Analysis of five coal mining electorates has found a staggering $989 million a year is lost from local economic activity due to aggressive wage cutting-strategies by mining companies.
A new McKell Institute report analyses the impact on local economic activity of mining companies’ widespread replacement of permanent mining jobs with lower-paid labour hire workers. It found that regions with the highest proportion of coal mineworkers were missing out on hundreds of millions a year:
– The federal electorates of Hunter and Peterson in NSW lost up to $235.85 million
– The federal electorate of Flynn in Queensland lost up to $357.6 million
– The federal electorates of Capricornia and Dawson in Queensland lost up to $395.9 million
The report contains a detailed analysis of how the labour hire employment model has systemically been used to reduce wages that would otherwise have circulated through local mining regions.
“Outsourcing jobs to labour hire companies is a way for mining companies to get around Enterprise Agreements that have been negotiated by workers over decades,” said Mining and Energy Union President Tony Maher.
Mr Maher said corporations have been able to strip up to 40 per cent from the wages of Australian coal miners and remove conditions like redundancy entitlements.
“Right now the industry is booming and mine operators are struggling to find enough workers to dig coal fast enough to capitalise on the phenomenal prices. It simply cannot be argued that coal companies can’t afford to provide well-paid secure, permanent jobs.
“In our coal regions, well-paid mining jobs have traditionally formed the backbone of local economic activity. Secure jobs have traditionally been an important part of the social compact between mining companies and host communities. But this report shows how mining companies have washed their hands of this responsibility and communities are being ripped off.”
In response to the report, the Minerals Council of Australia (MCA) said it is neither credible nor impartial as it conflates casual employment with labour hire and service contractors, assumes that all indirect workers are precariously employed (whereas service contractors negotiate their own enterprise agreements and usually with unions), relies on hypothetical average pay rates and shares of casual employment devised by the Mining & Energy Union, and selects a simplistic economic model that generates the desired result by assuming no adverse effects on investment, productivity or employment of extending the highest prevailing wage rates to labour hire workers and service contractors.
The MCA said the mining industry employs a range of agreement options to drive productivity and incomes.
“Mining companies tailor their employment arrangements to suit very different locations, ore bodies, production techniques, occupations and worker preferences,” it said.
