Monday, 19 June 2017
Private Members' Business
Steel Industry: Employment
That this House:
(1) expresses its support of Adani's decision to purchase $74 million worth of steel rail from Arrium's Whyalla steel works;
(2) recognises that the:
(a) order will help sustain jobs in South Australia and particularly in Whyalla;
(b) extra work comes at a vital time in the process of selling the Arrium business; and
(c) Arrium business in Whyalla is vital to the city's future and loss of this order would have a material impact on its future;
(3) rejects any further:
(a) attempts to delay the Adani project which was taken by both the Queensland and Commonwealth governments to their respective constituencies prior to their last elections; and
(b) delays which threaten the jobs of workers in Whyalla; and
(4) condemns actions that threaten Australian manufacturing jobs.
I rise to speak on this motion and to celebrate the fact that Adani has placed an order for $74 million worth of steel rail to come out of Whyalla for its Carmichael project. Whyalla has been sitting on the edge of a precipice for the last 15 months—since the day that Arrium announced that they were going into administration. Whyalla is a town of 23,000 people and there is only one predominant industry there. It employs and provides the knock-on employment for virtually the whole population of Whyalla. I estimate that if the mines and the steelworks were to close, we would see more than 5,000 people in the city of Whyalla on Newstart within 12 months. The rich history of steel making and iron-ore mining in Australia cannot run the risk of evaporating.
Since that time, the federal government has worked very hard to supply some kind of sustenance to Whyalla. In particular, we lent $49 million to the Arrium administrators to install to new beneficiation plants on the Middleback Ranges, which opens up the possibility of exporting ores that were previously not seen to be of high-enough quality; in fact, these ores are already mined and sitting in stockpiles. We also sent the order, through the Australian Rail Track Corporation, to re-rail the Adelaide to Tarcoola line, which is 600 kilometres long—that is, 1,200 kilometres of linear rail. That was an order worth around $80 million. And it makes such a difference to have the steelworks at capacity. It is a bit like running a motel: if your motel is running at 50 per cent, you are in trouble. If your nursing home is running at 90 per cent instead of 98 per cent, your finances are in trouble. And so it is with a steel plant. If the steel plant is running at close to 100 per cent, that is the best opportunity to derive a profit.
So this extra work has made a significant difference to Arrium in this time when we are looking for a new buyer. I hope to get onto that in a moment, because it looks exceedingly close at the moment. In this mix, there had been the pre-existing announcement by Adani that they were going to open up the Carmichael mine in Queensland and that they would need a significant amount of rail to deliver that project. I would particularly like to thank Mr Raj Guruswamy and Jeyakumar Janakaraj, commonly called Jay Jay, who is the CEO of Adani in Australia. When I spoke to them around about 12 months ago, I said, 'You need to show us that you want to invest in Australia, that you are interested in the people of Australia and the industries of Australia, and a very good signal of that would be for you to buy Whyalla rail.' And, of course, they have said that is exactly what they will do.
It looks now as though the Carmichael mine has cleared the last of the obstacles, and that order will go ahead. This is rolled gold, good news for Whyalla. It is jobs in Whyalla. And the knock-on of that is just last week we had the announcement by the creditors that their preferred bidder for the Arrium group of businesses, including the Whyalla steelworks and the Middleback iron ore deposits, is Newlake, a South Korean company which has ties back to Posco. They will build a new steel plant in Whyalla worth more than $1 billion. This will be an enormous investment for Whyalla. They will bring new technology. The Finex steel technology will produce more gases, and that will in turn give the opportunity for cogeneration to provide baseload electricity. It is a win-win-win on every level.
Of course, a very important signal in all this has been that the order books for Arrium have been full, and that has come about by dint of a renewed interest in Australian business, because they understand that it is in the national interest to keep these steelworks open. It has come about by the interest from the federal government in delivering the Adelaide to Tarcoola line and in the moves that it has made in antidumping legislation, an inquiry that I led in this place in the last parliament. It has also come about from the order that has now come from Adani. It is jobs for Whyalla, and it good news for South Australia and good news for Australia. (Time expired)
On the issue of Adani, it is quite extraordinary in this place that the Labor Party has been anti-coal. The whole Labor movement in Queensland has been founded around the coal industry. I have been involved in discussions with the state government, and I know my union, the CFMEU, has been involved in discussions with the state government. As a result of those discussions, some fortnight later, the state government announced they were in favour of it. Whilst everyone is saying that it is going to go ahead, we do not notice any dozers out there, and it seems to me that there are not going to be any dozers out there.
