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Tuesday, 8 November 2011
Page: 8564


Senator FIERRAVANTI-WELLS (New South Wales) (16:55): The Steel Transformation Plan Bill was an afterthought to the clean energy package. We are dealing with it separately because it was not part of the original package. It was dreamed up when there was an outcry about the carbon tax and the Gillard government scrambled to garner support from the very people who had helped it limp into power—in other words, the unions. It exists to stem the tide of damage caused to the steel industry by the carbon tax. How embarrassing was it for the government when Paul Howes and his AWU buddies did not publicly support the carbon tax! Why? Because they knew it was a jobs killer. That 'faceless man' had his fingers all over this. The Prime Minister knew that she had to get Paul Howes onside, so we now have this $300 million plan. It would shore up support in steel electorates and help the member for Throsby, Stephen Jones, and the member for Cunningham, Sharon Bird, who were elected with the Prime Minister on the lie of 'no carbon tax'. It is a lie we will never forget.

The Steel Transformation Plan was to get Paul Howes onside so he would publicly back the carbon tax. You only need to compensate somebody when you hurt them. If you do not have a tax, you do not have a need for compensation. In the Illawarra and in Wollongong, there are 4,740 mining jobs and 21,195 manufacturing jobs. Where is the assistance plan for these workers? The plan provides assistance to only two companies, the two biggest Australian steelmakers, BlueScope and OneSteel. It does not provide a cent to the remaining steel businesses that employ 80 per cent of Australia's steelworkers.

There are five basic flaws with this plan. Flaw No. 1: the only reason the plan is being introduced is to limit some of the damage caused to the steel industry. If there were not a carbon tax, there would not be a need for this kind of compensation in the first place. On 10 October 2011, Greg Combet admitted the establishment of the Steel Transform­ation Plan had been driven purely by the carbon tax when he said, 'The negotiation of the Steel Transformation Plan did come out of the discussions we've had with the steel companies for months now over the carbon price issue.' Flaw No. 2: only two firms qualify. Under the plan, only two firms—as I said, BlueScope and OneSteel—qualify for assistance because of the definition of 'eligible corporation' in clause 4 of the bill. In other words, this plan provides a re-run of the mining tax renegotiation debacle where a handful of big players were the only ones to benefit from Ms Gillard's alleged compro­mise on the original proposal. Every other steel business, including thousands of steel fabricators all over the country—many of them longstanding businesses that have operated in Australia for several decades—will not receive so much as a single cent of assistance under this legislation. Of course, while calculations of the precise numbers of businesses are difficult, we do know that in 2006-07 there were around 91,000 employees across the entire Australian steel industry chain. This is despite the fact that many such firms are currently facing an enormous range of costs and pressures which will only be exacerbated by the introduction of the carbon tax. This is not a plan for transformation of the steel industry. It is merely a bandaid to stave off the inevitable. As a rough estimation, BlueScope and OneSteel would now have something in the order of 15,000 to 17,000 employees. Flaw No. 3: the entire package could be exhausted within one year and one day of the introduction of the carbon tax. The plan provides for $300 million of assistance over the four-year period 2012-13 to 2015-16. However, this could theoretically all vanish within just one year and a day, because as much as $164 million can be paid out in advances before the carbon tax is even introduced and as much as $75 million can be paid out each financial year. In other words, you could have the situation where at least $150 million could be paid in advances and then the balance could potentially be paid out at any time during the first two financial years.

Even if the package does eventually last for around four years, there is also another fundamental question remaining: what is the government going to do to compensate BlueScope and OneSteel once the $300 million runs out? The so-called compen­sation through this plan is, as I said, just delaying the inevitable exposure of local steel production to cheaper, non-carbon-taxed steel imports.

Flaw No. 4: the amount of assistance available through the plan is completely dwarfed by the loss of share values of BlueScope and OneSteel since the announce­ment of the carbon tax. The government announced the establishment of the plan as part of the release of a range of details associated with the carbon tax on 10 July, yet that entire amount was wiped off BlueScope and OneSteel's combined share values on the stock market on the very next day, and then another $100 million on top of that was gone the day after.

Flaw No. 5: Labor cannot even get its own line straight on the plan. Various statements from Labor politicians, in government documents and on government websites, provide conflicting details about the length of time covered by the plan. Clause 12 of the Steel Transformation Plan Bill 2011 clearly states that the plan covers a four-year period. However, on 12 July, a joint media release was issued by Mr Combet, Ms Bird and Mr Stephen Jones, which stated:

… the Government will introduce a Steel Transformation Plan which will deliver assistance worth up to $300 million over five years to encourage investment and innovation in the Australian steel manufacturing industry.

