The Construction, Forestry, Mining and Energy Union said on Friday that the Liberal-National government's attitude to the Windsor Report revealed it did not appreciate the scale of the damage caused by the growing insistence of big resource companies using itinerant labour over local workforces and the damage being done to local businesses by companies refusing to source their goods and services at competitive rates.

CFMEU said situations, such as that seen in Queensland's coal fields, where the BHP Billiton-Mitsubishi Alliance requires that workers not live close to the mine where they work, are untenable.

Near Moranbah, in Queensland's coal and CSG rich Bowen Basin, two of the newest mines -Caval Ridge and Daunia - have 100% FIFO workforce.

That regime was instituted during the boom, and the companies have no intention of winding their special dispensation back despite mine closures that have freed up a local workforce.

Key employer groups have, perhaps not surprisingly, backed the government's decision to take a hands-off role when it comes to regional communities and FIFO operations.

The Minerals Council of Australia called the government's response "prudent", the Queensland Resources Council said it was "considered and reasonable", while the Association of Mining and Exploration Companies said it was "pleased" with the decision to leave FIFO arrangements untouched.

The Windsor Report, or the House of Representatives standing committee on regional Australia report: cancer of the bush or salvation of our cities? Fly-in, fly-out and drive-in, drive-out workforce practices in regional Australia report, as it is more properly known, was delivered in 2013, and the government has now says it will ignore most of the recommendations.

Infrastructure Minister Warren Truss said the government recognised that FIFO work practices were one way the labour market was responding to the demand for skilled workers around Australia. While this had an impact on local communities, many of the 21 recommendations more directly related to areas of state government responsibility.

Among measures ignored were steps designed to build the capacity of local government in regions heavily affected by FIFO and help small business engage with the resources sector.

The government simply noted 14 of the recommendations, and said it would act on just four recommendations.

He said the 2015-2016 budget's move to better target the Zone Tax Offset to ensure it would support those taxpayers who are actually living in and incurring the cost of residing in a remote area.

"We have remodelled the role of the Australian Small Business Commissioner to better service the needs of small business operators, and we already have a range of mental health initiatives in place that workers may utilise," Truss said.

He said the Commonwealth's commitment to the regions was effectively demonstrated by the billions of dollars it is providing in road and community grant funding

MCA deputy CEO John Kunkel praised the government for recognising that the economy as a whole has benefited from labour mobility, and developing areas such as Cairns, the Gold Coast, Busselton, Orange and Stawell as both sources of FIFO workers and transportation hubs.

"The government has wisely nominated the upcoming White Paper on the Reform of Australia's Tax System as the appropriate place to consider tax recommendations," Kunkel said.

The MCA has consistently opposed calls to remove fringe benefits tax exemptions for FIFO employees, and welcomed the Abbott government's decision to leave them untouched.

"It is a longstanding principle of good tax policy that business inputs are not taxed and the FBT remote area rules for accommodation and transport provided to FIFO employees operate on this basis," he said.

QRC's Michael Roche said the world had changed since the Winsdor Report was tabled in 2013.

For example data from Queensland Treasury shows that the number of non-resident workers peaked in 2012 and has fallen by 35%.

"The government rightly pointed out that many of the recommendations were already covered by federal, state or local government processes, or had already been announced, such as changes to zone tax rebates for FIFO workers.

But the QRC is also participating in a Queensland Parliamentary Committee inquiry and a Ministerial Panel Review, traversing much of the same ground.

"There is the distinct risk that many hundreds of hours are being devoted by MPs and others to looking in the rear window at the issue of the balance of residential versus non-residential workers in resource regions," he lamented.

AMEC CEO Simon Bennison said the Abbott government had recognised FIFO and drive-in, drive-out work practices as a legitimate way for employers to meet their skills needs, particularly in regional locations.

"AMEC and our members support FIFO and DIDO which provide an adaptive management capacity to meet industry demand and the differing needs of the workforce," Bennison said.

"There are a number of factors which influence workforce strategies, such as the cyclical nature of the industry, mine location, mine life cycle, the skills required and the transient nature of the workforce.

"FIFO has not only been successful in meeting the immediate needs of employers for construction and production purposes but it also provides workers with a choice.

"In many cases, FIFO rosters enable workers to set themselves up financially and provide the opportunity to spend quality time with family and friends when they are not on roster.

"The government's response acknowledged that FIFO work is preferable for some employees in a range of industries.

But the CFMEU remains furious, saying that central Queensland is "being smashed by unrestrained FIFO and governments who ignore the problem will feel the wrath of voters," national president Tony Maher said.

"At the moment we have the absurd situation where skilled and experienced mineworkers living in local communities and regional centres are locked out of jobs because mining companies insist 100% of their employees must fly in from the big cities.

"Once thriving communities are now hurting as whole families are forced to pack up and move out of town to find jobs, and local businesses are shutting down.

"The Windsor Report offered a clear path to mitigate the fallout for workers, families and communities but the Abbott government has rejected key recommendations."

Maher said the government was pandering to the big resource companies, particularly in Queensland's coal fields where there are a number of marginal seats, and he said CFMEU would flex its muscle at the next federal election.

"We saw in the recent Queensland election that voters will back candidates who challenge the narrow self-interest of mining companies and stand up to their bad behaviour. If the Abbott government continues to turn its back on regional mining communities, it will face the same revolt at the next election," he said.