Labour and productivity: exploring alternative solutions

Abstract

A serious skills shortage and increasing wage rates with no apparent increase in productivity is facing Australia’s oil and gas industry. The measures announced in the 2011–12 Federal Budget on 10 May do not appear to address the skills shortage crisis and may affect the viability of some projects.This extended abstract proposes some solutions to alleviate the existing skills shortages facing offshore resource projects. It also discusses some of the structural inefficiencies in the Fair Work Act 2009 (Cth) that is contributing to these issues.Under the Regional Sponsored Migration Scheme, the Federal Budget included an increase of skilled migration from 10,000–16,000 places in 2011–12. This is in contrast to the calls from Western Australia’s resources industry suggesting about 33,000 workers will be needed by the end of this year. The major changes to Australian labour laws brought by the FW Act is said to have resulted in uncertainty about some projects.Evidence of the shift to a collective (enterprise) bargaining framework based on delivering productivity increases is not yet available. An enhanced role for union officials seems to have resulted in an increase in union power and union influence in enterprise bargaining. This may be a reason for wage blow-outs in the oil and gas industry.