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LABOUR COSTS

The Australian mining industry paid $9.6b in wages and salaries in 2005-06, an increase of 26% (or $2.0b) on the previous year. Apart from Silver-lead-zinc ore mining, in which wages and salaries declined slightly, all industries for which data are shown incurred higher wages and salaries costs than in 2004-05. The 'core' mining industries of Coal mining, Oil and gas extraction and Metal ore mining recorded a 23% ($1.2b) increase in wages and salaries overall.

In percentage terms, the largest increases in wages and salaries occurred in Services to mining (up 40%), Copper ore mining and Other metal ore mining (35% each) and Coal mining (up 32%).

At the industry subdivision level, 28% of the value of wages and salaries for total mining in 2005-06 were paid in Coal mining, 11% in Oil and gas extraction, 29% in Metal ore mining, 7% in Other mining, and 26% in Services to mining.

The estimate of wages and salaries per person employed increased to $85,400 in 2005-06, up from $81,700 in 2004-05.

It should be noted that employment is measured at a point in time, i.e. end of June, whereas wages and salaries relate to a twelve month period. In times of significant change in the performance of an industry, as is the case in Mining in 2005-06, changes in wages and salaries may not be as great as changes in employment. This will be exacerbated by the effect of those businesses (refer paragraphs 22 and 23 of the Explanatory Notes) that report on a December year end. Their employment will be reported as at June 2006, whereas wages and salaries will be in respect of the twelve months ended December 2005.

In 2005-06 selected labour costs for total mining were $10.7b, 77% more than contract mining expenses ($6.0b). Contract mining expenses exceeded selected labour costs in Iron ore mining (by 45%) and Other metal ore mining (by 21%). For the mining industry, about 90% of the value of selected labour costs is represented by wages and salaries. The value of employer contributions to superannuation rose by 23% in 2005-06, to $846m.