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Thursday, 25 August 1983
Page: 336

Mr HOLLIS(9.11) —I should like to add my voice to the chorus of congratulations, sir, on your election as Deputy Speaker of this House and ask you to pass on my congratulations to the Speaker. I rise to speak in this chamber with pride-pride in representing the people of Macarthur and pride for the many people who worked so hard to put me here. The electorate of Macarthur is named after one of the capitalist rogues in Australian history, appropriate perhaps given what many consider today is a crisis of capitalism. It is not every member who shares this building with two of his predecessors. The honourable member for Werriwa (Mr Kerin) ably represented the people of Macarthur between 1972 and 1975. Consequently many of my constituents feel pride in his position in the Ministry. My immediately predecssor is also in the building as an adviser to the honourable member for Bennelong (Mr Howard). I only hope his advice in opposition is better than when he was in government, but I suppose he has to be seen to be doing something. I believe it is traditional in a maiden speech to extend thanks to many people-family, friends, political acquaintances, indeed all. I extend my thanks to the working class who put me here, for I am working class and proud of it. I come from no privileged background of wealth or position. I come from the working class that has built this country and my commitment to their cause is total. I am here as a voice for the unemployed, the retrenched, those whose fear is of losing their home and those for whom the lucky country is no longer so lucky.

I have listened with interest to the many maiden speeches made in the chamber and most mention unemployment. I invite honourable members to visit my electorate to see for themselves the result of this depression caused, in no small measure, by the wrong economic policies followed by those who now sit opposite. The proud Illawarra region has been brought to its knees through no fault of its own. I do not come here with a begging bowl, but I come to ask that this region that has given so much to the lucky country, that has helped build this country with Illawarra sweat and tears now receive consideration to help the region through its current economically difficult period. A start has been made with the recently announced steel assistance plan, but much more will need to be done for Australia's depressed industrial regions.

No sector of my electorate has been more devastated than the coal industry. It was only a couple of years ago that the resources boom was heralded as the solution to the economic problems of aging industrial regions like the Illawarra and the Hunter. New leases were granted to large energy corporations, governments were castigated by the coal companies for not constructing new rail links and coal loaders quickly enough and workers were attracted from other regions and sectors of the economy to the coal industry. It is obvious that the attempt to transform Australia from an industrial and post-service economy to a pre-industrial economy has been a disaster. Since 1982 there have been massive retrenchments in the coal industry and a number of pits have been closed or rationalised. Most retrenchments in the coal industry in New South Wales have taken place in the southern coalfields where 1,100 jobs have been lost in the industry since last year. There are now fewer miners in the Illawarra than at any time since the beginning of the resources boom. One cannot underestimate the effects of these sackings on miners and the population of the south coast and the Burragorang Valley and towns such as Camden, Picton and Tahmoor.

I am particularly concerned about the future of the Burragorang Valley. Only a few years ago, the Burragorang Valley mines were the most productive underground mines in Australia, with high output per manshift. They employed over 1,500 miners. Now the spectre of mine closure and massive retrenchments hangs over the valley. In the last year, till the end of June, coal production in New South Wales increased by 8 per cent, a significant increase given the severity of the current recession. Whilst open cut mining increased by a massive 33 per cent, production from underground mines actually declined by 2.3 per cent in New South Wales and by 10 per cent in the Burragorang Valley. By encouraging open slather in open cut production, which is short term and environmentally damaging, the long term existence of underground mining and thousands of jobs are threatened by the lack of a proper planning framework for resource development.

The situation today is worse than in the 1930s. It is virtually impossible to re-open underground mines once they have been closed. This was recognised by the small producers at the time, who carried losses until the industry was put back on to a profitable footing. Today, the large energy corporations that dominate the coal industry can switch their activities from industry to industry, region to region, and country to country. When difficulties are encountered with one group of activities, they can quickly close or rationalise the operation and shift elsewhere. The irony of the current situation is that, having encouraged multinationals to take great slabs of Australia's energy resources in the name of efficiency, the sterilisation and closure of productive underground mines will produce a wasteful and inefficient industry.

The resources boom panacea, with its promise of increasing the dependence of regions like the Illawarra on their traditional heavy industry and natural resource base, concealed the underlying structural problems confronting these regions. In the meantime, aging manufacturing plants were being shut down, small businesses were going bankrupt, and the service sector was being affected by the economic downturn. Whilst there was hope for employment growth by reverting to a pre-industrial raw material economy, debate on alternative strategies for employment generation was deferred.

