Part of Professionals Australia

Industry Plan Creates New Opportunities for Mining States

The Federal Government's $1 billion industry package creates new opportunities for Australia's mining states to do more for their local engineering industries.

Sunday, 17 February 2013
The plan includes $504.5 million to establish ten new regional innovation precincts including manufacturing precincts in South East Melbourne and Adelaide.
CEO of Professionals Australia Chris Walton said now that the Federal Government had made this funding available the mining states should quickly turn their states into genuine centres of engineering excellence to capitalise on the new opportunity.
“Western Australia and Queensland should now take advantage of this package to develop local engineering precincts to ensure local firms get their fair share of work,” Mr Walton said.
“Western Australia and Queensland in particular need to constantly find new ways to capitalise on the mining boom before it is over and this package gives new opportunities to turn their states into genuine international engineering centres of excellence.
“In 2009 we imported $98 million worth of engineering services more than we imported.  Today we import $637 million more.
“Given our natural resources, our outstanding educational and research institutions, and our talented local engineers we should be an exporter of engineering work but successive governments haven't been bold enough to give engineers a fair go.
“For too long large project developers have chosen to use foreign engineering suppliers instead of properly considering talented Australian engineers.

“Our mining and energy boom is a once-in-a-lifetime opportunity to turn thousands of engineering graduates into the engineering leaders of the future.”
The new policy also stipulates that for the first time projects worth more than $2 billion, which request tariff concessions on imported materials, will be required to create an Office of Australian Industry Capability in their global corporate or procurement headquarters to identify opportunities for Australian firms to take part in their global supply chains.
The plan also reduces the threshold for a major project to require an Industry Participation Plan from $2 billion of capital expenditure to just $500 million.
Government analysis suggests this package could deliver $1.6 billion per year in extra work for Australian industry.
However Mr Walton said unless the states strengthened their industry policies in light of this new package and invested strongly the Federal Government's policy would never reach its potential.
“All political parties in the mining states now need to come to the party and stop project proponents from actively blocking Australian engineering firms from winning the work,” Mr Walton said.

After working with Professionals Australia on the issue the WA Government has acknowledged that the behaviour of operators and projects proponents in the oil and gas industry ensures local world class engineering firms get little real chance to win work. 

“It is now essential the WA and Federal Governments work cooperatively to ensure Australia benefits from the resource boom through ongoing world-class design and services industries,” Mr Walton said. 

Mr Walton said the Federal Government would be quickly tested by Floating Liquid Natural Gas (FLNG) projects, where there was virtually no local content as the gas was not processed on land. 

“The poor outcomes for local content in projects such as Gorgon will look like grand successes compared to projects such a Shell's Prelude. It is firmly in the Federal governments  control to achieve better results for Australian local content,” Mr Walton said.

“The community is sick of the history of weak government policy on these issues, we now need governments to put more backbone into their policies. Project proponents and operators want a lot from Australia and governments need to use their negotiating power to give local world class firms a more level playing field. Currently the only opportunity local firms get is to waste time filling out tender forms which go nowhere.

“Companies like Chevron need to be pushed to do more than run propaganda campaigns.”

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