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Thursday, 29 May 1997
Page: 3951


Senator PARER (Minister for Resources and Energy)(10.21 a.m.) —I know the position taken by the Greens and Democrats; it is one that I understand. The hypocrisy in this is with the Labor Party. I asked Senator Brown which minerals he was talking about. Let me tell you, Senator, that when the original export controls came in they covered every mineral, they covered oil and gas—they covered gas anyway and I think they covered oil—


Senator Brown —Are you sure?


Senator PARER —They covered gas, liquefied or not liquefied, petroleum gas and condensates. So it covered the things that came from the gas. With the passage of time, these have been slowly whittled down, so that what we have now—and I am not including uranium or radioactive materials—is that the export controls now only apply to coal, liquefied natural gas, bauxite alumina and mineral sands.


Senator Margetts —Mineral sands are radioactive in most cases.


Senator PARER —Senator, monazite comes from mineral sands. There is no export licence for monazite. We are talking about the use of uranium for peaceful purposes, which is not included.

Let me just cover some of the points that I think are worth making. The original export controls were introduced by the Whitlam government because they believed that they could somehow control the price on world markets. I was very much involved with that. It was an abject failure from go to whoa. It not only was a failure but cost this country, I would say in retrospect, billions of dollars and thousands of jobs. I will tell you why. Let us take them one by one.

The coal industry is our biggest export industry, about $8 billion or a bit more. It is a fifty-fifty split between coking coal and steaming coal, coking coal going to the world's steel industry. The advent of export controls and the heavy-handed approach, I might say, taken by the then minister, Mr Connor, were such that countries such as Japan and Korea were forced to diversify their supplies.

Last year I had the opportunity to go to Korea to talk to all the various groups involved with purchasing out of Australia. It was very interesting that one of the persons I spoke to who has no axe to grind anymore was the chief purchasing officer for Pohang Iron and Steel. When I mentioned to him that we were looking at getting rid of export controls, he came over and he actually shook me by the hand—he is now retired. He said to me, `Do you know that, if you had not had export controls, we would be importing from Australia about 70 per cent or 80 per cent of the materials required for our steel mills rather than 50 per cent?' So they diversified into the United States, not a very good investment, I agree, but they were prepared to pay that cost of diversification because of the very existence of export controls.

The same thing happened with Japan. Japan invested in Canadian mines at great cost to themselves. Again, they were prepared to pay that additional money to diversify. It was an insurance policy. So export controls are not just symbolic in the coal industry. If people in this chamber are interested in increasing our export income, if they are interested in addressing our foreign debt, if they are interested in creating more real jobs, you would at least expect they would say, `Let's do this for the coal industry.' Obviously there is no interest. There is some ideological thing.

The hypocrisy of the Labor Party is that they themselves removed export controls. Export controls now apply in the absence of uranium to only four minerals. What is the difference between coal, bauxite alumina, iron ore, copper and manganese? I ask you that question. It is just nonsensical. It does not make any sense. They have the freedom to go and make arrangements without the possibility of some hostile government sometime down the track holding them to ransom. If you are a country, if you are a buyer, that has no inherent materials to feed your steel mills, or whatever, you are concerned that this thing sits there not in a symbolic sense but in a real sense that could some day cause problems.

Bear in mind that a lot of those countries have been through that experience with the OPEC crisis where suddenly their oil supplies were chopped off or the price was doubled, tripled, or whatever it was. Let us just touch on another point.


Senator Margetts —We can't have the international market inconvenienced for a small thing like the environment, can we?


Senator PARER —I will come to the environment, Senator. I am talking at the moment. You are not interested, are you, Senator, in more jobs, export income, families, real security of jobs.


Senator Margetts —Yeah!


Senator PARER —You could not care less about that.


Senator Margetts —Get real!


Senator PARER —Do not inflame me. I know your position anyway. At least it is consistent.


The ACTING DEPUTY PRESIDENT (Senator Patterson) —Order! Senator Parer, address your comments through the chair.


Senator PARER —At least you are consistent. I am not critical of you.


The ACTING DEPUTY PRESIDENT —Order! Senator Parer, address your comments through chair.


Senator PARER —Madam Acting Deputy President, at least Senator Margetts is consistent. I know that. The Labor Party is where the hypocrisy occurs.

Senator Faulkner talked about the environment. Let us take the coal industry. What did he do in government? What did his government do? I will tell you what they did. They accredited the states to do the environmental impact assessment under the intergovernmental agreement on the environment—a sensible decision, done very quietly. It is one which I agree with, and it has worked. But you still have the stupidity, as happened to me last year, with a mine in New South Wales that had been going for 19 or 20 years that was shut down.

Moonie was the name of the mine and it was resurrected. Nothing had changed. I was told that I had to designate that mine that had all the infrastructure otherwise someone might challenge it and it could be held up for two or three years. So we went through all the paperwork, all the stuff—totally unnecessary. Of course, it eventually went through its process, but it was only simply because the thing had been shut down for 12 months. It was resurrected, people were employed, jobs were created, but we had to go through this sham.

