Changing Community Dynamics – the impact of Fly-in Fly-out , Drive in Drive Out

Presentation to Local Government Chief Officers

Group 21st November 2013

Professor Fiona Haslam McKenzie

Background to the study …

• We embarked on this study because: • Understanding the impact of fly-in/fly-out is part of the Enduring

Community Value from Mining research program • We successfully bid on Commonwealth research funds • We received top-up funds and considerable inkind from an industry

partner (Rio Tinto) (Busselton component).

• The impact of fly-in/fly-out and host communities has been examined however the impact on source communities has not.

• ~ 1/3 of submissions to the House of Representatives Enquiry into fly-in/fly-out work arrangements were from source communities

• Most of the submissions were based on anecdotal information

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Research questions

• What are the socio-economic impacts of a fly-in/fly-out population on source communities?

• What are the economic and administrative implications of a FIFO population cohort for local government, government and non-government agencies, mining companies and local business communities? (Does a fly-in/fly-out population put undue pressure on services?

• the effects of a significant LDC population cohort on the wider community structures, networks and arrangements vital to individual and community wellbeing and social cohesiveness.

• What are the employee and communities benefits? • Could the benefits be enhanced, and if so what are the strategies?

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The case studies: Mandurah and Busselton

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- Shire Boundaries

Regional Boundary

Built Up Area

The economic impacts – individual level (1)

• High income is the most commonly cited incentive for entering LDC workforce.

• The mean annual income in the Busselton local government

area (LGA) is $43,665.

• Anecdotally the difference between working in an LDC position in mining or an equivalent local position in Busselton or Mandurah is approximately $40,000 pa.

• Salary structures and working conditions vary widely between oil and gas, and mining companies and contractors to mining.

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The economic impacts – individual level (2)

Busselton survey respondents: LDC and LDC spouse income distribution

0

5

10

15

20

25% GROSS WEEKLY PERSONAL INCOME PER WEEK

I currently work LDC in the mining/oil & gasindustryI have a spouse who currently works LDC in themining/oil & gas industry

The economic impacts – individual level (3)

• LDC enables many families to live where and how they want to live. • Survey and interview cohorts included individuals who where:

Living in the case study sites and moved to LDC because of new job opportunities and/or financial pressures:

in LDC who moved to the case study sites for lifestyle (direct flights from Busselton to Rio mines especially influential).

Some to Busselton from Mandurah ‘which had become “too busy”.

• Coastal lifestyle was important to 70%, rural lifestyle to 50%

The economic impacts – individual level (4)

Survey and interview cohorts in both case studies included individuals who had moved to LDC work because of financial pressures:

o contraction in local economy/ loss of job,

o recovery from financial set back (eg. post divorce),

o Supplementing income from, or funding the development of agricultural enterprise,

o were older and appreciated the opportunity to bolster their

superannuation or savings.

“Thanks to this job, I can look forward to a comfortable retirement in a place I only ever dreamed about. For the first time in our working lives, my [spouse] and I are not struggling”.

The economic impacts – individual level (Savings)

Busselton survey respondents: Household savings

88

60 60 60

12

40 40 40

0

10

20

30

40

50

60

70

80

90

100

25-34 35-44 45-54 55-64

%

Age groups

Regularly save a portion of your HOUSEHOLD income?

No Yes

The economic impacts – individual level (Wealth accumulation)

Busselton survey respondents: Change in wealth

31%

35%

25%

6%4%

0% 0%0%

5%

10%

15%

20%

25%

30%

35%

40%

increasedsignificantly

increasedsomewhat

little or nochange

decreasedsomewhat

decreasedsignificantly

I have nopersonalwealth

Other (pleasespecify)

Has the overall wealth of your HOUSEHOLD (savings, investments, property) changed in the past 5 years?

The economic impacts – individual level (debt level)

Busselton survey respondents: Debt level

65%

10%

23%

2% 0%0%

10%

20%

30%

40%

50%

60%

70%

increased no change decreased don't know no debt

Has you overall level of HOUSEHOLD debt (mortgage, loans, hire purchase, credit card) changed in the past 5 years?

