Australian resource sectors must stay competitive
Posted : Wednesday, October 31, 2012
With demand from China flattening, Australia's resource sectors
need to stay competitive with skills and taxation reform,
Queensland Resources Council, CEO, Michael Roche
has told a CEDA forum in Brisbane.
At the forum, on the outlook for the resources industry and
factors critical for sustaining advantage, he emphasised Australia
doesn't have a God-given right to resources markets in Asia.
We need to get serious about things not covered in the
Government's Asian Century White Paper, and more attention needs to
be paid to skills reform and taxation reform, he said.
The resources sector contributes vastly to the Queensland
economy accounting for $1 in every $5 and is responsible for one in
eight jobs, he said.
The resource and energy sector is no stranger to fluctuating
cycles of change and uncertainty.
Despite the rising cost of doing business domestically and
falling global commodity prices, the sector remains a critical
contributor to Australia's economic development.
The industry's focus is now on driving productivity and
innovation improvements, as well as ensuring the regulatory
environment is right in order to remain globally competitive.
Mr Roche said the industry outlook for the resources sector was
downbeat, due to increasing costs and commodities prices.
The adversarial construction of our industrial relations system
is a major barrier to productivity growth, said Australian
Coal Association, CEO, Dr Nikki Williams.
"Chronic skills shortages such as what we face in Australia
combined with sustained and high demand for product has created an
environment where unions have the capacity to flex industrial
muscle," she said.
"This has extended beyond payment conditions into matters of
managerial control of who to employ and how to invest."
Dr Williams said the Fair Work legislation doesn't enhance or
promote productive working relationships at an enterprise level,
and allowed unions to strike leading to sky rocketing wages and
She emphasised Australia must do better on industrial relations,
adjust within the economy and enter a new phase in our relationship
with Asia that fosters innovation, and promotes best practices to
allow employees and employers to negotiate terms that underpin the
sustainability of business and shop floor harmony.
She told attendees that in Australia there is an inefficient
level of regulation and a cumbersome project approval process.
"Each year the completion date of the average thermal coal
project is delayed by a further three to four months, with the
average (delay) now at 3.1 years compared to 1.8 years for rest of
the world," she said.
Another barrier to productivity growth is uncertainty in
taxation policy with coal royalties soaring from $2 billion in
2006-07 to $6.3 billion in 2012-13, she said.
The cost of coal mining is escalating and the industry is facing
a number of challenges such as vanishing margins and an
unsustainable cost base. However, demand remains strong, Dr
Although coal will continue to be one of Australia's biggest
exports, she warned an honest analysis of growth and a mature
debate about solutions is needed.
Futureye, Managing Director, Katherine
Teh-White said the resources industry needs to have both a
global and national interest when operating their social
She said investors want to invest in organisations that have a
world class culture and approach to risk management.
Ms Teh-White said a sign organisations don't understand this can
be seen in the way they manage risk.
"Issues the public consider serious are not usually the ones
industry see as serious. This leads to risk controversy. If you
ignore the public, they then build momentum through the media and
politics," she said.
With greater demand for accountability from the public, heighted
by social media, she said activists against an issue can drive
societal risk and what you can manage is your reaction.
Ms Teh-White advised to take your fear out of the equation by
planning and thinking through the options, and taking
responsibility for the kind of future you manifest.
GVK Resources, Group Managing Director, Paul
Mulder said stakeholder relationships are fundamental and
critical to balancing and managing the needs of the community while
meeting regulatory requirements.
He said GVK, India's largest infrastructure organisation, chose
to invest in Australia because of its sound regulatory framework,
stable political system, transparent approval system and low
sovereign risk issues.
Mr Mulder said GVK will be constructing the first integrated
mine, rail and port supply chain in Australia for the coal
He said this project is positioned to weather all economic
climates and will be the best way to move coal in the most cost
Return to the news