New wave of foreign workers in mining will “take the choke off” small business

The controversial approval of 1,700 foreign workers for Gina Rinehart’s Roy Hill mining project is a boon for small business, according to business groups.

Rinehart has been given special government approval to bring in the foreign construction workers to the remote Pilbara region through the first Enterprise Migration Agreements for a mining project in Western Australia.

There are more to follow with six other resource companies in the process of seeking federal approvals for EMAs to allow them to hire low-skilled and semi-skilled workers from overseas for projects with a value of more than $2 million.

However, John Nicolaou, chief economist at the Chamber of Commerce and Industry of Western Australia (CCIWA), told SmartCompany the EMAs are a “very positive step” for meeting Western Australia’s workforce challenge and the challenges of the nation as a whole.

“To the extent that these large mega projects can source the workers they need, ultimately it takes the choke off other areas of the economy who cannot compete on price for scarce labour,” says Nicolaou.

“That will help small and medium enterprises who are probably finding it most difficult.

“While SMEs will do whatever they can to provide the right environment and conditions for workers, the sheer value of the salaries on offer in many resource projects is well above what an SME can match or offer and that does resort in a tremendous pull to the resources sector away from other sectors.”

Nicolaou says it is disappointing that only big companies will be able to access the scheme as the high threshold requires a company to have 1,500 workers and a $2 billion investment.

“The Federal Government can do more to make it easier for other WA businesses, particularly small- and medium-sized, to attract skilled overseas workers,” he says.

Research by the CCIWA estimates that Western Australia will fall 210,000 workers short by 2020 if the current population and migration trends are not altered.

Nicolaou says the next decade is one of “significant investment” particularly in the resources sector, with the sheer volume of projects likely to create “acute labour shortages” in the short term.

“Our estimates are of significant workforce shortages by the end of the decade if nothing is done to increase the supply of workers into the state,” says Nicolaou.

Paul Drum, head of business and investment policy at CPA Australia, also told SmartCompany the EMAs were likely to have a positive impact on SMEs.

“Opportunity does not present itself very often and there is a big opportunity going on in the mining sector. The fact that they are choosing to bring in these 1,700 workers goes to the heart of the matter that we don’t have appropriately qualified people at that geographic location and if we do they are not prepared to go and take up those jobs,” says Drum.

“In the context of seizing opportunity, in a way the mines are in an invidious position, they need the labour and it will mean that others are not pulled out of jobs in WA in particular.

“It is a bit of an indictment that we don’t have those skills in Australia or that they are not able to go.”

Drum says jobs are not just immediately transferable, so resource companies have to get the skilled labour from where it comes from at the time it is needed.

“By and large we are supportive of [EMAs] as something as necessary; it would not be done if the labour was already there,” he says.