Mr MILLS - 2005-08-18
As you are aware, the work on the gas plant at Wickham Point is nearing completion. The first notices of cessation of employment have already been received by some of the workers there. Soon, there will be 1700 fewer jobs in Darwin than there are now. What do you predict the impacts will be on the local economy when this occurs? What programs do you have in place to soften the obvious effects of this situation?
ANSWER
Madam Speaker, I thank the member for Blain for his question; it is a topical one. I was there some weeks ago when the construction was right at peak and there were 2400 workers - of which 47% have been sourced locally from within the Northern Territory. That is a remarkable result if you consider the first estimates from ConocoPhillips and Bechtel were that we might get 25%, at best 30%, local content in that project. That 47% of 2400 at the peak stands testament to the skills present in the Northern Territory that they were able to source that many locally.
Interestingly, within a day or two of that being on the airwaves, the Territory Construction Association was roundly sounding off, saying: ‘Yes, they have stolen all our workers!’. Well, it seemed to me it was a bit hard to win either way because, when we came to government in 2001, there simply were not jobs at all for the construction industry. Of course, that was a much greater concern to this government than not having enough. It is a problem not having enough and having a skills shortage. However, in an economic sense, it is a much healthier position to be in than not having the jobs and having highly-skilled workers sitting around with nothing to do, which was the situation throughout 2001.
What will happen? We recognised the problem as far back as November 2001 with the mini-budget, when we then set work on a record capital works infrastructure program. We have exceeded that record set in November 2001 at subsequent budget dates 2002-03, 2003-04, 2004-05 and, again, in 2005-06. However, more telling than simply putting out record infrastructure budgets to keep the place buzzing is the amount of cash that this government puts up against its program. This financial year it stands at 65%, in stark contrast, of course, to our predecessors, who could not cash the revote of the work not started the year before, and did not have enough cash to catch up with that work, let alone the new program that they stood and proudly delivered at each subsequent budget announcement.
There will be a transfer of some of those employees to the G3 project at Alcan. There is no doubt that there are similar skill sets in the engineering and construction work required on both plants. Watching the early stages of the ConocoPhillips plant, it struck me that it was very similar along the lines of the bauxite refinery at Alcan in its early days of construction, albeit very different plants. To the untrained eye of the mug observer such as myself, they are highly complex, sophisticated plants coming off a set of plans into reality. It is a wonderful thing to see. There will be a transfer across to G3. There already has been and there will continue to be. Of course, the waterfront development will take and keep elements of the construction and engineering industry busy in their own right for the next decade.
As I said, the record capital works spend will keep a good proportion of the construction work force we have built up in the Northern Territory here. That is not to say we will not lose some interstate to the projects in Queensland and north-west Western Australia. That is the way of Australia; these people follow the latest projects. If it is in an area they have not been to, it is offering better wages, the conditions are better, they want to go and see that place, or they want to work for that particular company - there are any number of reasons why workers may seek those opportunities.
In terms of the immediate impact, yes, it will wind down. They expect construction to be complete by end of year, comprehensive testing of the plant over the first quarter next year, and they are still on track for the first shipment around April/May 2006. It has been a tremendous project, well delivered by the construction force they have. We recognise we will lose some of them. Hopefully, many will stay. They will have grown to live in and love the Territory lifestyle as we do …
Ms CARNEY: A point of order, Madam Speaker! This is an incredibly long answer, and I ask that the Treasurer to contain his answer to the question, briefly.
Madam SPEAKER: The minister has finished his answer.
ANSWER
Madam Speaker, I thank the member for Blain for his question; it is a topical one. I was there some weeks ago when the construction was right at peak and there were 2400 workers - of which 47% have been sourced locally from within the Northern Territory. That is a remarkable result if you consider the first estimates from ConocoPhillips and Bechtel were that we might get 25%, at best 30%, local content in that project. That 47% of 2400 at the peak stands testament to the skills present in the Northern Territory that they were able to source that many locally.
Interestingly, within a day or two of that being on the airwaves, the Territory Construction Association was roundly sounding off, saying: ‘Yes, they have stolen all our workers!’. Well, it seemed to me it was a bit hard to win either way because, when we came to government in 2001, there simply were not jobs at all for the construction industry. Of course, that was a much greater concern to this government than not having enough. It is a problem not having enough and having a skills shortage. However, in an economic sense, it is a much healthier position to be in than not having the jobs and having highly-skilled workers sitting around with nothing to do, which was the situation throughout 2001.
What will happen? We recognised the problem as far back as November 2001 with the mini-budget, when we then set work on a record capital works infrastructure program. We have exceeded that record set in November 2001 at subsequent budget dates 2002-03, 2003-04, 2004-05 and, again, in 2005-06. However, more telling than simply putting out record infrastructure budgets to keep the place buzzing is the amount of cash that this government puts up against its program. This financial year it stands at 65%, in stark contrast, of course, to our predecessors, who could not cash the revote of the work not started the year before, and did not have enough cash to catch up with that work, let alone the new program that they stood and proudly delivered at each subsequent budget announcement.
There will be a transfer of some of those employees to the G3 project at Alcan. There is no doubt that there are similar skill sets in the engineering and construction work required on both plants. Watching the early stages of the ConocoPhillips plant, it struck me that it was very similar along the lines of the bauxite refinery at Alcan in its early days of construction, albeit very different plants. To the untrained eye of the mug observer such as myself, they are highly complex, sophisticated plants coming off a set of plans into reality. It is a wonderful thing to see. There will be a transfer across to G3. There already has been and there will continue to be. Of course, the waterfront development will take and keep elements of the construction and engineering industry busy in their own right for the next decade.
As I said, the record capital works spend will keep a good proportion of the construction work force we have built up in the Northern Territory here. That is not to say we will not lose some interstate to the projects in Queensland and north-west Western Australia. That is the way of Australia; these people follow the latest projects. If it is in an area they have not been to, it is offering better wages, the conditions are better, they want to go and see that place, or they want to work for that particular company - there are any number of reasons why workers may seek those opportunities.
In terms of the immediate impact, yes, it will wind down. They expect construction to be complete by end of year, comprehensive testing of the plant over the first quarter next year, and they are still on track for the first shipment around April/May 2006. It has been a tremendous project, well delivered by the construction force they have. We recognise we will lose some of them. Hopefully, many will stay. They will have grown to live in and love the Territory lifestyle as we do …
Ms CARNEY: A point of order, Madam Speaker! This is an incredibly long answer, and I ask that the Treasurer to contain his answer to the question, briefly.
Madam SPEAKER: The minister has finished his answer.
Last updated: 09 Aug 2016