Michelle Rowland (Greenway, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Climate Change and Energy Efficiency. Is the minister aware of recent comments made by officials from BlueScope about the government’s plans to tackle climate change? If so, what is the government’s response?

Greg Combet (Charlton, Australian Labor Party, Minister for Climate Change and Energy Efficiency) Share this | Link to this | Hansard source

I thank the member for Greenway for her question. Of course, the government will welcome contributions by representatives of industry to the carbon-pricing debate, including by BlueScope Steel. I am aware of comments made yesterday by the Chairman of BlueScope, Mr Graham Kraehe. In part he expressed dissatisfaction at the level of consultation with his company. I take this opportunity to put the record straight. BlueScope was extensively consulted on the development of the Carbon Pollution Reduction Scheme in the last term of parliament and in this term of parliament, since I have been the minister, I have met with representatives of the company on five occasions, including twice through the government’s business roundtable, of which the BlueScope CEO, Mr O’Malley, is a member. The evidence of the consultation does not match the assertions that Mr Kraehe has made on this point.

Secondly, today the Australian Financial Review reported that BlueScope, as the Prime Minister made some observations about a moment ago, will now abandon plans to build a $1 billion cogeneration plant at the Port Kembla steelworks. The implication of the story was that this is somehow related to the proposed carbon price. This is an example of the misinformation that has unfortunately entered this debate, because in fact the Illawarra Mercury reported that BlueScope’s announcement not to proceed with the cogeneration plant was made on 21 February, three days before the government’s carbon price framework was announced.

That was not the only time that BlueScope’s plans for that plant had been cancelled or deferred. In the Sydney Morning Herald on 6 May 2009 it was reported that BlueScope would cancel its plans for the cogeneration plant because, as the Prime Minister indicated earlier, the argument was, at that time, that the emissions trading scheme planned by the government was not coming in soon enough. So the argument has shifted about a bit. The argument back then was that BlueScope had to defer or cancel the plans because there was no carbon price but now it is apparently, or at least inferred, that the cancellation is related to a carbon price announcement.

Finally, Mr Kraehe yesterday made a number of comments about the potential impact of a carbon price on BlueScope Steel’s operations. As the detailed features of the carbon price mechanism, including the assistance arrangements for BlueScope’s operations, are in fact the subject of the consultation process involving the company and are yet to be settled, Mr Kraehe’s observations are, at best, a bit premature.

Ms Julie Bishop (Curtin, Liberal Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

Ms Julie Bishop interjecting

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

Order! The Deputy Leader of the Opposition!

Greg Combet (Charlton, Australian Labor Party, Minister for Climate Change and Energy Efficiency) Share this | Link to this | Hansard source

The government has made clear that we will be providing assistance to support jobs and competitiveness in the most affected industries, including steel. It is worthwhile noting that under the government’s previous scheme, the carbon pollution reduction scheme, BlueScope would have received 94.5 per cent of their permits for free, very substantially offsetting their carbon liability.

Ms Julie Bishop (Curtin, Liberal Party, Deputy Leader of the Opposition) Share this | Link to this | Hansard source

Ms Julie Bishop interjecting

Harry Jenkins (Speaker) Share this | Link to this | Hansard source

The Deputy Leader of the Opposition is warned.

Greg Combet (Charlton, Australian Labor Party, Minister for Climate Change and Energy Efficiency) Share this | Link to this | Hansard source

The government certainly understands the pressure that the steel industry is under through the combined effects of the high Australian dollar, increased coking coal and iron ore commodity prices and a significant supply of steel on world markets. The government is committed to working closely with the steel industry over its carbon liability and the assistance arrangements to apply, but in this discussion calm, reasoned and empirically based debate will best serve the public policy outcome that we all desire.