Central Queensland Mine
Central Queensland Mine

Mine wage-cutting stripping millions from Central Queensland

THE replacement of permanent mining jobs with outsourced labour hire has stripped hundreds of millions of dollars from the Mackay-Isaac-Whitsunday economy.

The bombshell 'Wage-cutting strategies in the Mining Industry' report, from the independent McKell Institute, found $245.79 million is being lost from the Central Queensland economy annually due to lower wages paid to mining contractors.

Federal Labor Leader Anthony Albanese will attend the launch of the report in Mackay today.

The document sought to put a figure on the lost wages and flow-on losses to communities from wage cuts being imposed on casual labour hire mine workers and those employed by BHP's Operations Services.

The report focused on three major coal mining regions: Mackay-Isaac-Whitsunday, Central Queensland and the Hunter Valley.

Combining these three regions, it found the direct and indirect economic impacts of lower wages paid to labour hire workers was about $825 million a year.

Chad Stokes, a WorkPac employee at BHP's Blackwater mine, has been mostly employed casually in the industry for the past 10 years.

The cost of labour hire to mining regions. Picture: The McKell Institute.
The cost of labour hire to mining regions. Picture: The McKell Institute.

"Labour hire are the only jobs available in the industry at the moment, the mining companies don't employ anyone directly," Mr Stokes said.

"I have a wife and three kids but being casual I have been unable to buy a house because the bank doesn't want to lend money when you're a casual, even if you have a decent deposit."

Despite recently securing a permanent job, he said he was still paid much less than direct BHP employees, even though they did the same work.

The McKell report explored two methods of wage cutting - the first involves mine operators outsourcing permanent jobs to labour hire suppliers and the second refers to the model BHP deploys.

The CFMEU has previously claimed how the mining giant's subsidiary, Operations Services, employs workers permanently on wages and conditions below those covered in the union agreement.

Chad Stokes, based in Rockhampton, has been employed by WorkPac at BHP's Blackwater mine since April 2014. Picture: supplied
Chad Stokes, based in Rockhampton, has been employed by WorkPac at BHP's Blackwater mine since April 2014. Picture: supplied

But BHP has defended its subsidiary, with a spokesman describing it as a team of "directly employed, permanent BHP workers on market competitive rates".

"Operations Services is giving people the opportunity to apply for permanent roles with BHP, which offer job stability, a competitive salary, performance related bonuses, flexible work options and permanent entitlements including paid parental, sick and annual leave, and access to the company share program," the spokesman said.

The McKell report estimated casual labour hire mine workers were typically paid 30 to 40 per cent less than permanent mine workers doing the same jobs.

"As well as directly hurting the affected workers, the report noted the flow-on impacts of mining casualisation had reduced the social and economic benefits of mining to the regions.

"Mining companies play an important role in regional Australia," it said.

"However, it is to the detriment of regional Australia … when major resource firms remove themselves from the role of employer at their mines by over-utilising labour hire and other wage-cutting strategies."

CFMEU Mining and Energy general president Tony Maher said because there were many more miners employed outside the regions explored in the report, the total economic loss should be closer to $1 billion a year.

"Now that the real cost of this practice has been laid bare, we should all be demanding change," Mr Maher said.


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