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Abbott needs to step up on IR: Reith
Workers at a North West Shelf project.

The State’s former attorney-general Christian Porter has warned half of planned resource projects could be delayed or scrapped due to wage blow-outs.

Mr Porter, now the Liberal candidate for the federal seat of Pearce, said today that 50 per cent of the $270 billion of resources projects either under construction or expected to be developed in WA may not proceed.

Iron ore companies could afford to pay high wages while the commodity sold for $US180 a tonne but not after the price tanked recently to about $US90/t, he told a gathering of the conservative HR Nicholls society.

Competition among resources companies to lure workers with big pay packets had sent wages spiralling, but this could not continue, Mr Porter said.

He said the problems were linked to the Fair Work Australia act greenfields "regime".

"If we can turn half of that $270 billion worth of projects that are now anticipated or projected into actual projects, we lock in a generation’s wealth for all Australians,” he said.

"And that is now in serious jeopardy because we are basically in a perfect storm of price flattening and, at the same time, we’ve (the Federal Government) allowed over the last four years outrageous practices to develop in industrial relations in Western Australia."

He said maritime officers working on the North West Shelf gas precinct were earning $250,000 a year and the push was on to match that onshore in the iron ore sector.

"Indeed, a Dutch offshore dredging company recently agreed to a 40 per cent pay increase for workers, which will see some crew paid at an annual rate of $356,000 for what are essentially odd jobs," he said.

"The big problem is, that was the MUA’s (Maritime Union of Australia’s) influence under the Fair Work Act."

Earlier, Howard-era minister Peter Reith told the meeting that the Liberal Party has been far too quiet on industrial relations issues such as unfair dismissal.

The former workplace relations minister urged Opposition Leader Tony Abbott to unveil the party's IR policy soon so there were no surprises if it won power at the next federal election.

"There's no time like the present," he told the breakfast meeting.

"I don't want to see any let up in the momentum for reform."

He blamed a surge in industrial action to its highest level in eight years to Fair Work Act changes, and warned strikes were going to keep rising.

Mr Reith - who along with John Hewson developed the Coalition's Fightback! policy that helped lose the 1993 election - called for the reintroduction of individual workplace agreements, saying they would improve flexibility and productivity.

The mere threat of such a policy was "enough to bring militant unionists under control", he added.

Mr Reith also said the Liberal Party needed to have the strength to talk about unfair dismissal reform.

"You'll never win a debate unless you're prepared to stand up and argue the proposition.

"We should be doing that today and not only for the economics of it, but for the politics of it because the fact is that small business are the free enterprise people in this country and they look to the Coalition to support them."

Mr Reith also said compulsory arbitration needed to be scrapped.

Specifically, there was concern about a recommendation stemming from a recent review of the Fair Work Act, whereby Fair Work Australia would arbitrate employment terms and conditions for new resources projects when an employer and unions could not reach a reasonable agreement.

"I would like the Coalition to come out now and say 'we will not have compulsory arbitration'.

"If you want to have better workplace relations, then you have to give people at work - both employers and employees - the responsibility to manage their own affairs."

Mr Porter has also backed Gina Rinehart’s call for a special economic zone in the nation’s north.

He said a zonal tax break had proved successful in attracting workers to WA’s resources-rich north when it was introduced in 1945.

The scheme offered workers a tax rebate if they moved to towns like Karratha and Port Hedland.

But it hadn’t been indexed, so the rebate had shrunk to a tiny amount, Mr Porter said.

“It would cost more to administer than the actual rebate that’s given out to workers,” Mr Porter said.

“And perhaps even more bizarrely, if you are a fly-in, fly-out worker, you get the rebate.

“I’d have scrapped the zone rebate or fixed it.”