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Wednesday, 15 August 2012
Page: 8799

Mr O'DOWD (Flynn) (19:50): Yesterday morning in Gladstone employees of the Boyne smelter arrived at work to be greeted by the news of the company's restructure. Of the nearly 1,200 workers at the smelter, 90 had been told that the company could no longer afford to employ them at their current capacity. Some were offered redeployment and others have no job. I am saddened by this news and my heart goes out to those who have been affected by this situation. The Boyne smelter is a valuable part of the Gladstone region and it is a vital player in the aluminium industry in Australia.

We know that the industry is suffering under current market conditions, and this is why the coalition has been so vocal about the need to ensure that its future is not thrown into jeopardy by excessive government regulations and tax. The challenges that face the industry are pretty well known, but over the last 18 months conditions for the industry have deteriorated. The price of aluminium on the London Stock Exchange has dropped steadily. Prior to the GFC the price of aluminium was approximately $3,000 a tonne. Twelve months ago it was something like $2,100 a tonne. It is now between $1,800 and $1,900 a tonne. This is below break-even.

The Australian dollar has continued to remain high and Chinese production has not slowed. This has increased the global stockpile of aluminium. Stock levels are very high. Input costs for electricity, water and gas have dramatically increased over the last five to 10 years, especially over the last two. Access to domestic gas has become more restricted as LNG markets around the world pick up and the price of gas picks up. Queensland industries are starting to struggle. There is no situation in Queensland such as exists in Western Australia, where 15 per cent of gas must be returned to the domestic market.

One week after the announcement of the carbon tax, Rio Tinto changed their name to Pacific Aluminium at Boyne Smelters and put the establishment up for sale, along with other non-core assets. What should the government have done? It should have ceased its wasteful spending and reined in Australia's burgeoning national debt; acted to pay down national debt to reduce pressure on the Australian dollar; and offered stability and sound governance to provide a stable operating environment for the industry to weather the storm. What did the government do? It ignored warnings from industry—from Boyne Smelters and associated industries. It introduced the carbon tax at the very worst time.

The aluminium industry is vital part of the Gladstone region and the electorate of Flynn. Up to 6,000 people are indirectly or directly employed across the two refineries and Boyne Smelters. The government is partly responsible for the loss of 90 jobs that was announced yesterday, and for that it should be held accountable. The Gillard government knows the challenges facing the aluminium industry. It has been told not just by the opposition and me but by the industry. Despite this, it has not shown any mercy or loyalty to these Australian workers and has proceeded with the implementation of a carbon tax that is breaking the backs of companies like BSL.

When you consider BSL and other Rio Tinto projects around Australia, including at Weipa, Gladstone and Tasmania, and in New Zealand, plus wherever else we export our aluminium or alumina products, it is likely that, if one falls, the whole lot will fall. This would be a disaster for Australia and for Gladstone. So I urge the government to listen to what the industry are saying and come forward with some helpful information and direct action to save these companies.