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Speech to the Australian Mines and Metals Association (AMMA) annual conference, Melbourne.



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The Hon Julia Gillard MP

Minister for Education. Minister for Employment and Workplace Relations Minister for Social Inclusion. Deputy Prime Minister 02 April, 2008

Speech

AMMA

The Australian Mines And Metals Association Annual Conference, Melbourne

Introduction

Let me start by acknowledging the traditional owners of the land on which we meet - the Wurundjeri people.

Through their deep associations with Indigenous Australians, people in the resources sector know, perhaps

better than many other Australians, the importance of acts of recognition and reconciliation such as this.

Thank you for that kind welcome, and congratulations to the Association on 90 years of outstanding work

contributing massively to the economic development of Australia and the prosperity we all enjoy today.

As you know, the present day contribution of the mining and metals sector to the Australian economy is quite

astounding:

z $106 billion of economic activity;

z Almost half the nation’s exports; and

z The employment of some half a million people.

275 new mining and energy projects in planning or under construction means there’s a lot more activity to

come.

The current resources ‘boom’ is helping make a new, wealthier Australia and the Rudd Government is

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determined to do all it can to make the boom last.

Since I became Deputy Leader of the Opposition and Shadow Minister for Employment & Industrial Relations

some 15 months ago, we’ve all gotten to know each other quite well.

Of course, we started with some considerable disagreements over serious policy issues surrounding Labor’s

workplace relations policies.

But we’ve managed to generate a highly respectful, professional and genuinely friendly working relationship

so we can continue to talk our way through the issues, to negotiate strong outcomes from a policy and

practical perspective.

That we get on so well shouldn’t surprise. After all, being from Welsh heritage, mining’s in my blood.

I can assure you, there was never any danger of our Julia being ‘sent down pit’, but many of my forebears

were.

My grandfather was a miner. My father was one of seven children and his brothers Ernie and Cliff went

mining while his sisters Milly and Joyce married miners. The fact was, in the village of Cymgrach in South

Wales where my father was born that was just the natural order of things.

The mining boom needs a human capital boom

Back in the days when my ancestors went down mines, pick in hand, pony in pit, people saw mining as a

people-based activity, involving muscle and sweat. Today, when they see massive mines and off-shore rigs

they tend to regard it as a capital intensive industry. About machines and computers.

But now, as then, the fact is our coal, iron ore, bauxite, uranium, oil, natural gas and other resources don’t dig

themselves up or pump themselves to the surface.

It’s still done by people. People who are tough, highly skilled and committed to their jobs.

And every year the skills they need become more complex, requiring higher qualifications and new training.

Managing them well to ensure their jobs are safe and their capacities translate into higher productivity,

becomes more important.

Indeed, when we talk about mining we are actually talking about the two biggest resources Australia has: our

minerals and energy reserves and the skills and know how of our people.

I know the sector takes its skills and people management responsibilities very seriously, making huge

investments of its own.

I understand that AMMA’s own registered training organization alone has provided recognised training to more than 5,000 employees in the last 2 years. And it’s only one of many.

But thanks to under-investment at the national level over a number of years, serious skills shortages have

started to emerge.

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Together with Property and Business Services, the mining industry is currently experiencing the highest

vacancy to employment ratio of any industry, with around 3.6 vacancies for every 100 people employed -

which has helped give it also the strongest wages growth of any industry, at 5.1percent.

The sector is projected to have shortages of around 70,000 skilled employees by 2015, including 42,000 in

Western Australia alone.

This is just part of the 240,000 skilled worker shortage the nation faces by 2016 unless policies change - a fact

that brings with it the danger of higher inflation and interest rates.

To put our prosperity on a more sustainable footing, Australia needs to match our resources boom with a

human capital boom.

We need to become the most highly educated and skilled nation on earth, and to translate those human capital

advantages into higher productivity through a good approach to workplace relations.

I want to talk briefly about both parts of this equation today.

A good approach to workplace relations

Let me start with workplace relations.

The Rudd Government understands the people management issues facing the resources sector.

We understand your priorities:

z The continual need to boost labour productivity to survive in a highly competitive international

marketplace; z The need for certainty that workplace agreements will be adhered to; and

z The strong desire for harmony, cooperation and commitment from your workforce.

We also of course made commitments before the last election to abolish Work Choices and Australian

Workplace Agreements.

There was some disagreement. Some said AWAs were all they knew. Others said they had survived and thrived

without them.

We said at the time we were fully committed to talking to you to get an outcome that met the needs of the

industry for flexibility and certainty.

We established strong consultative mechanisms, and together worked through the issues.

Despite a lot of understandable heat, in my mind a good outcome will be achieved.

We have listen to each other and I have been able to take many of AMMA’s substantive concerns into account

as I refined the terms of our Transition to Forward with Fairness Act.

The Transition Act, which commenced on 28 March, incorporated those concerns in a number of important ways:

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z The creation of Individual Transitional Employment Agreements for employees previously on AWAs;

z The commencement of award modernisation, with a requirement that each award contain a mandatory

flexibility clause to allow for individual employers and employees to make genuinely individual

arrangements; z The creation of new, simple, modern awards with a limited number of award matters to ensure they are

not, and do not become, large, unwieldy, inflexible documents; and z The limit of award coverage to employees earning $100,000 per year or less allowing more highly paid

employees to negotiate their employment arrangements against a limited safety net of our 10 National

Employment Standards.

I want to acknowledge Steve Knott’s generous acknowledgment that:

z Employers in the sector have already developed strategies to operate in the new workplace relations

environment; z The existence of ITEAs will make the transition to the new system smoother;

z The Government’s plans for a modern award system is positive for this sector; and

z The mining industry is well placed to manage necessary changes.

