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Tuesday, 8 November 2011
Page: 8575


Senator THISTLETHWAITE (New South Wales) (17:48): I of course support the Steel Transformation Plan Bill 2011 because I support the ongoing viability of an Australian domestic steel industry. I also support steelworkers, their families and their communities. I have seen just how important BlueScope Steel, this wonderful steelmaking facility, has been over the generations for the Illawarra, in providing support for the economic, cultural, social and sporting development of that wonderful region of the state of New South Wales.

I also believe that as an economy, as a people, we can make a transition to a clean energy future whilst at the same time maintaining a viable steel industry and, indeed, viable industries of production in manufacturing throughout this country, continuing to produce high-quality steel for sale in both domestic and export markets and investing in new technology and new production methods.

I have watched this debate with interest this afternoon and I have found the contributions of a number of opposition senators in this debate highly amusing—highly amusing because they pinpoint their inconsistency and their downright hypocrisy on this issue and other important policy areas. I found it particularly amusing that Senator Cormann got up in this place and sought to criticise the government for putting this set of bills forward. He claimed that it was a massive, unjustified subsidy to the steel industry in Australia. Well, if you want to talk about massive, unjustified subsidies, you need look no further than the coalition's direct action policy: an $11 billion massive, unjustified subsidy to the biggest polluters in this country, an $11 billion handout on a whim, in the hope that those polluters may reduce their emissions over time. There is no investment at all in incentives for other producers to reduce their emissions.

Then we had the inconsistency from Senator Macdonald in his contribution to the debate, railing against the Labor Party saying that we are supporting—(Quorum formed) As I was saying, Senator Macdonald's inconsistency on this issue is highly amusing because he came into this chamber and railed against the Labor Party with this bill, attempting to claim that through this Steel Transformation Plan we were supporting the big end of town and ignoring the smaller producers and smaller companies in this country. If you want an example of a party supporting the big end of town and ignoring the welfare of the wider community, look no further than the refusal of those opposite to support the minerals resource rent tax, which is squarely aimed at ensuring that the big miners—'the big end of town', as Senator Macdonald calls it—in this country pay their fair share and that the revenue that is generated from that proposal is redirected to supporting superannuation entitlements for workers in this country, tax breaks for small businesses, and infrastructure in rural and regional communities.

The Australian steel industry has a very long and proud tradition of growth and innovation. It is an industry that is vital to our economy. It has been said that the use of steel increases proportionately to the development of the standard of living of a country, and we need to look no further than our major trading partner, China, to see evidence of that fact. In 2006-07, the industry employed 91,000 workers and had revenues of $29 billion. But, despite these impressive figures, the Australian steel industry is facing uncertain times. High exchange rates and lower growth rates in the Australian construction industry are taking their toll. And this economic susceptibility was highlighted in August this year when OneSteel announced a loss by its steelmaking division of $185 million for the 2011-12 financial year before interest and tax. At the same time, the company unfortunately also indicated that they would shed 400 jobs across the country, half of which would come from its steelmaking operations. Then unfortunately, just days later, came the announcement of BlueScope Steel that, following a $1 billion loss, it was exiting the steel market for export to focus on the domestic steel market.

Australian steel is also said to be in an area of the Australian economy which is more exposed and less able to pass on the impact of the carbon price than others. That is why the government has taken note of these devastating consequences and areas of weakness and, more importantly, has responded in the form of the Steel Transformation Plan Bill to ensure the future of this great Australian industry.

The Steel Transformation Plan will help the steel manufacturers to restructure their businesses in order to assist the industry to be viable and sustainable in Australia. The object of the bill is to encourage innovation, investment and competitiveness in the Australian steel manufacturing industry, to assist the industry to transform itself, to transition into a clean energy future—into an efficient and economically sustainable industry in a low-carbon economy. The plan will achieve this in a way that improves environmental outcomes and promotes the development of workforce skills. The plan provides assistance to participants for investment in eligible research and develop¬≠ment, plant and equipment, and productivity.

