PERTH (miningweekly.com) - The mining industry has spoken out against recommendations made by a Parliamentary committee into fly-in, fly-out (Fifo) workforce practices, warning that these could have detrimental consequences to the mining industry.

The committee's inquiry led to the suggestion that Fifo practices could lead to the hollowing-out of established regional towns, and suggested a number of measures to provide incentives for Fifo workers to become residential workers.

The recommendations included further study into the economic impact of Fifo, funding allocations for communities that receive Fifo workers, and a review of the fringe benefit tax (FBT).

It was this last recommendation that had the mining industry in an uproar, with the Association of Mining and Exploration Companies (Amec) expressing its concern at the prospect of the removal of the (FBT) exemption currently provided to mining companies for Fifo and drive-in, drive-out (Dido) workers.

“The mining sector is currently faced with countless increasing production costs, and a change to the FBT exemption is likely to have serious consequences,” said Amec CEO Simon Bennison.

“Removal of the exemption will also make no difference to the issues identified in the report.

“It is crucial that government consider all the economic, financial and social ramifications when reviewing the recommendations from the Parliamentary inquiry,” he said.

Amec said the industry body and its members believed changes to the FBT exemption would affect the economics of several projects and cost-cutting initiatives would need to be implemented, which could result in further job losses in the future.

“Now is not the time to be adding any more costs onto industry,” Bennison added.

The Western Australian Chamber of Minerals and Energy (CME) also urged governments to be wary of implementing recommendations from the report.

CME CEO Reg Howard-Smith said the CME supported recommendations that called for further evidence-based research and allowed for a greater understanding of this important and growing work practice.

“With more than A$175-billion worth of resource projects either under consideration or being constructed, access to a skilled workforce, along with the high cost of doing business in Western Australia, are major challenges for the sector.

“Fifo is about providing choice for workers and in a competitive labour market, employee choice is paramount. Choice of what job they do, who they work for and, importantly, where they choose to live.”

Howard-Smith noted that Fifo and residential employment were complementary, not supplementary approaches in a total workforce management package.
 
He said recommendations that added to the cost of doing business should be discarded.

“Unfortunately, we are becoming a less attractive place to develop resources projects when compared with global resource-rich nations and investment may be driven to other, lower-cost regions because of additional layers of taxation and charges, which are continuing to drive up the cost of doing business.”

“Attraction and retention of employees would be severely impacted if companies attempted to force residential employment on their employees.

“Further, if Fifo was highly restricted or residential employment mandated, local communities and government would experience severe pressures on infrastructure and services. At the same time, valuable resource projects would not find a skilled local workforce and may not even proceed,” Howard-Smith said.