Home Articles Despite spectre of big tax, mining goes boom with jobs

Despite spectre of big tax, mining goes boom with jobs

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We suspect the mining industry doth protest too much.

Six months ago, it was up in arms over the government’s tax on profits, claiming that the measures would undermine confidence and inhibit industry investment.

This month, the Advantage Job Index for August found mining and engineering outperformed all other sectors, recording a 30 percent increase in new job advertisements over the past six months.

“Since the Henry Tax Review recommendations were released in January, miners have not curbed their hiring activities in anticipation of a tax on profits,”  said Robert Olivier, director of global market intelligence for Advantage Resourcing. “In fact, they have done quite the opposite. They’ve hit the employment button hard to meet surging global demand.”

Olivier said the mining industry typically hires contractors rather than permanent employees, so they have more flexibility to match labour demand with project wins, without the additional costs and responsibilities of full-time employees. He said the bump in jobs is consistent with recent trade data that shows the mining boom is in full swing.

“Any suggestion that a mining tax could bring the sector undone when all the indicators confirm the sector is booming seems a bit self-serving to me,” Mr Olivier said.

Under the government’s proposal, the 40 percent “super profits” tax would take effect in July 2012. Some financial observers say the tax would thin out mining mergers and acquisitions. And there’s always the question of whether the tax reforms will survive Canberra’s shifting landscape.

Nationally the Advantage Job Index found jobs were up by 2.8 percent from the previous month, with the legal profession being the standout performer at 9.5 percent.

The index indicated that the hospitality and tourism sector expects a good season, with job numbers up 7.2 percent, albeit in the temporary and casual categories.

Olivier said the strong number in the legal profession is a good indicator that businesses are more confident of a strengthening economy.

“As we saw during the GFC, when the economy is performing poorly, law firms can be ruthless in culling employee numbers as a cost-cutting strategy rather than adopting employee retention strategies such as flexible working hours and pay freezes. By the same token, as the economy improves they quickly respond with an increase in employment to meet increased demand.”

Olivier said the August Advantage Job index indicates employers are over Canberra’s political paralysis and much focused on to getting back to business.

“But nor are they taking any chances,” he said. “Yes, they are hiring, but they’re hedging their bets on the final outcome of the election, favouring temporary (5.2 percent) over full-time (2.2 percent) appointments.

“No doubt they will firm up their recruitment strategies when then there is a definite outcome in Canberra.”

Image by Tamsin Slater

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