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Wednesday, 14 December 1983
Page: 3815

Senator CHANEY (Leader of the Opposition)(10.48) —The Senate is debating a series of Bills-the Steel Industry Authority Bill, the Bounty ( Steel Mill Products) Bill and the Bounty (High Alloy Steel Products) Bill-which relate to one of Australia's major basic industries. Our steel industry is, of course, based on Australia's great resources of both coal and iron ore. I preface what I want to say about these Bills by expressing my regret and the regret of the Opposition that Senator Peter Rae, who is the Opposition shadow Minister for Industry and Commerce and who is responsible for policy for the Opposition in this area, is not able to be in the Senate today because he is recuperating from an illness. For that reason I have the conduct of these Bills on his behalf.

The Opposition will not oppose these Bills, but they raise a number of issues upon which I wish to touch. I do not suggest that at this stage of the session we will be able to have a full-blooded debate on the steel industry and the other issues which arise because time is too limited to permit that. Because the Opposition is not opposing these Bills I suppose that sort of debate is not absolutely necessary in any event. However, I wish to acknowledge the importance of the steel industry in the view of the Opposition.

It is important to us for defence reasons; it is important to us because of its effect on other areas of manufacturing industry. Indeed the Opposition would say that decisions taken to protect the steel industry and decisions which affect the access of Australian industry to the various types of steel that they need and at the price that they have to pay are very important to those other areas of industry. We cannot look, from an industry viewpoint, simply at the welfare and health of the basic iron and steel industry. It is important for employment reasons. It is a major employer although I think that employment has dropped by some 10,000 over recent years because of the decline in demand for steel in Australia and the declining opportunities we have had for exporting steel. Of course it is of major regional economic importance particularly in the three main areas of Newcastle, Wollongong and Whyalla.

I refer to the statement made by the Minister for Industry and Commerce ( Senator Button) who is in the chamber at the moment. He announced the steel industry plan on 11 August and made some comments in the early part of that statement with which the Opposition would certainly agree. He said that to regain its internationally competitive position the industry would have to reduce its relative production costs significantly. The Government on its own could not ensure the necessary cost reductions. He went on to say that all interested parties, including the industry, the unions and relevant State governments, had a role to play in achieving these reductions. I think those comments are apt. The Government was correct in seeking to involve all of those parties-the Government, the industry, unions and relevant State governments-in trying to achieve reductions in costs which were necessary for the long term health of the steel industry in Australia.

I want to touch on the role which each of those areas has to play. I will mention some of the misgivings that the Opposition has about whether the package presents a complete solution to the problems which the steel industry has faced. I also want to touch on the question of fast track dealing with the possibility of dumping. I refer to it now because it is a discrete item in the package. Part of the steel industry package announced by the Minister for Industry and Commerce was that there would be fast track anti-dumping arrangements for the steel industry. Senator Peter Rae has on a number of occasions in questions and in debate raised with the Minister the precise arrangements which the Government has in mind. I refer to the answer which was recently provided by Senator Button to Senator Rae to question No. 340 where, in part, the Minister stated:

There is no intention to announce the new 'fast track' anti-dumping procedures in relation to the steel industry. They will be activated by the Steel Industry Authority when it is appointed and following the introduction of the steel industry plan on 1 January 1984.

There is some concern on the part of the Opposition that there is some cloudiness, some lack of detail available to us in what is involved in the fast track anti-dumping procedures. Obviously the whole question of anti-dumping activity is of some sensitivity and involves the General Agreement on Tariffs and Trade anti-dumping code. I raise that matter with the Minister as I believe the Government could be more forthcoming in helping us to understand precisely what it is doing with respect to the totality of the steel packages.

