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Edit: Construction long service leave levy reduced

Editorial
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Resource companies will no longer be levied for long service leave in relation to operational mining work, thanks to changes made by the Newman Government.

The Qleave portable long service leave and construction skills Queensland training levies will no longer need to be paid by companies running resource projects, or any work defined as resources operational work.

Mining construction projects will still be leviable, and workers will still be entitled to portable leave.

There has also been a major reduction to the potable long service leave levy, from 0.3 per cent to 0.25 per cent charged prior to the start of construction projects.

In addition, the minimum levy threshold has increased from $80,000 to $150,000.

Changes to the Qleave arrangements were the result of a review commissioned jointly by QLeave and the Queensland Resources Council (QRC).

Qleave general manager Graham Wilson said that all major construction work is still leviable, and that some "grey areas" were identified in the review carried out with QRC.

"The Queensland Resources Council were complaining that there were some grey areas where we were levying what they considered to be operational resources work... so we sought better definitions for that work," Wilson said.

Wilson said the reduction in the levy rate combined with removal of several definitions of leviable work will result in substantial savings for resources projects.

Across the board, projects will only pay half the standard rate, 0.125 per cent, for value in excess of $1 billion, no levy at all for project value in excess of $5 billion, which will result in millions worth of savings to construction companies.

Definitions laid out by Qleave for leviable construction work still include:

  • Construction of mining camps
  • Construction and assembly of new draglines on mine sites
  • Shutdowns on fixed plant that take longer than 30 days
  • Above-ground conveyer construction work
  • Construction of quarry infrastructure

However, a number of other forms of work have been defined as resource operations work, and as such workers will not be able to take accrued long service leave with them if they leave a company which employed them for the purposes of:

  • Labour hire for extraction
  • Earthmoving and haulage
  • Underground conveyer construction work
  • Supply and construction of heavy mining machinery
  • Pit development
  • Routine maintenance on fixed facilities
  • Shutdowns on fixed plant that take less than 30 days

QRC chief executive Michael Roche said the review showed the Qleave levy on resources projects had “gone beyond the original intent of the act, which was to provide a system of portable long service leave for the highly transient building and construction industry workers”.

“An unintended consequence was for routine mining and gas industry operational activities to be captured by the levy arrangements,” he said.

“Application of the levy to total project costs also meant that the highly capital intensive resources sector projects had been heavily subsidising less capital intensive parts of building and construction.

“The changes will provide significant financial relief to the resources sector in both operational and construction phases at a time when the sector needs to reduce costs to stay in business.”

Clarification: The earlier headline was based on a misunderstanding of communications between Australian Mining and source. The article has been corrected.

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