The bill contains two elements. The first element provides support through a competitiveness assistance advance of $164 million for 2011-12. The second provides for a $300 million entitlement self-assessment scheme over the five years from 2012-13, and entitlements under this element will be reduced by the value of any competitive assistance advance payments.

There has been some debate and, indeed, some confusion amongst those opposite regarding how many years the Steel Transformation Plan will operate—that is, in which financial year it will conclude. The plan will operate over six payment years from 2011-12 to 2016-17. There is no confusion about the term of assistance under the $300 million plan. As was announced on 10 July 2011, payments under the self-assessment component of the Steel Transformation Plan will be made six months in arrears. Therefore, the eligible activity period will be a four-year period from 2012-13 to 2015-16, whereas the payments period is for a five-year period from 2012-13 to 2016-17. As announced on 22 August 2011, the competitive assistance advances will also be available in 2011-12. So, accordingly, both elements together under the transformation plan will be made available over six payment periods of six years from 2011-12 to 2016-17. This Steel Transformation Plan Bill, along with other elements of the clean energy future legisla¬≠tive package, demonstrates the government's commitment to securing the future of this strategically vital sector within the Australian economy whilst transitioning to a low-carbon economy.

It is also encouraging to hear words of support from the industry itself, thankful that the government have responded to help them move forward into a more sustainable, productive and prosperous future. BlueScope Steel has praised the government for recognising the company's longstanding call for a sectoral approach to the carbon tax. The company's managing director and chief executive officer, Paul O'Malley, said:

The Government has listened to our arguments and our deep concerns about the carbon tax. In the STP—

the Steel Transformation Plan—

it has produced a package that, if implemented as explained to us, deals with the steel sector's carbon tax issues in a significant way for the first four years.

This is a ringing endorsement of the government and its clean energy future package and the associated support mechanisms for industry, in particular the steel industry.

OneSteel have also indicated that they support this plan, calling it both appropriate and sensible. A company spokesperson for OneSteel said:

Through this sectoral approach, and in particular the announcement of the STP, our concerns about the adverse impacts of the proposed carbon tax on our competitive position have been recognised and substantially addressed ...

The Australian Workers Union, the representative of steelworkers in this very important industry, has recognised the plan's design to protect local jobs. The AWU is quoted as saying:

We’re pleased to see that the Government has worked with industry and the AWU to design a number of specialist programs to secure the jobs of our members and support our industries as the global economy shifts towards new energy sources. These multi-billion dollar programs have been welcomed by many of our major employers. In particular, the steel sector has secured a massive win with the $300 million Steel Transformation Plan.

The plan is of course designed to protect jobs in one of Australia's most fundamental industries. It is proof of the government's responsible approach to ensure a smooth transition to a low-carbon economy.

There have also been claims in this debate that other stakeholders in the steel industry and the manufacturing industry are not being supported. This is not true. The government are supporting small and medium sized enterprises through the Clean Technology Investment Program, which the coalition unfortunately oppose. The new, $200 million Clean Technology Food and Foundries Investment Program will provide grants of up to $50 million over six years to the metal-forging and foundry industries. These grants will assist the industries investing in energy efficient equipment and low-pollution technology processes and products. Again, this was opposed by those opposite. The government are supporting small to medium sized enterprises through Enterprise Connect, from which the coalition are proposing to cut $100 million. The government are also supporting and recognising small to medium sized enterprises through our push for an Australian industry involvement in major projects and through the activities of the Steel Supplier Advocate.

In all respects, this bill is fundamental to Labor's plan to ensure businesses have support to transition from an industrial age based on technology and production methods associated with harmful carbon pollution to a clean energy future, and to do it in a manner that protects investments and jobs, and ensures incentives to invest in new innovative practices and in new innovative technologies. Importantly, it will provide the foundation for economic growth into the future and support for this vitally important industry. The last thing that this government want to do is threaten the livelihoods of hardworking Australians in an industry where they earn their living and in an industry that has a great tradition in many regions throughout the country. It is through packages such as the Steel Transformation Plan that we are putting our money where our mouth is and supporting industry. We are looking forward to a brighter, more sustainable future for this great Australian industry.