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News Media Releases Overseas firms reap rewards of WA boom
Overseas firms reap rewards of WA boom
Thursday, 14 October 2010 12:10

By Simone McGurk, UnionsWA Secretary.

That "the workshops will be full" could well end up being one of Premier Colin Barnett's poorer predictions about the resources boom.

Research show us that in the past three years more than $860 million in projects in the mining sector have been awarded to overseas companies. In the oil and gas industry that figure rises to $7.7 billion.

The workshops are full - the only problem for WA workers is that they are all in Asia. There is no point being great exporters of iron ore if we export our jobs at the same time.

The manufacturing industry is suffering in WA as workers move north and jobs and contracts disappear overseas.

However, it is in everybody's best interests to ensure that the resources boom in the north benefits the whole State and the best way to ensure that is to include as many industries as possible in "the greatest resources boom since the 19th century".

Previously, it has simply been an article of faith that roaring mines in the north would have the workshops along the Kwinana strip and elsewhere bursting at the seams. But that hasn't been the case. Nor has it been the case for WA engineers who are now finding that it easier to get work on WA projects by working for overseas firms.

Current legislation which sees that local firms only be "considered" when contracts are awarded simply isn't doing its job. We must make sure that WA resources ensure jobs for West Australians.

We can't simply wash our hands of the problem and say "that's the market for you". The future of our State demands a much stronger response.
Most countries know you must ensure that you draw as much benefit from our own resources as possible.

No one expects local firms to be able to do all the work on projects the size of Gorgon and Pluto but we must ensure that we are always working at capacity.

When we have empty workshops, an Australian Marine Centre being tragically under-used, large manufacturers reducing their metal fabrication capacity and billions of dollars of work going overseas, something is going wrong.

There are many great examples of countries who have implemented local content rules successfully - the US, Canada, Norway, even Nigeria has got in on the act.

When WA company Austal Ships won a contract in the US, they had to build the workshop to produce them in Alabama.

At home, Victoria and Queensland have strengthened their local industry policies with much success.

When independent MP Bob Katter called for some fairly extreme measures to make local manufacturing more internationally competitive, such as slashing interest rates to 0.5 per cent and driving the dollar down to US60¢, he was derided by many but the fact is that there are other solutions that don't follow such drastic measures.

The Victorians have shown a practical way forward through the Victorian Industry Participation Policy.

But the key is strong legislation. Multinationals have shown the ability to work with all sorts of policy from governments all over the world.

We shouldn't be fearful of putting up something which will set our local industry in good stead for the period of the boom and long after.

The framework already exists through State Agreement Acts, we now just need to ensure they reflect our local capabilities.

A benefit of the global financial crisis may well be that it has allowed us to step back and ponder the best way to maximise our State's benefits from the boom.

A strong manufacturing industry brings with it a flexible skilled workforce and this flexibility is crucial when the boom ends.

We miss a great opportunity if we do not allow this boom to provide opportunities for our children to be trained to world best practice via apprenticeships and other trade training schemes.

A decline in apprenticeships creates a vicious cycle. A lack of apprenticeships causes businesses to look overseas or use foreign labour, which in turn leads to a lack of demand for local apprentices and around and around we go. Just look at how the decline of the Midland rail yard led to a fall in apprentices across the industry.

We should also be encouraging more to be done to turn Perth into a world leader of engineering and design.

By the end of the boom, our city should be known internationally as a global hub in engineering, not merely a transit lounge for multinational corporations on their global tour of resources hot spots.

Recently, Mr Barnett was in Asia spruiking our State's wares and saying he was "hopeful" some overseas operations would set up manufacturing bases here. Of course, they aren't doing that now, and many projects are already under way.
We would hope that the Government would introduce legislation to enforce it rather than simply adopting a faith-based approach.

They clearly think it is a good idea, so why not back up the talk with some strong policy.

Mr Barnett seems to revel in his role of standing up to the Federal Government in Canberra. Will he show as much courage in the face of the multinationals?

This article first appeared in The West Australian.


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