It is extraordinary. It is like coming into a lunatic asylum here. There do not seem to be many people here aware that one-half of Australia's entire export earnings come from coal and iron ore—a quarter from iron ore and a quarter from coal. To put that in perspective, there is $130 billion in revenue coming in from those two streams, and the next one down is gold at $11 billion. But do not worry about gas, because it is all foreign owned and there is no labour content, so $23 billion just comes in and just boomerangs back out again. So do not worry about gas; that does not figure. So what are you going to do: bankrupt your country; undermine the economy of Queensland, which depends upon coal?
I do not know where the ALP is going. They have five marginal seats in the northern half of Queensland—north of Bundaberg. If you think you are not going to get punished for being anti coal, you believe in the tooth fairy. People may be dumb at times, but they ain't that dumb. And they are not dumb all the time, so do not count on people being stupid, particularly the workers, who are much more sophisticated people now than they were in days past. If you live in Townsville, which I think is the second most marginal Labor Party seat in Australia, you are in an area that has 14 per cent unemployment and the highest crime rate in Australia. And Mackay may well be worse, except more people have got up and left Mackay. The member for Dawson has said that there are 2½ thousand houses empty in Mackay. There are a thousand houses empty between Moranbah and Charters Towers. I will personally ensure that all of the newspapers through the coal belt and in all the mining cities hear what was said by the ALP members in this place against the coal industry.
There would not be a single member of parliament here who would not have heard the expression that poor people have to decide whether to turn the lights on or have food for the night because the cost of electricity has risen by such dramatic proportions—to $2,300 per household in Queensland, and that would probably be a fair figure for the rest of Australia. It has risen by 250 per cent in the last 11 years, and it ain't stopping. Now, I am not going to stand here and be a hypocrite. The major component of that is monopoly rent. Now that the electricity industry has been corporatised, those four or five corporations have a monopoly however you want to argue it. When I went to university they taught me that this was an oligopoly and that they could charge what they liked—they do not tend to compete against each other; they compete with each other. So no-one can explain the price going up by 300 per cent. It ain't what the Liberals say, which is that the greenies have put it up by 300 per cent. They have made their contribution; they have put it up by 30 per cent that it did not need to go up by. But I am one of the very few people here— (Time expired)
I rise in support of the motion proposed by the member for Grey. In doing so, I congratulate the member for Grey for the incredible work that he is doing to support the Arrium steelworks in Whyalla in his electorate. The workers at Whyalla could not find a better champion than the member for Grey, and I think this deal is proof positive of that. A lot of people have sought to take credit for it, but I can assure you that it was the work that the member for Grey did behind the scenes that secured this agreement from Adani and, in turn, secured a $74 million contract for the Arrium steelworks.
But not everyone is so supportive of this proposal. Not everyone is as supportive of the Adani coalmine as the member for Grey is or, indeed, as I am. The former member for Wakefield, someone who sat as Speaker of this place, gave me a little bit of advice before I came here. He said to me, 'Whatever you do in this place, make sure that you act consistently.' So I am going to highlight an inconsistency about this from one of those who do not sit on the government benches.
On the one hand, we have the Nick Xenophon Team and Senator Xenophon indicating to South Australians that he is pro South Australia, that he is the greatest champion the men and women working at the Whyalla steelworks have ever seen. But embedded within the Xenophon team is the member for Mayo. Recently, in response to a rather innocuous question on her Facebook page, where a constituent of hers indicated, 'This is fantastic but what is your position on the Adani coalmine?' the member for Mayo indicated, 'I am not certain it is in the national interest.
We have a political party that says its heart beats in South Australia and says that it is for South Australian jobs, and their only representative in the House of Representatives says to the people of South Australia, 'I am not certain that the Adani coalmine is in the national interest,' effectively, what the member for Mayo is saying is she is not certain that we should be underwriting these jobs for South Australian men and women in the steelworks of Whyalla. I am very pleased that the member for Whyalla has placed herself on the speakers list, because she will be able to indicate in this place—clearly, for the people of Whyalla—whether she supports the Adani coalmine. Of course, if you do not support the Adani coalmine you do not support jobs at Whyalla.
You cannot walk both sides of this street. You either support the Adani coalmine—which, by the way, will ensure that tens of millions of Indians get access to affordable electricity and, in some cases, electricity full stop—or you do not. If you do not, you are saying to the workers at Whyalla: 'You are a step closer to these steelworks being closed and you joining the unemployment line.' I am very pleased the member for Mayo has this opportunity because I am confident she will come out and say, 'I support the steelworkers at Whyalla.' In so doing, she is indicating that she is supporting the Adani coalmine. If there is any other position put in this place, then, effectively, what the member for Mayo is saying is that she does not support those jobs.
I should indicate to her that by way of background her leader, Senator Xenophon, in the other place, is telling every journalist who will take his phone call that he was the architect of this deal. If he was the architect of this deal she must indicate that she supports the mine and that she supports the deal. Any other choice says that not only the member for Mayo does not support jobs at Whyalla but also that the Xenophon team has given up on jobs at the Whyalla steelworks. That would be a great tragedy, because the coalition is backing the Adani coalmine and jobs at Whyalla.
