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Thursday, 15 December 1983
Page: 3863


Senator CRICHTON-BROWNE(12.41) —We are debating the Steel Industry Authority Bill 1983, the Bounty (Steel Mill Products) Bill 1983 and the Bounty (High Alloy Steel Products) Bill 1983. I notice that the second reading speech accompanying the Steel Industry Authority Bill tells us that in return for the taxpayers' commitment of $350m to the shareholders and employees of the Broken Hill Proprietary Co. Ltd, plus the additional indirect costs of tariffs which were calculated by the Industries Assistance Commission to represent $150m for 1981-82, BHP will spend between $500m and $800m of its own money upgrading facilities. Each decision will, of course, be made on the conventional commercial criteria of reducing production costs and improving productivity, product quality and customer service. That figure is a great deal less than was spent in the four years to 1981-82 without such promises of assistance of taxpayers' funds.

For their part, the unions have agreed that wages for the industry's work force will be consistent with the prices and incomes accord. In other words, the unions' contribution towards its share of the $350m is to undertake to honour an agreement previously made. They have further undertaken to increase productivity to levels of man hour output which they have not previously worked, notwithstanding that in the four years to 1982 BHP invested $355m with the primary purpose of improving labour productivity only to see it decline. The Minister for Industry and Commerce (Senator Button) referred in his second reading speech to a target of re-establishing a productivity level of 250 tonnes per employee per annum in the major steel works. I can find no evidence of that level being previously achieved.

The essence of the Government's proposal is to continue to prop up an inefficient and technically outdated steel industry which has grown lazy, uncompetitive and incompetent. It is an industry which previously has been happy to lurch along behind the barriers of protection and quotas, ever mindful that it was in a monopoly situation in Australia. Senator Button's second reading speech talks of the steel industry plan reflecting the Government's commitment to the maintenance of a viable and efficient steel industry in Australia. That, of course, is a contradiction in terms. The steel industry in Australia, as has been clearly demonstrated in the IAC report on the subject, is not efficient. In fact, on the evidence given to the Commission and by comparison with other steel producing countries, Australia's steel industry is far from efficient. To suggest that it is viable is absurd. According to BHP, in its submission to the IAC, the minimum protection needs for continuation of the industry were a guarantee of 85 per cent of the domestic market through tariff quotas, with a penalty duty of 150 per cent on imports. That means that, if BHP is to be competitive with overseas producers, imported steel would have to attract duty which would make it 150 per cent more expensive than it would normally be. Mr Deputy President, it being 12.45 p.m., I seek leave to continue my remarks later .

Leave granted; debate adjourned.