On 29 July, Mark Dreyfus said the steel plan would provide assistance over five years, but official government websites say that the plan will operate over six years. Also, there is no explanation or requirement in the legislation forcing steel compensation recipients to reduce carbon emissions, despite numerous statements from the government that this is the primary objective of the bill.

Let me return to the Illawarra. This plan does not provide a cent to help the small and medium sized businesses that employ 26,000 people in the Illawarra in mining and manufacturing. I attended the meeting in the mall in Wollongong in July, with my colleague Senator Joyce, and was heckled by the usual union thugs dressed up as workers. We went to tell the people of the Illawarra that the coalition would not support the tax and we have shown them today that we are true to our word. We have voted against this tax. I told them then that I would be voting against the Steel Transformation Plan and that all it was was a sop to Paul Howes.

Only a month later, it was with a heavy heart that I learnt that BlueScope was reviewing its domestic steelmaking product­ion capacity. BlueScope Steel did not have to wait for the carbon tax to review its opera­tions. In its announcement to the Australian Stock Exchange, the company named the ongoing macroeconomic challenges of the high Australian dollar, high raw material costs and low price as the reasons for its write-down of $900 million. But, notwithstanding this, the Gillard government persisted with its carbon tax. The price of minority government for the Prime Minister is to give the Greens what they want. They wanted a carbon tax and they got themselves a carbon tax, but the Illawarra does not support a carbon tax.

I refer Senator Rhiannon to the IRIS Research Economic report September 2011—carbon tax, which I have mentioned before, which shows that only a mere 15 per cent of local firms surveyed support the carbon tax. As part of the September quarter Illawarra business survey, IRIS Research asked almost 300 local businesses about their feelings towards the carbon tax. Four out of five large businesses, 82 per cent, surveyed in the Illawarra do not support the carbon tax. Two-thirds of small businesses in the Illawarra are against the carbon tax. Almost three-quarters, 73 per cent, of medium sized businesses do not support the introduction of a carbon tax. What will the Prime Minister tell all of them next time she visits the Illawarra? What will Mr Stephen Jones and Ms Bird tell their electorates today? Will it be more crocodile tears, like the last time Ms Gillard visited? The businesses have lost confidence, just like Australian people have lost confidence, in the Gillard-Greens alliance government. More than two-thirds of local businesses in the Illawarra believe that the carbon tax will have a negative impact on them.

Is it fair? Is it justified? Judging by the lack of detail revealed by the government in this debate, it is hard to tell, but it did make a headline for Mr Howes to stand outside my office in Wollongong on 12 October and take the usual cheap shots that they do when they turn up a my office. Mr Howes threatened me. He said:

If MPs like Ms Fierravanti-Wells vote against the Steel Transformation Plan in the Senate, they should be run out of town.

Well, Mr Howes, I am voting against it, and I will just wait for you to turn up to my office again and see. Just try and run me out of town. I think you will have a problem. Of course, Mr Howes has not apologised for this threat, nor has the Prime Minister seen fit to reprimand him for his reprehensible behaviour.

The carbon tax will go on and on, but the steel assistance will run out. It will be reviewed by the Productivity Commission as part of its review of emissions-intensive trade-exposed assistance in 2014-15—another review. This government cannot get through a week without a review. It is either superconfident that it will still be in government in 2014-15 or it knows that the whole carbon tax and the steel assistance plan will be a debacle. Of course, the Productivity Commission is the govern­ment's default too-hard basket, as we have certainly seen in my own portfolio area of aged care.

Even before the carbon tax had begun, the Steel Transformation Plan was raided by a desperate government. If there was any doubt that the plan was just a slush fund to keep Paul Howes in his job, we need only turn to the fact that it took four ministers plus the Prime Minister to make the announce­ment on 22 August that the government was going to provide some practical assistance following the BlueScope Steel decision to reduce its operations. I quote:

These support measures are in addition to the new advance facility announced by the Government today that will allow BlueScope to bring forward up to $100 million of payments under the Government's Steel Transformation Plan.