I turn to the contributions which are being sought from the various participants under the steel package of the Government. I want to demonstrate why we think there are some elements of the package which lead us to say that it has some stop-gap elements about it. For example, it is apparent that the package does not guarantee that Australia would have an internationally competitive steel industry at the end of the plan. I say that because the plan includes some commitment for further investment with Broken Hill Proprietary Co. Ltd being committed to a firm capital investment of $500m and a further likely investment of $300m. This total of $800m is about a quarter of what BHP told the Industries Assistance Commission was necessary between 1985 and 1995. I realise that the plan does not run over that full 10-year period, it runs for only half of it. I simply say that we are left in the situation that whilst there may well be some very welcome further investment by BHP, it does, on the company's own assessment, appear to fall short of what the company thought was necessary to guarantee the sort of steel industry which Australia needs.

As far as the unions are concerned, we find some real value in the package. Again, we do not in any sense argue with the Government's involving the trade unions in this very important area. I quote Senator Rae's initial response to the package. He said:

The best thing that can be said for it is that the productivity undertakings represent, potentially, a major breakthrough.

He went on to say:

Although there is virtually no sanction, there has been a recognition by the trade union movement that, without productivity, protection by way of bounties, quotas, tariffs, and the like, can create a dangerous illusion, leading to the destruction of competitiveness of industry, and thereby its long-term existence, and the jobs which it provides.

He went on to say:

It is most encouraging to see that the trade union movement is recognising that the quid pro quo for protection must be productivity increases.

I thoroughly adopt those words of Senator Rae and believe that that is a positive element of what the Government is seeking. The concern the Opposition has, however, is what is being offered by the unions and whether it is adequate. The Government has also put in the package a provision that the unions will receive wage increases in line with the community standard. It has sought to restrict the industry to that provision. But the fact is that that involves the 4.3 per cent wage increase for the first six months of this year and full wage indexation beyond. It appears to the Opposition that that has the potential to lock the steel industry into a current situation of unprofitability and lack of competitiveness. I understand the sort of reasons which have been argued by Senator Button often enough in this chamber as to why the Government believes that that is a minimum sort of arrangement which ought to be entered into. But the fact is that the world steel industry is in difficulty. In the United States , for example, steel workers have seen and accepted the need to accept a 9 per cent cut in wages because of the competitive position of their industry. I think that is fair enough.

Senator Button —Twenty-five dollars a week.

Senator CHANEY —I simply raise that as a comparable response to a similar real difficulty in the industry in another country. Steel workers in the United States have made other concessions which are certainly more substantial than those made by unions in Australia. Again, I do not think this is the debate in which to canvass these issues at length. I raise them because I think that generally they go to the question of whether we have a long term arrangement which will enable the Australian industry to become fully competitive.

I touch now on the role of the States. We have heard some rather confusing statements in this chamber because the Government has suggested in its package that the States have an important role to play. The States are to make a contribution to the plan in relation to the containment of State charges and to otherwise ensure that they contribute to the health of this industry. On the information which is publicly available it appears that to date nothing has been forthcoming from either the New South Wales Government or the South Australian Government. The Minister is on record as saying that he considered the New South Wales contribution to be important yet in answer to a question in the Senate from Senator Peter Rae he said that the contribution was not significant. Indeed , I do not think that anything at all has been said about the contribution of South Australia. I think that during this debate we should ask in what sense are the States prepared to live up to their role in this arrangement and what contribution will they be making to the continued health of this industry when in fact they are imposing heavy charges on it. In the same way, this Government has increased its charges on the industry by increasing sales taxes and excises. Again, that seems rather inconsistent with the general thrust of the package.

So in each of these areas, in the contribution of the industry and the level of investment which is to be made and the contribution of the unions and of the States, we see problems. They give rise to some doubt in the collective mind of the Opposition about the efficacy of the total package. Having said that, we do not oppose the legislation. We think that there are very positive elements in it . We hope that it will restore the health of the industry. It is our judgment, however, that the success of the package is very dependent upon general economic growth in Australia and a general improvement in the economic situation. Should there be any faltering in that area we would have some doubts that the objectives of the Government will be achieved by the legislation it has laid down.

Debate interrupted.