Senate debates

Tuesday, 25 June 2013


Australian Jobs Bill 2013; Second Reading

4:15 pm

Photo of Nick XenophonNick Xenophon (SA, Independent) Share this | Hansard source

At the outset, I would like to indicate my broad support for the Australian Jobs Bill 2013. But I also believe that this bill does not go far enough. I note Senator Colbeck's comments in relation to the bureaucracy. I am always concerned about a new bureaucracy being created. Senator Colbeck gained a unique insight into manufacturing and into our food-processing sector through the inquiry that he very capably chaired and that I was pleased to be a part of. That inquiry uncovered some of the problems in the processing sector. There were a whole range of factors. There were supply chain issues, the duopoly issues and a whole range of other factors in terms of cost pressures on the industry. That gave us a unique insight into that sector. You can extrapolate some of the issues there about the problems with Australian manufacturing and the jobs being lost from there and jobs being lost in the sorts of projects that this particular piece of legislation will relate to.

Australian manufacturers are under threat. They are competing against a high Australian dollar and cheap overseas imports, and they are struggling to survive. Fortunately, the Australian dollar has come off the boil a bit—about 11 per cent—which is unambiguously good for the economy. I hope that it goes down even further to give our farmers and our manufacturers a fighting chance. I appreciate that this bill is an attempt to support Australian manufacturers and contractors and to ensure that they get a slice of the investment in both the public and the private sectors. But there are still too many hurdles in the way.

A report from the Prime Minister's Taskforce on Manufacturing in August last year estimated that 950,000 people were employed in the sector and it contributes eight per cent of our gross domestic product directly. That does not include the significant amount that it contributes indirectly through flow-on effects to other businesses. The multiplier is quite significant. It also comprises 29 per cent of Australia's exports, despite the high dollar. But the report also stated that over the last four years over 100,000 jobs have disappeared. That means that 100,000 families around the nation have been affected by this plunge in employment in our manufacturing sector. The report also estimates that another 85,600 jobs at a minimum may be lost in the next five years. I believe that that is unacceptable. We need to tackle that.

If we lose our manufacturing sector, we will be at a global disadvantage. We will lose not only hundreds of thousands of jobs but also our self-sufficiency. We should also look at what the Obama administration has been involved with in the United States. There has been a renaissance of the manufacturing industry in the United States, a turnaround. It is interesting that in that country, in exchange for the bailout funds given to General Motors, the United States took equity in General Motors. It is not unreasonable to say that if there is further assistance to industry we should look at the model that has been used in the United States, at least in regard to the funding being secured against assets and the like. We need to have a debate about that.

It is plain common sense that Australian contractors and manufacturers should have the first chance of tendering for government funded projects. Unfortunately, the tender process often does not look further than the flat price, so an Australian company can lose out to a cheaper overseas company. But that does not take into account the flow-on effect to the economy—the multiplier effect of using a company that is based here, employing people in this country, paying Australian taxes and contributing directly to the economy in a way that we may not see with other entities. An Australian company, although it might be slightly more expensive in dollar terms, may be a much better deal for our economy. Surely that justifies paying some extra taxpayer dollars, especially considering that those paid to an overseas company might simply go offshore.

I acknowledge that this bill aims to ensure that any company applying for tender has to meet certain requirements of, for want of a better term, Australian content whether it is applying for a publicly or privately funded project. But I do not think that this bill goes far enough. We also need to look at what has happened in the United States, where there has been a turnaround in their manufacturing industry. Procurement is an issue that my colleague Senator Madigan has campaigned on and been very vocal on. That needs to be considered very closely. There should be specific requirements to consider one-off costs versus overall economic effect.

I will also be moving an amendment aimed at ensuring that companies are aware of antidumping and countervailing issues. Under this amendment, project proponents who are operators of new relevant facilities will have to ensure that they are not using goods or services that contravene Australia's antidumping or countervailing laws. In practice, this means that contractors will need to look more closely at the overseas products and services that they are using to ensure that there is no possibility of dumping or countervailing. Naturally, contractors are not able to make formal judgements of whether dumping or countervailing is occurring. However, there should be a level of responsibility in terms of abiding by Australian laws in this respect.