I hope I am standing in the right place! In one sense, I welcome the member for Grey's motion. This is a delicate time, obviously, in Arrium's history. We are coming out of a long period of receivership—nearly a year—and the people of Whyalla have been particularly stoic, particularly hard working and particularly decent in the challenges that this town has had for a year now. That uncertainty is a terrible thing to live with, and we are now coming close to light being at the end of the tunnel. We have a preferred bidder; the administrator is working through the process of the sale. We broadly have bipartisan support in this place and between federal and state governments. We have a lack of contentiousness, I think, in this area, where people have been particularly constructive and particularly careful about what they say. I think that is an important thing. I think it is important that the state Treasurer of South Australia has made a contribution—outlined; it is public. He has worked hard with the federal minister, Mr Sinodinos. There is an attempt to take some of the politics out of it and to work in the national interest.
In one sense, it is good that we are here talking about this today—and it is important that the member for Grey represent his constituents, particularly those in the iron triangle and the town of Whyalla. In another sense, what we see here are some pretty silly politics. I am all for robust debate; people who have listened to my contributions in this place would know that. I am not above having a go at the other side, or indeed the crossbenchers or anyone else where I think it is due or appropriate. But linking, in this case, the politics of Adani and North Queensland—whatever you think about that mine, I think it has to stack up under its own weight. I do find it interesting that we have the member for Barker's and the member for Grey's new-found commitment to industry policy, and the member for Barker talks about underwriting jobs, yet they sat idly while Mr Abbott and Mr Hockey completely gutted South Australia's industrial base by turning their backs on the car industry. What a difference a few years makes, I guess you could say. Cold comfort for car industry workers in my seat and my state.
I would rather that this motion's words were expressed in a different way. By all means mention this contract—it is no bad thing if Adani goes ahead that they might buy steel off of Arrium; it is a good thing—but I think it would be tremendously positive if the member for Grey might talk about the Melbourne to Brisbane Inland Rail project. I read this document on that project with some interest. The Turnbull-Joyce commitment to this project is very positive, but there is not one word in this document about Australian steel. It is a huge purchase and it is a huge bit of procurement. We could have all been in here talking about this project, in a positive and bipartisan way, giving some commitment and some future hope for the workers at Whyalla, the unions and the future buyer of the Arrium steelworks. It would have been a good thing to talk about the procurement of that project and many others. We know that we have a job to do. Procurement is not just about having a policy; it is about talking to the procurement officers about having the structures in place to make sure that the government does procure Australian steel. I think the member for Shortland might have something to say about those structures and processes.
This is an important issue. It is an important time for us to make bipartisan commitments. It is an important time for us to use bipartisan language. The people of Whyalla need that. For us to have a positive outcome, I think that is what is required. We should eschew the silly politics of trying to link this to one particular project and one particular time, and focus on the long-term future of what is a very important national asset, the Arrium steelworks at Whyalla. To that extent, I look forward to the member for Grey introducing more motions so that we can discuss this further. (Time expired)
The Nick Xenophon Team is committed to Australian jobs and Australian steel. We are especially committed to continue the operation of Arrium in Whyalla. There have been no greater supporters and no more vocal supporters than Nick Xenophon and the Nick Xenophon Team. If the Liberal and National parties were as serious about using Australian steel in Australian infrastructure as the Nick Xenophon Team is, then they would not be talking about their little pet Adani project; they would be talking about $190 billion being spent on infrastructure by state and federal governments in the next four years. The undertaking that Adani will purchase just $74 million—which, you know, is commendable, but is nothing like $190 billion in infrastructure—is only 0.04 per cent of the combined government infrastructure spending over the next four years, a mere drop in the ocean compared to the total of $190 billion over the forward estimates. As of April 2016, when it went into voluntary administration, Arrium owed $4 billion worth of debt. Seventy-four million dollars, if this much-vaunted deal ever comes to pass, will not be even two per cent of the debt that Arrium owes. So I say again: if the Liberal government, and particularly the member for Grey, is serious about supporting Arrium, Whyalla and its steelworkers, it will stop spreading false hope and get serious about its commitment to Australian jobs and Australian steel.
