Major energy companies including Shell and QGC are calling for industrial relations reform, claiming Australia is set to lose investment dollars to low cost nations like Canada and Mozambique.
In submissions to the government’s energy white paper, the oil and gas producers say increasing costs, lagging productivity and high wages could hamstring major energy projects into the future.
QGC said that while Australians were lucky to be paid some of world’s highest wages, they came at a cost to the country’s competitiveness, The Australian reported.
"High wages are likely to convince overseas investors to develop projects in lower-wage economies, such as Canada and Mozambique," the company said.
"Whilst high wages may be unavoidable, we can become more competitive by increasing our productivity – which comes, in part, from a highly skilled workforce available."
QGC said a mix of solutions were required to rebalance the labour market including more university graduates, extra training for tradespeople and access to skilled workers via 447 visas.
Shell also flagged productivity issues as a major bugbear, hitting out at what it calls “the most regulated labour market in the world”.
It claims the current Fair Work Act "institutionalises inefficiency and must be reviewed".
“A review of any random selection of industry awards and agreements will identify a multiplicity of outdated work practices and obligations and inconsistencies that frustrate the flexible utilisation of labour,” the energy giant said.
"As an example, if we take an industry standard of 38 paid hours of work per week, a combination of regulations and unreasonable workplace restrictions ensures the productive utilisation of the paid available hours is not achievable."
The submissions come a week after federal government introduced changes to the Fair Work Act aimed at watering down the power of unions delaying green field resource projects.
It is also looking to change laws governing right of entry, transfer of business and individual flexibility arrangements.
While it is unlikely the laws will pass before June when the new Senate comes into power, the submissions from energy majors is set to add more pressure for change.
Last year Shell deferred a decision on the new $10 billion Arrow Energy LNG project in Queensland as it balked at Australia’s high development costs.
Shell reportedly told its Arrow counterparts in that the proposed plant was underperforming compared to other investment opportunities.
Speaking at an energy conference in November, Shell's project and technology director Matthias Bichsel said that with a growing number of newly discovered oil and gas reserves being tapped in lower cost countries like the US and east Africa, Australia needed to address a number of issues to ensure it remained competitive on the global stage.
"We heard from a bunch of ambassadors today and one said that the cost to do a government tender here can be three times as high as the rest of the world," he said.
Last year the energy industry estimated $150 billion worth of investment in Australia could be lost if the high cost of building major projects was not fixed within eighteen months.