Because the gag will be applied on this debate and there is not enough time to consider amendments, I will speak to my amendment on sheet 7400. The aim of this amendment is to require that contractors take every reasonable step to ensure that they do not use dumped goods or services in major projects. Dumping occurs when an item is sold in Australia below the cost it would normally retail for in its domestic market. Dumping is one of the biggest challenges facing Australian manufacturers. It is impossible to compete with the low cost of these goods, and the process of mounting an antidumping case against the importers is long, complicated and costly. Given that the aim of this bill is to increase the use of the Australian workforce in major projects, the issue of dumping must be addressed.

Late last year, we saw the case mounted by BlueScope Steel against cheap imported steel products. At the time, BlueScope Steel estimated that it had lost $50 million due to the dumping. While BlueScope has had some success in that area, there are still problems if duties are imposed by Customs. There are multiple stories of importers making slight changes to products, or even changing the location in which they are produced, to avoid duties.

The intention of this amendment is not that contractors must make a formal determination of whether a product has been dumped in Australia. Instead it requires them to take reasonable steps to ensure that the goods do not contravene any of the provisions of the Customs Act relating to antidumping. So, if it appears that a good or service is being sold below cost, it is reasonable to assume that dumping is occurring. Similarly, some projects require items to be made specifically for that project because they exceed normal specifications or are not readily available—for example, a steel girder of unusual size. Where there is an arrangement for the manufacture of these unique items, the contractor will have a better idea of the relevant costs involved and may decide the item could be in contravention of antidumping provisions because of the comparative pricing or quotes they have received for the work.

Antidumping law is incredibly complex, and this amendment does not require contractors to make formal decisions. It does, however, put antidumping on the radar and gives Australian companies a better chance of competing against dumped goods or services. I note that tonight there will be a debate—as truncated as it is—in relation to dumping, which is a very important issue in terms of Australian jobs being needlessly lost through unfair practices.

I should also note that the Australian Greens will also be moving amendments in relation to the major product threshold and to allow the minister to designate a project as a major project for the purposes of the act. I broadly support that. I also note that my colleague Senator Madigan will be moving an amendment, which I have co-sponsored but he has instigated, to change the current major project threshold. At the moment it is $500 million. A limit of $20 million is more appropriate. Senator Madigan can speak to that. To be truly effective, the measures in this bill should be more widely applied. I think $20 million is quite a reasonable threshold, and that is the threshold it should apply to. Otherwise, all the principles and criteria in this bill will be simply too narrowly applied. The amendment that Senator Madigan will be moving, which I am very pleased to co-sponsor, will ensure that a significant number of projects in Australia will have to comply with the requirements of this bill, and that will further support Australian jobs.

Ultimately, I support the general intent of this bill. I note the matters raised by Senator Colbeck, which I think are quite reasonable, about other cost pressures on Australian industry, but I think it is also important that there is a level playing field when we are tendering in these major projects where taxpayers funds are involved, and we need to consider once and for all what the true benefit is of having local companies involved and local jobs being involved in manufacturing and production for major projects. The multiplier effect cannot be understated. My fear is that if we lose more and more manufacturing industry in this country, which we must avoid at all costs, we lose that base of innovation, we lose that technological advantage and we lose the skills that we will never, ever get back. I think we should look at what the United States have been doing in recent times, where they have seen a renaissance in their manufacturing industry. They have had policies similar to this, as I understand it, and this has encouraged a renaissance in the manufacturing industry.

To the workers at General Motors Holden who might be listening in my home state of South Australia: I believe that this bill will help. It opens up debate about procurement policies that are reasonable and fair for Australian manufacturers and Australian jobs. So I support this bill, and I look forward to the amendments that I will be moving also receiving the serious consideration of my colleagues.


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