A Federal Parliamentary Inquiry Report on “FIFO” workers in the mining sector has described the practice as a “cancer” on our country.
The Regional Australia Committee found that an influx of FIFO workers into the towns has put local services under pressure, raised house prices and yet did not greatly benefit the economy as the mining workers took their spending power with them when they flew back out.
The practice of temporary workers was threatening to “hollow out” the future of country towns, said independent MP Tony Windsor who chaired the committee which handed down its report.
There were 14 suggestions to the mining industry and 21 recommendations to the Federal Government in the report. Mining and resources representatives have warned that some of the recommendations could have devastating effects on business. One of the recommendations to the Federal Government includes reviewing the fringe benefits tax arrangements for the FIFO workers. Changes to the FBT exemption will affect the economics of many projects and funding, which could result in further job losses.
Chamber of Minerals and Energy of WA Chief Executive Reg Howard-Smith stated that politicians have to be careful that the recommendations does not increase the cost of doing business, especially given the already high cost of doing business in Western Australia. Mr Reg Howard-Smith further stated that Australia is becoming a less attractive place to develop resources compared to other global resource rich nations because of additional layers of taxation and charges imposed on companies which continue to drive up cost for doing business.
Also, if companies attempted to force residential employment on their employees, attracting and retention of employees would be severely impacted. Mr Howard-Smith said that FIFO was a choice for workers and helped keep the labour market competitive.
It was stated by Premier of WA Colin Barnett that because there would always be mines in isolated locations, FIFO would always be a part of the WA workforce.
National President of the Australian Manufacturing Workers Union, Andrew Dettmer said towns like Gladstone in Queensland were struggling under FIFO practices. He stated that Gladstone resembled a ghost town after hours because due to skyrocketing house prices, the locals were forced to live 40km away and drive in to work every day. Scrapping the FBT exemptions would remove incentives for companies to use FIFO workers and encourage local hiring. There was also a high incidence of separation and family breakdown for FIFO workers due to the nature of their rosters which put pressure on their health and home life.
However, the Report should be treated with a deal of scepticism states Minerals Council of Australia, Chief Executive Mitch Hooke who opposes any changes to the tax treatment of FIFO. He said that mining and FIFO boosts incomes, attracts families and reduces unemployment and not hollows out the regions in which it operates.
The Chief Executive further cited a KPMG study which showed that the population of Australia’s mining regions had grown at 1.5 percent per year in the five years to 2011, compared to 0.8 percent for regional Australia which suggests that some workers were moving to the regions permanently.
Chief Executive of Australian Mines and Metals Association, Steve Knott said that FIFO and drive-in, drive-out working arrangements were as much driven by employee lifestyle choices as by resource companies’ operational requirements, and also agreed that labour mobility was increasingly important for Australia’s resource industry to compete on a global scale.
Assistant National Secretary for Communications Electrical Plumbing Union, Allen Hicks said although the lives of FIFO workers and their families were highly disrupted and essential during the labour-intensive construction phase, a better balance needed to be struck.