Let us talk about LNG. LNG is something that has a whole of life approval. Pricing is hooked into the world price of oil, but we had this incredible situation. For the interest of members, this bundle of papers I am holding represents the size of the documentation I had to approve for two spot cargoes to go to the United States from the same facility on the North West Shelf. Mr Smith did come to see me and I did say to him, `This is at least a minor step forward.'


Senator Faulkner —Don't be so ungracious.


Senator PARER —I am not ungracious. I think he is moving in the right direction. Why do this? Why do it for something like that and not the coal industry? That is the one that has suffered under this policy.

The next one is bauxite alumina. The reason for the bauxite alumina had nothing to do with the environment and it still does not. What it was all about—and I have heard Senator Brown talk about this—was transfer pricing. That is the reason it was there. With the passage of time what has happened is that transfer pricing is now under the control of the taxation department. The role of the Department of Primary Industries and Energy is to act as an honest broker so that the taxation department does not go too far and there is some sort of balance. With the removal of export controls on bauxite alumina, at the request of the industry, that process will continue to occur. That is the way it operates right now; it really has nothing to do with export controls.

With regard to the environment, as I mentioned, the original introduction of controls was based on price. The government of the day somehow thought that the industry was not capable of doing its own pricing. I can recall, because I was in the industry at the time, coming to talk to the head of the department on a price settlement with the Japanese. We spent two days talking, not about the price but about the sort of wording that would sound all right once it got out into the arena.

It was also pointed out to me by senior officials at the time that, `This is a fragile flower.' Of course it is a fragile flower. Could you imagine any government knocking back a major contract with countries such as Japan or Korea? The industry, as it tends to do and always will I would imagine, tries to work with incumbent governments. We did at the time. But it was always a charade. So that was the original intent.

The mechanism introduced by the Commonwealth Environment Protection (Impact of Proposals) Act had the effect of adding an environmental consideration to the ministerial decision making process in relation to the controls. The original Commonwealth environmental legislation was introduced because of the concern of the government of the day that state and territory governments did not have in place adequate environmental legislation. The Environment Protection (Impact of Proposals) Act, the Australian Heritage Commission Act, the Endangered Species Protection Act and the World Heritage legislation were all passed after the introduction of export controls.

In the 22 years since 1974, state and territory governments have put in place strong environmental legislation. This has been recognised in the intergovernmental agreement on the environment. It is what the previous government did. The agreement provides for full faith and credit to be given to state environmental processes and aims to streamline the process. The intergovernmental agreement is, in fact, a creation of the previous government. This government honours the commitments made by the previous government.

It was an efficient way of doing things. It removed duplication. Even on the mineral sands side, the previous government went down the route of approving basically life of mine processes. I have no objection to that. But what we are saying here—as I think the Leader of the Opposition said—is that improved price is nonsense. It never worked and it never will. A lot of pretence went on and the net result of it all was that it cost this country and it is continuing to cost this country.

Recently, officers of my department were in Taiwan. They have a requirement over there that they will only import 35 per cent out of Australia. Underlying that is the uncertainty that exists because of the very existence of these export controls. Hence the remark I made early in the piece: they are not just symbolic.

Senator Faulkner claimed there are no alternative mechanisms. There are a series of mechanisms in place and you know that, Senator Faulkner. You know we have environmental laws federally that we did not have many years ago. You know the states have environmental laws they did not have years ago. You know they are working—that is why you accredited them.

My plea is for the Senate to oppose the opposition's disallowance motion because—and I have no axe to grind—I have a power I do not want. The reason I do not want it is that I believe it is to the detriment of our industry, it is to the detriment of the nation and it is against employment in this country. I would like to reiterate, because of the misnomer that came through from a lot of the debate today that export controls apply to all minerals: they do not. They only apply to those in the regulations—namely, coal, liquefied natural gas, bauxite alumina and mineral sands. They do not apply to any other mineral. They used to; right back in the beginning they applied to every mineral. But, with the passage of time, they have been eliminated.

I ask again: what is the difference between mines for coal or bauxite or iron ore or zinc or manganese or copper? At least you would expect the opposition, after its term in government, would have some sense of balance. Instead, they have lost the plot. There is no commonsense in their opposition to this, although there might be something ideological about it. I know, for example, that the CFMEU, over many years, wanted to maintain the export controls. This was not for the environment; rather in their own hearts they thought that it might be the vehicle to set up a marketing authority. The previous government, quite correctly, would not have a bar of a marketing authority. I can remember a famous story about former Senator Walsh being approached by them saying, `This would be a good idea. We think you should start a marketing authority.' In the typical Walsh fashion, my recollection is that he threw them out. But that was the intent.

I might say that neither the previous government nor any future government is going to introduce a marketing authority for the coal industry. The CFMEU probably understands that. There no logic behind the Labor opposition opposing this regulation unless it is still there as some sort of an icon for the CFMEU and when they yell Senator Faulkner says, `How high?'