Importantly, AMMA’s submission to the Senate Inquiry into the Transition Bill also acknowledged that the

Rudd Government had stuck to its pre-election commitments and has no intention of stifling the flexibility and productivity of the mining sector.

Other matters, like those dealing with industrial action and compliance, secondary boycotts and union right of

entry, will be dealt with in our substantive workplace relations legislation which will be introduced into the

Parliament later this year.

But let me make it clear that just as we stuck to our promises over ITEAs, flexibility and the $100,000 award

limit, we will stick to our promises on our other policy commitments.

That means there will be tough, clear rules on industrial action, secondary boycotts will remain regulated by

the Trade Practices Act and the current approach to right of entry will be retained.

Each of you will have the opportunity to participate in award modernisation processes, to provide feedback on

our proposed National Employment Standards and to have your say on the substantive workplace relations

laws.

AMMA and major minerals and energy companies will be helping us draft our substantive workplace relations

reforms through their participation on the National Workplace Relations Consultative Council and the

Business Advisory Group.

Rio Tinto - represented by Stephen Creese and Paul Davies as well as Woodside - represented by Don Voelte

and Ian Masson are both members of the Government’s Business Advisory Group

Consultation seldom gets stronger than this.

Continuing talks through these bodies and through other informal processes will guarantee the creation of

what we have promised all along and what we will deliver: a fair and balanced industrial relations system that

is flexible enough to meet the needs of the resources sector, and enables you to increase productivity and

continue to make an unparalleled contribution to national prosperity.

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New skills for the future

The other issue I want to talk about today is skills.

As I mentioned just earlier, it’s a huge disappointment that for the past decade the considerable efforts of the

resources sector in investing in the skills of its workforce have not been matched by the Commonwealth,

which has led to serious skill shortages.

We all know about the shortage of tradespeople and semi-skilled workers - with just under another 50,000

needed by 2015.

With more than 7,500 professionals also needed, the low proportion of university graduates with engineering

skills is also worrying.

According to the most recent OECD figures, just 7.2 percent of Australian university graduates are in

engineering and construction, compared to 12.2 percent across the OECD and 27.1 percent in Korea.

The Rudd Government was elected with a strong mandate to turn this situation around.

We are keeping our promise to have an Education Revolution.

We intend to increase investment and performance in our education system from the important early years,

through primary and secondary schooling, to vocational education and training, university and on-the-job re-training.

We’ve already begun to make a difference in two major ways.

The first is by establishing a strong training partnership with the resources sector.

Powerful new consultative mechanisms are in place with the aim of placing industry development and

business needs at the heart of the skills straining system.

Legislation has already been passed to establish a new statutory body, Skills Australia, which will examine

skills issues and provide advice to help the Government target and build investment in the skills required by

Australian industry.

For too long training has not been matched closely enough to industry’s needs. Skills Australia will widely

distribute information from research and consultations with stakeholders to give entrepreneurs, businesses

and workers the necessary information to inform their training and employment decisions.

Without wishing to pre-empt the advice Skills Australia will provide, it’s obvious from the facts about skill

shortages that the mining sector will be a prime candidate for early action.

The second major approach to improving skill levels is the direct provision of extra education and training places.

In the lead up to the 2007 federal election, we promised an additional 450,000 new training places over the

next four years, with the majority at the post compulsory Certificate III level and above.

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The creation of those places is already happening in earnest.

The Reserve Bank has urged the nation to act on skills and we are responding by allocating places quickly to

head off the worsening skills deficit.

Just yesterday I announced the roll-out of 20,000 new training places as part of the delivery of the Rudd

Government’s package of 450,000 additional training places.

It is reassuring to know that unemployed people will benefit from this first batch of training places and they

could be in the workforce soon.

That training is at Certificate II and Certificate III level but will give those jobseekers the opportunity and the

confidence to contribute to the workplace in a meaningful way.

Jobseeker training will be complemented by higher-level skill development for existing workers in subsequent

phases of this important initiative.

I welcome the support of employers, as well as my colleagues from the State and Territory governments, in

that important endeavour.

It is an undertaking that will service the interests of the mining industry and other vital Australian industries

that are suffering from a shortage of relevant skills.

We also promised to invest $2.5 billion over ten years to establish a Trade Training Centres in Schools

Program to improve secondary student access to high quality training in traditional trades and emerging

industries.

I have already written to all secondary school principals encouraging them to apply for funding in this

important initiative designed to give young Australians greater training opportunities and help address skills

shortages.

We know that you can’t retrain a person overnight and that the lag effect from training investment means the

benefits will take some time to come through.

For this reason, we understand the need for industry to be given temporary access to adequate skilled labour

immediately through the 457 Visa program and, for the longer term, though a continuation of a strongly skills-focused immigration strategy.

Conclusion

So as you can see, the Government is absolutely determined to do everything within its powers to ensure the

resources sector continues to grow, productively and sustainably, to deliver the prosperity all Australians

want.

It’s going to involve finding the optimal way to harness the knowledge, skills and commitment of the sector’s

workforce to ensure productivity goes up.

We don’t have to choose between being an old economy based on extraction or a new one based on knowledge.

They’re the same thing.

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The good relationship the Government and AMMA have developed will ensure the right issues are raised and

solutions found.

Consultation has worked well in the past, is working well now, and I’m 100 percent certain that it will

continue to help us meet the sector’s needs into the future.

Thank you and I wish you well with your annual conference.

Media Contact:

media@deewr.gov.au

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