We Need Rinehart's 1700

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Does Australia’s richest woman, Gina Rinehart, need foreign workers to complete her vast new mine at Roy Hill? According to Julia Gillard and Chris Bowen, the answer is yes. "With more than 8000 workers required during the construction phase of the Roy Hill project, there simply aren’t enough people in the local workforce to get the job done," Bowen said in a press release on Friday.

Rinehart’s Roy Hill iron ore mine is yet another of the giant resources digs that are powering Western Australia’s economy. So far more than $1.1 billion has been committed to the mega-project, which includes plans for a massive earthworks construction and a new railway line to the coast. All up, Hancock Prospecting (Rinehart’s privately owned mining company) says that the Roy Hill tenement contains something like 2.4 billion tonnes of iron ore.

To build all this, Roy Hill will need a lot of workers. As well as the 8000 temporary construction jobs created in the building of the mine and railway, there will also be 2000 permanent jobs down the track for the 20-year life of the mine itself. Getting those workers is crucial to the future of the project. The Australian Financial Review reported today that securing the required labour was one of the funding conditions placed on Roy Hill by Rinehart’s Asian backers, including Korean steel giant POSCO.

And so, with little in the way of prior debate within Labor’s party room, Immigration Minister Chris Bowen committed the government to a so-called "Enterprise Migration Agreement" with Hancock Prospecting last Friday. The EMA will allow for visas for 1715 foreign workers, out of the total workforce of 8000.

It’s taken Labor a few days to get on the same page about EMA’s. Not everyone supports them. The initial reaction against the Roy Hill deal was ferocious, particularly from outspoken AWU boss Paul Howes. "What political genius thought this is a good idea? Who thought this was a great thing to do today? It is just sheer lunacy," Howes fulminated on Friday. Backbenchers Doug Cameron and Kelvin Thompson also had a crack, with Cameron saying yesterday that "you could drive a 747 airbus through the policy in terms of protections for workers".

The unrest within the party room and the union movement ensured some uncomfortable moments for the Prime Minister in Question Time yesterday, but by this morning the government appeared to have finally aligned its talking points. Bill Shorten, the Minister for Employment and Workplace Relations, was on the ABC this morning telling Fran Kelly that "periodically there will not be enough … Australians to fill the job, and yet we still want the project to go ahead because that generates those jobs that will be employing Australians and we don’t want to miss the opportunities of the mining boom".

Ah, the mining boom. At heart, the migrant-worker debate is all about finding workers for difficult and dirty jobs deep in Australia’s resources sector. As we know from this year’s budget documents, the massive investment associated with the mining boom is not only directly driving economic growth in Western Australia and Queensland, but also spilling over in all sorts of indirect ways across the rest of the country. For instance, iron ore will be taxed as part of the Minerals Resource Rent Tax, so contributing to the bottom line of the federal budget and helping the government increase superannuation contributions.

Of course, all these projects are ultimately dependent on the ability of mining companies to sell that iron ore and gas on global markets. And that global demand is uncertain, given that the Chinese property boom may just be about to reverse. A Chinese economic downturn could cause real pain in Australia’s resources sector.

For now, though, the resources boom is powering ahead, and that means more mines and more workers. Given that, are these Enterprise Migration Agreements such a bad thing? On balance, I think the answer is no.

The idea that foreigners are taking Australian jobs is intuitively plausible and emotively powerful, but it doesn’t really reflect the facts of an industry crying out for skilled and semi-skilled workers. Will Australians losing their jobs in the manufacturing sector in our capital cities be able to move out to the Pilbara? Some will, but some can’t or won’t. Perhaps their kids are in school and they don’t want to move. Perhaps they don’t have the right skills. In any case, unemployment is still only 5 per cent, and in fields like mining services, it is lower even than that. So it looks as though there really aren’t enough qualified Australian workers to fill these positions.

Nor is the government opening the flood-gates to overseas migrant workers — at least not yet. This is the first EMA the government has signed, and EMA’s will only apply to big projects: those worth more than $2 billion with a peak workforce above 1500 workers. Macquarie University’s Chris Wright argues that EMA’s are reasonably balanced between the interests of big resources firms and Australian workers. The Roy Hill EMA "seems to be a rare example of a work visa policy containing the appropriate checks and balances to safeguard the interests of both employers and workers," he writes in The Conversation today.

There is one interest group that no-one seems to have considered in the current debate: migrant workers themselves. While no-one wants to see foreign workers exploited, the current regulations ensure that migrants must be paid the same wages as Australian citizens. Not to put too fine a point on it, this means good money. For a semi-skilled worker from a poorer country like Indonesia or Pakistan, a mining job on $130,000 a year is a fortune — enough money to provide for your children and to set up your family in middle-class comfort. Why should we be worried about migrants coming to Australia to enjoy such opportunities?

In fact, on a moral level, there’s little to be said for excluding foreigners from employment opportunities in our mines. Unlike the sad tendency for rich countries like Australia to suck doctors and medical specialists from poorer countries, paying semi-skilled workers good money is not only good for Australia: more importantly, it’s good for the workers themselves. Some will inevitably want to stay and build new lives for themselves and their families here, and that’s a good thing too — just as Australia benefited from previous generations of workers travelling here to work on the Snowy Mountains Scheme.

It would be especially disheartening if we allowed short-term anxieties about "jobs for Australians" encourage the sort of woolly thinking that Paul Howes has engaged with over the weekend. Australia is an immigrant nation, after all. If workers want to come here to work on projects that other Australians can’t or won’t, we should welcome them.

New Matilda

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