THE peak business body has demanded the government immediately amend its main environmental law and the Fair Work Act to boost Australia’s competitiveness before further resources projects fall victim to a high-cost, low-productivity business climate.
Business Council of Australia chief executive Jennifer Westacott said steps had to be taken to lock in Australia’s investment pipeline, including allowing Work Choices-era, employer-only agreements on greenfield projects so work could start sooner as unions would not be involved in talks on pay and conditions.
Ms Westacott said the government should also reform the federal Environment Protection and Biodiversity Conservation Act to give states the power to assess and approve projects, and the states should fast-track plans to make their major development approvals more efficient.
The calls came as business leaders lined up to warn that iron ore, coal, gas and oil projects were becoming more expensive to deliver than in rival resource nations.
Former Queensland Labor treasurer Keith De Lacy, a former Macarthur Coal chairman, warned that Australia risked “severely wounding the goose” and this would hit tax revenues.
Calling the situation a “perfect storm” of falling commodities prices and rising project costs, he said in the past five years the capital cost of setting up new coalmines had more than doubled. “Australia has gone from being one of the cheapest places for natural resources to much higher than the rest of the world,” he said.
Rio Tinto chief executive Tom Albanese also warned about rising capital costs and the potential impact on investment decisions. “We are going to have to make more tough decisions, invest in fewer projects; we are going to have to defer other things, we are going to have to stage projects,” he said at a forum in Perth.
The comment was interpreted as a veiled reference to Rio’s examination of the viability of its $US2 billion ($1.9bn) expansion of the Mount Pleasant thermal coalmine in the NSW Hunter Valley, where rising costs have been a concern.
Minerals Council of Australia chief executive Mitch Hooke said the “free kick” from higher commodities prices was over and price declines were more likely than increases, so miners needed to deliver growing volumes.