The CFMEU has called for the removal of ‘tax perks’ for mining companies using FIFO workforces rather than hiring locals.
The miner’s union has urged the newly formed parliamentary committee for Northern Australia to recommend scrapping tax concessions associated with using FIFO workers.
The committee has been tasked to consider policies for developing the parts of Australia which lie north of the Tropic of Capricorn from the west the east coast, including the potential development of the region’s mineral and energy sectors.
CFMEU Mining and Energy general vice president Wayne McAndrew said the committee should recommend an overhaul of the tax system to end “preferential tax treatment for the use of FIFO over local workers”.
McAndrew said the growing use of wholly FIFO workforces was denying jobs to locals in regional areas and undermining the livelihood of some communities.
“There is a legitimate role for FIFO work arrangements in remote areas,” McAndrew said.
“But mining companies’ preference for FIFO at the expense of employing locals is seriously hurting regional areas.”
McAndrew claims the popularity of FIFO work practices is centred around tax breaks mining companies receive for flying workers in.
He said a report tabled in parliament last year outlining the damaging impacts a transient workforce can have on regional areas recommended restructuring the tax system to wind back Fringe Benefit Tax exemptions for the use of FIFO workers in established regional communities; and to create incentives for regional home ownership.
The “Cancer of the bush or salvation of our cities?” report made 21 recommendations to government including better resourcing communities under pressure from large FIFO workforces, removing tax benefits for companies using transient workforces, a study into the impact on communities and the development of a housing strategy.
Independent MP Tony Windsor wrote in the report's foreword that governments of all levels needed to recognise and act on the issues impacting regional communities who were hosting large FIFO workforces.
BHP is among the companies that have copped flak for the use of wholly FIFO workforces.
While the company says the system is required for flexibility, many have come out in criticism of the arrangement.
The CFMEU said it does not oppose FIFO but states where there is a community that can service a coal mine, locals should be given a choice.
CFMEU district president Stephen Smyth says moves by BHP to ban people from applying for work at the new Caval and Daunia mines if they live in the local area were examples where mining companies were “breaking the fabric of mining towns”.
“With any mining project, employees should be given a choice and not have FIFO thrust upon them as compulsory,” Smyth told Australian Mining.
LNP supports fight against 100 per cent FIFO
The Queensland Liberal National Party has recently lent majority support to back a move to end 100 per cent FIFO.
A motion by Rockhampton LNP members, to scrap clauses preventing people from applying for jobs at mines near their home town, was passed at the state LNP conference last weekend.
Capricornia MP Michelle Landry said the move met overwhelming support within the party.
“There was about 98 per cent support in the room,” she said.
“The premier was not present but the deputy was… he didn’t speak against the issue.
“It's plain common sense and it was pleasing to see that the member's views were heard and passed,” she said.
Landry said FIFO camps mean little money is being spent in local communities, and that some businesses in mining towns are struggling to survive as FIFO workers, who spend all of their time on site at camps, fail to spend money in the local community.
Taking tax breaks from the workers
However, Ms Landry has also commented on the Parliamentary Standing Committee on the future development of Northern Australia, which held hearings with Treasury and Australian Taxation Office officials to examine the remote area Zone Tax Offset available to people who work in remote areas, including FIFO workers.
“We want sustainable local communities and people who choose to live there should benefit from such tax arrangements, not people who 'jet' to work and contribute nothing to the local economy,” she said.
The remote area Zone Tax Offset is only available to workers who have spent 183 days in a single year working in a remote location, regardless of their home address.
Australian Mining asked Ms Landry whether she believed that people ought to begrudge the $1173 tax break for people who spend their working life in remote areas for more than 183 days a year.
“If you get that zonal tax break you should have to live in the town,” she said.
“It’s not their home address.”
Landry indicated that she was aware that FIFO workers who do not live in a camp often have to cover the expense of maintaining two addresses, one at home, and a rental where they work.