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Minerals council refutes McKell Institute’s wage cutting findings

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The Minerals Council of Australia has refuted the McKell Institute’s claims that a billion dollars a year was being stripped from coal mining communities.

The damning report, released on Monday 2 May, found a staggering $989 million is lost annually from local economic activity.

It pinpointed aggressive wage cutting strategies as the primary reason after analysing the impact of companies’ widespread replacement of permanent jobs with lower-paid labour hire workers in five electorates, including two in this region.

Among the findings were the federal seats of Hunter and Paterson missing out on $235.85 million.

The account also contained a detailed study of how the labour hire employment model had systemically been used to reduce wages that would otherwise have circulated through coal mining communities.

But, Minerals Council of Australia CEO Tania Constable said the McKell Institute report was neither credible nor impartial.

“Disappointingly, there are a number of errors in it,” she explained.

“It mixes casual employment with labour hire and service contractors; implicitly assumes that all indirect workers are precariously employed (whereas service contractors negotiate their own enterprise agreements and usually with unions); relies on hypothetical average pay rates and shares of casual employment devised by the Mining & Energy Union; and selects a simplistic economic model that generates the desired result by assuming no adverse effects on investment, productivity or employment of extending the highest prevailing wage rates to labour hire workers and service contractors.

“Mining is providing highly-skilled, highly-paid and secure jobs across Australia.”

Australian Bureau of Statistics data, according to Ms Constable, shows:

  • Median weekly earnings of mining employees paid by a labour hire firm are approximately $300 more (or 13% higher) than the median weekly earnings of direct hire mining employees;
  • Mining employment has trebled from an average of 83,900 in 2002 to 264,700 in 2021;
  • 88% of mining workers are permanent and 96% are employed full-time;
  • Australian mining pays more on average than any other industry ($144,000 a year);
  • 99% of mining workers earn above-award wages and conditions;
  • Average weekly earnings in mining increased 25% between 2010-11 and 2020-21;
  • In 2021, 88% of mining workers were permanently employed, up from 84% in 2020;
  • In 2021, 93% of coal mining workers in Queensland and NSW were permanently employed, up from 87% in 2020; and
  • Over the past decade (2012-2021), the share of casual workers in mining across Australia has averaged 13%, compared to 24% for all industries.

“The mining industry successfully employs a range of agreement options to drive productivity and incomes,” she said.

“Companies tailor their employment arrangements to suit very different locations, ore bodies, production techniques, occupations and worker preferences.”

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