The economic impacts – community level (Salaries by local government and postcode for a mining company cohort: Busselton area)

The economic impacts – community level (2)

• Airport fees incurred by mining companies flow direct to the local government authority (Busselton).

• Mining company sponsorship of community events and even infrastructure.

• LDC source communities gain directly from the higher incomes their commuters repatriate.

• Indirect multiplier effects: LDC money spent locally

bolsters local businesses and is likely to be re-spent in the local economy.

The economic impacts – community level (3)

• Economic leakage from both case study sites occurs due to:

• Expenditure outside of the local community • Choice and price • Overseas purchases and holidays • Internet purchases.

• Time and costs associated with travelling to airport or DIDO destination.

• High cost of housing and accommodation (mortgage repayments and

rental to non-resident property owners). • Savings and superannuation.

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Impacts on individual wellbeing: • The LDC workforce is diverse, as are the conditions of work. • Long distance commuting is a tough gig for both the LDC

worker and the family at home: o Loneliness/ sadness o Periodic separation/reunion - switching modes of engagement o Fatigue for both parties o Parenting

issues of consistency role models Accessibility

o Gendered roles o Balancing distinctive rhythms of LDC with main-steam rhythms

• Most individuals and families who make the choice work

through the challenges, although this is rarely easy.

Impacts on individual and family wellbeing: support

Sense of wellbeing is also influenced by quality, availability and accessibility of formal and informal support services and networks:

• LDC worker like everyone else need support at times.

• While not the primary cause where there is a propensity for personal and relationship or social engagement problems, the stresses particular to a LDC lifestyle tend to have a compounding effect.

• Services report that growth associated with LDC is contributing to growing demand on services/ but LDC usage is not routinely measured.

• The rhythms of an LDC lifestyle make it difficult to access existing services and associations designed around 9-5 /5 day working week.

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The social impacts … community cohesion, participation and resilience

• Social tensions- Evidence of a widening gap between ‘the haves’ and the ‘have nots’ in source communities.

• No definitive evidence re reported lack of engagement

in community life. Many LDC workers do volunteer in their home community using skills developed at their work. Others admit to being insular.

• Increasing FIFO population creates a potential community vulnerability to the resource sector market cycle – are communities prepared for that?

Key recommendations: Pressing need for companies to provide: • pre employment preparation for employee and spouse/families for

demands of LDC including basic personal financial management. • recognize role of spouse through tailored orientation, direct

communications concerning entitlements and support services • work with service providers to pilot flexible compatible services

• LDC workers and their families need to be fully aware of the personal and

community challenges of the lifestyle

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Key recommendations to local government sector: Long distance commuting: • will often bring new people to town, some of whom need support • local government to work with service providers to pilot flexible

compatible services • community organisations need to work collaboratively on initiatives to

strengthen ties across new ‘class’ divisions, integrate newcomers and foster informal as well as formal support networks.

• Develop strategies to minimize economic leakage. • Strategies to encourage community inclusiveness and sense of

community.

• Do not look a gift horse in the mouth – resources companies are businesses and corporate social responsibility only goes so far.

• The resources sector will not boom forever – how well equipped are you for the future contractions?

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Acknowledgements

• Sincere thanks go to:

• Co-researcher Dr Aileen Hoath • the many interviewees who volunteered their stories and

experiences of LDC. • The Cities of Busselton and Mandurah and the many agencies

throughout Western Australia which assisted us with data and interviews

• Rio Tinto Iron-ore and Newmont Asia Pacific • The Commonwealth Department of Infrastructure and

Regional Development • Co-operative Research Centre - Remote Economic

Participation • Our research assistants, Berina Causevic and Luciano Pavez

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For further information:

Professor Fiona Haslam McKenzie (Curtin Graduate School of Business) F.mckenzie@curtin.edu.au 0417 09 8880

Dr Aileen Hoath (Curtin Graduate School of Business) A.Hoath@curtin.edu.au 0439474269

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