching people stuff that you and I would take for granted in terms of hygiene, cleaning teeth, going to work if you have got a job and not leaving your boots and shirt behind. There are a couple of programs up here which I think have got some legs. You mentioned the Clontarf Academy, which is fantastic. We are in the process of starting our own academy based on very similar things here. I do not want to dwell on this and I do not want to sound paternalistic or whatever, but if you go into some of the Aboriginal communities, and some of them are as close to where I am living now as 30 or 40 kilometres away, in some of these communities the grandfather will be 45, he has never worked a day in his life, his son is 30 and has never worked a day in his life, his son is 15 and has never worked a day in his life and has just become a father. For that child who has just been born, unless there is some opportunity to break that stick and to get some role models in there about the reason you have to get up every morning is that you have got a commitment to go to school and after school a commitment to go to work, that is going to be very hard to implement and will not happen overnight.

CHAIR —I agree with you that it will not happen overnight. Like you, I suspect we have seen a lot of very useless programs and it is about getting to that young kid who has just been born and, for example, starting to ask them what they might like to be when they grow up as opposed to doing exactly what their dad, grandad and great-grandad did.

Mr Beer —Where I have seen the tragedy is that we have through AFL Cairns done some scholarships for some bright young athletes to go to boarding schools in Brisbane or in Townsville. I have actually flown back on the light plane when they have come back to their communities for the school holidays. You see people lined up at the airstrip and you think they are there to meet this young kid that I am bringing back wearing his school blazer. In fact they are there to meet and clap off the plane the 19-year-old who has just come back from his first jail term. The culture almost seems to be that until you have been in jail as a man or been pregnant as a woman you have not grown up. It is very difficult. I know I am getting off the topic but I am quite passionate about this. I find it very depressing that not very far away from the very sophisticated city in which I live we have such fundamental social problems on the ground. It is almost embarrassing that I am here talking with you about getting jobs for people who are probably living fairly well notwithstanding having jobs when there are these very fundamental issues with human beings very close to where I am.

CHAIR —I echo your sentiments, but I am also interested in the question of literacy and numeracy amongst the broader community.

Mr Beer —It is an interesting one. Generally speaking, there is a reasonable level of literacy and numeracy. Obviously, to work in the hospitality industry you need that to some degree. I do not have the exact figures before me, but I do have them when I meet with the Keep Australia Working committee in our region. Up to the age of 13 and 14, a very large proportion of our community have basic literacy and numeracy skills, but a lot of our children are leaving school at the age of 14 or 15 and going no further. That means the range of careers they will be able to go into is very limited unless they can get some vocational training. At the moment, there are virtually no vocational training opportunities around because our construction industry, which really supported our tourism industry, is in dire straits because there is no activity up here.

Mr HAASE —I want to put a hypothetical question to you. You mentioned that you have the world heritage listed Great Barrier Reef to the east and national heritage listed areas to the west—or are they world heritage listed?

Mr Beer —They are world heritage listed.

Mr HAASE —If your community had within cooee of it a $20 billion LNG processing facility, I imagine you would be very pleased about the job opportunities it would create for the future.

Mr Beer —We are actually very pleased about the one that is one hour and 20 minutes away in Port Moresby so, by extension, I would have to say yes.

Mr HAASE —There you go—exporting the labour. We have a situation on the Burrup Peninsula, across the continent from you, where, to my amazement, sectors of the Indigenous community are resisting that development—for all the wrong reasons. Anyhow, it is nice to get your comment.

CHAIR —I smile! Russell, thank you very much for your contribution. Rest assured that we understand precisely the concerns that you and your group, Advance Cairns, have raised in your submission and we appreciate your perspective. I apologise again for being late in catching up with you. We very much appreciate you taking part in the hearing today.

Mr Beer —Thank you very much for the opportunity. I may run into you in the corridors of Parliament House when I am there doing some lobbying on 23 and 24 June.

CHAIR —You can always come and catch up with us.

Mr Beer —We find that Jim Turnour tends to open a few doors for us, so we may do that.

—He is not a bad lad. You will be sent a copy of the transcript of your evidence today. I am sure you are familiar with the drill. You can make amendments to errors of grammar and fact. If we need more information, we will come back to you. Thank you, once again. Your time is much appreciated.

[2.33 pm]