As to the member for Barker, while I am somewhat delighted and perplexed that he has enough time to spend looking at my Facebook page—though I, sadly, do not have much time to spend looking at his Facebook page—I am sure his constituents would much prefer he spent his time focusing on his electorate. However, I digress. The member for Barker is ignoring the massive infrastructure commitment that this federal government has made in this budget. He is choosing to talk about Adani and $74 million and he is not talking about, for example, the $8 billion proposed Inland Rail project between Melbourne and Brisbane. It is a massive 1,700 kilometres, as the member for Wakefield said. It is 1,700 kilometres of dual lane steel. It is not narrow-gauge steel across flatland, like the proposed Adani project, but standard-gauge steel that goes up and down mountains—steel for tunnels that go through hard rock and earth; steel for bridges. Any way you look at it, it will be a lot of steel and, on conservative estimates, 1,700 kilometres of rail would use 230 tonnes of steel.
Member for Grey, I was incredibly respectful while you were speaking and I would appreciate it if you would do the same for me. But this is one infrastructure project within the $190 billion of government infrastructure spending. The member for Grey said on ABC Adelaide: 'That can't happen. We can't let that happen.' And yet, despite the fact that we make excellent quality steel right here in Australia, the Liberal and National parties will not commit to using Australian steel on the Inland Rail project.
Procurement rules have changed, so that we hopefully have more of a level playing field for our Australian companies who are missing out because they are not producing goods at a cheap rate overseas. Arrium and the steelworkers of Whyalla in the member for Grey's electorate are crying out to keep their jobs and the Australian engineering expertise here in Australia, but the federal government refuses to commit to Australian steel—not for the Inland Rail project nor for any other major infrastructure projects that would use Arrium steel. That is not what the taxpayers want. If the Liberal and National parties are serious about a commitment to Australian steel and Australian jobs, they would have supported the Australian car industry; they would have supported the Automotive Transformation Scheme. They did not. It was underspent and the money would not be transferred elsewhere to support manufacturing.
The federal government's response has been to do nothing while that money remains unspent, while South Australia has the highest rate of unemployment of all the mainland states and while we continue to be concerned about a tsunami of job losses with the closure of Holden, and we have the member for Grey talking about $74 million to be spent by Adani when what we are missing out on is the opportunity for the Australia government to invest in Australian steel and Australian manufacturing. The best quality steel in the world—we make it. We make strong, quality steel, not rubbish. And this should be on our national infrastructure projects.
The future of the Whyalla steelworks is an incredibly important issue. The future of Arrium is incredibly important because they employ more people than just those at Whyalla. There are steelworks and steel production in Newcastle that Arrium own which are really vital to the ongoing future of the Hunter Valley.
But to link it to the Adani debate is profoundly silly. It is profoundly silly because the future of Arrium will not be decided by what happens with Adani. If Adani goes ahead—and I will return to that if time permits—it would provide 15 days of production for the Whyalla steelworks. That would be welcome. That would be great for the steelworks. But it would be 15 days' production out of 365 days' production per annum that they have got to find orders for. So I want to put that in context.
My real point in this debate is: if the government were serious about supporting local steel and if they were serious about driving local content, they would actually match their rhetoric with action—match their words with action. But what have they done since coming to power? They have gutted the Australian Industry Participation Authority, an authority set up by Labor and an authority that was part of a $100 million package. What have they done? They gutted that package, cut funding by $70 million and, despite the bill passing in 2013, they still have not appointed an Australian Industry Participation Authority. All they have at the moment is a public servant who has been acting in that role for three years. That is how seriously the government takes industry participation. They are all talk on dumping; they make big announcements but they do not implement anything that gives our vital industries like steel real relief. There are real question marks about the enforcement of both Australian and international standards for building products coming into this country.
The member for Wakefield eloquently highlighted the pinnacle of this hypocrisy from the government, and that is that their boast about killing the automotive industry, an industry that employed 50,000 people directly and 200,000 people indirectly and ordered a lot more steel than the 15 days of steel that comes from Adani. They bragged about killing that industry; they have 250,000 jobs around their necks because of that decision. There is a bit of shadow-boxing in this debate, but we all support Whyalla going forward and we all hope that the new owners embrace it, modernise it and reinvest in it. That would be great, but to link it to Adani is profoundly silly and, by some inference, to say that you have to support a billion-dollar loan through Northern Australia Infrastructure Fund to support the Whyalla steelworks is a step further in economic lunacy. The government giving $1 billion loan to that project endangers 18,000 Hunter coalmining jobs. That is ridiculous because global coal demand has peaked and so to add another seven per cent of coal into the market through a subsidy—if it is unsubsidised, that is fine—of $1 billion from the federal government is economic lunacy and it imperils the 18,000 Hunter coalmining jobs that I proudly represent in this place.
I support the ongoing viability of Whyalla. This is a good debate, and I support and applaud the member for Grey for bringing it into the chamber. Like the member for Wakefield, I hope he brings more debate into the future of Australian steel. But I urge him in his party room to say, 'Bring back the AIP Authority and fund it properly.' Tell them too to take actions on the dumping authority and look at building standards and stop bragging about killing the Australian automotive industry.