In other words, 'Let's raid the Steel Transformation Plan even before it begins.' Of course, part 2, clause 5 of the bill allows an eligible corporation to apply to the minister for a payment of financial assist­ance—what is called the 'competitiveness assistance advance'—to help that corporation 'undertake activities that will significantly enhance the competitiveness and economic sustainability of the Australian steel-manufacturing industry in a low-carbon economy'. What a load of twaddle that is. But BlueScope and OneSteel are the only two corporations eligible for assistance. The money is supposed to make them more competitive. The so-called compensation offered through the plan just delays the inevitable exposure of local steel production, as I said, to cheaper, non-carbon-taxed steel imports. Take a look at the share prices of BlueScope and OneSteel. On 23 February, OneSteel's shares were $2.86. On 2 September, the price had dropped to $1.52. BlueScope's shares were worth $2.20 on 23 February. On 2 September, the shares were down to a mere 83c. Yes, the industry is under pressure now, and in Wollongong BlueScope has restructured, with over 1,000 workers being made redundant. But, as I said, only the two largest firms qualify for assistance, leaving thousands of other businesses not eligible to get one single cent.

As I indicated, from the coalition's perspective the carbon tax will not last a day under a coalition government. But it will last forever under this government—but the compensation will not. The Steel Transform­ation Plan Bill, in part 3, clause 13, says that the total amount of the planned payments must not exceed $300 million, and of course the money will run out. If all the money is gone by 1 July, which is theoretically possible, there is no more money available for industry assistance through the life of the plan. Talk about policy on the run to appease union mates. Some, more unkind than me, would call this plain old pork-barrelling.

But union bosses have not always had their members' interests front of mind. This chamber has heard various matters pertaining to the Health Services Union, and of course this is Labor's way. Again I quote Richo: 'whatever it takes'. Where is Peter Beattie in all of this?

Senator Ian Macdonald interjecting

Senator FIERRAVANTI-WELLS: Mr Beattie was appointed as the Resources Sector Supplier Envoy—what a name, Senator Macdonald—on $1,000 a day. We have not heard a lot from Mr Beattie lately. Perhaps the Greens will ask for an inquiry to gauge whether the resources sector is getting value for money with Mr Beattie.

While the demise of the steel-manufactur­ing industry looms in the Illawarra thanks to the Gillard-Green carbon tax, workers should sleep well knowing that their champion, Arthur Rorris, has been taking time to write to the President of the Senate informing him of a decision of the South Coast Labour Council of 17 August. So what was the most pressing matter consuming the South Coast Labour Council recently? Was it the continuing presence of the steel industry in the Illawarra, the ongoing success of manufacturing in the Illawarra or the effects of the carbon tax on mining in the Illawarra and the flow-on effect to workers? Surely it is one or all of the above! No. Mr Rorris, in his capacity as Secretary of the South Coast Labour Council, wrote to Senator Hogg to inform him of the council's 17 August response to the Senate's resolution on—wait for it—Palestine. I will not put on the record the nature of that correspondence, but that is right, workers of the Illawarra: your South Coast Labour Council is more interested in what is happening in the Middle East than in your jobs and your jobs going down the gurgler as a consequence of this carbon tax. Of course the Middle East is of importance, but the South Coast Labour Council should be worried about its members—its workers in the Illawarra—and the workers and families of the Illawarra. They want to know how this carbon tax is going to affect their lives. How will it help put food on the table and a roof over their head—or will it stop them from doing that?

This government has betrayed the workers and the families of Australia. It has betrayed the people who voted for it on the promise of no carbon tax. The people were lied to, and they have been hoodwinked by a Prime Minister and a government captive to the Greens, whose only interest is in social engineering. Today is truly a sorry day for Australia. Will the Steel Transformation Plan reduce carbon emissions? No, it will not. There is no explanation or requirement in the legislation forcing the two companies eligible for steel compensation to reduce carbon emissions in exchange for assistance. Of course, that is what Labor would have us believe—that every word in these bills is designed to reduce carbon emissions. That is what the Gillard government and the Greens have told us. That is what people think that they are getting, but they are not. As we have seen in recent days and throughout this debate, we are getting legislation from a government whose ministers are not across the detail. We are getting yet another grubby deal between the Greens and the Australian Labor Party. This was the price that Julia Gillard paid for the keys to the Lodge.

This has nothing to do with climate change. It is not about helping the workers of Australia. It is not going to help Australian families. It is certainly not going to help the steelworkers of the Illawarra. It is not going to help Australia, and it is certainly not going to help the planet. This is about one thing and one thing only. This is about a government that, true to its Australian Labor Party tradition, will always do—as its grand master, former Senator Richardson said to it—'whatever it takes'. If it takes a very big lie that is what they will do. That is what they have done. They did not even blink. The Prime Minister did not even bat an eyelid when she lied to the Australian public and told them, 'There will be no carbon tax under the government I lead.' Ms Bird in the Illawarra did not bat an eyelid when she went along with it. Stephen Jones, the member for Throsby, did not bat an eyelid when they were elected on a lie. We will make sure that the Australian public at the next federal election have a mandate on this toxic carbon tax. (Time expired)