Despite the warnings of resource development expanding too rapidly and the consequences of regional dependence on a narrow economic base, there are still those who argue that the present overproduction crisis in the coal industry is a small hiccup and we must concentrate our investments on preparing for the next resources boom. This is nonsense. If resource development is to bring opportunities for all Australians, there needs to be a detailed reassessment of the prospects of the resources sector, of the relationship between Australia, major international energy corporations and major customers, and of the mechanisms to share the benefits of resources development with all Australians.

As one of the few countries in the world without a national energy plan and direct public participation in resources development, Australia has been considered a pushover by energy multinationals. In the past decade, all the export pits on the southern coalfields have come under the ownership and control of multinational oil and mineral corporations. Although there has been increasing investment, management expertise and technology, multinational domination of the southern coalfields has also increased the vulnerability of the local coal industry to fluctuations in the international market and to the rapidly switching investment priorities of companies whose activities straddle State and national boundaries and involve interests in a wide range of industries.

I was very concerned that British Petroleum Co. of Australia Ltd, one of the largest corporations in the world, was allowed to take over 100 per cent of the Burragorang Valley mines. This contradicted all Foreign Investment Review Board guidelines and demonstrated the Fraser Government's concern with putting the short term interests of large energy corporations before that of miners and long term national interests. BP acquired half of the Olympic Dam project in the Roxby Downs from Western Mining Corporation Ltd to develop uranium reserves. On the other hand, Western Mining Corporation did not take out an option to buy 50 per cent of Clutha Development Pty Ltd from BP and this contributed to the financial problems of the Burragorang Valley.

I believe that the problems of the Burragorang Valley are yet another cost relating to the development of the uranium industry where the high rate of return lowers the attractiveness of other viable energy projects. BP was more concerned with its oil market, getting into uranium with Western Mining Corporation and its open cut interests in Australia to worry too much about guaranteeing the long term employment security of its underground mining work force and contributing to regional development. To divert attention away from its poor management, BP attempted to blame the New South Wales Government's rail transportation policy-despite the fact that local charges are about the cheapest in the world and 80 per cent of Burragorang Valley coal was transported by road- and trade unions at Port Kembla, despite the fact that, until the commissioning of stage 1 of the Port Kembla coal loader, there was a lack of capacity at the old loader. With the early completion of stage 1 of the coal loader, as a consequence of the commitment of the New South Wales Government and the co- operation of the trade union movement, problems of congestion at Port Kembla were quickly cleared.

My major short term concern in relation to the coal industry is to ensure the viability of the industry and stability of employment both in the Illawarra and nationally. The immediate establishment of the Coal Consultative Council by the Australian Labor Party on taking office demonstrates its commitment to becoming an active participant in the coal industry and to providing a framework for government, companies and trade unions to address the pressing problems facing the industry.

I have recognised for a long time that a resource rental tax is the most appropriate tax regime for an industry with a wide differential in costs and quality. By providing a cushion for more marginal pits with higher costs of extraction and increasing taxation on low cost, highly profitable pits, a resource rental tax would be an important contribution to stabilising employment in the coal industry, encouraging a better balance between open-cut and underground extraction of coal and ensuring that benefits of extraction of our greatest natural resource will be shared with the Australian people.

In addition to moving to a thoroughly thought-out tax regime in the coal industry supported by the industry, the Australian Treasury and most academic economists-in fact, by everyone apart from the Opposition-the Labor Government would avoid the blunders of the corporate handouts of the previous Government. Today we are faced with the most series crisis facing the coal industry since 1945. The Liberal-National Party Government, by giving away cheaply Australia's natural resources to every multinational that wanted a piece of the action, by encouraging destructive interstate competition, by plucking figures out of the air about future demand for coal and by refusing to involve itself in price and tonnage negotations with Japanese customers, facilitated an overproduction crisis of unprecedented proportions. This has benefited the Japanese and has not harmed the multinationals which have switched their attention to other activities, but it has done enormous harm to miners and the Australian people.

In response to the post-war crisis in the coal industry, the then Commonwealth and New South Wales Labor governments established the Joint Coal Board with wide -ranging powers over the coal mining industry. The public sector, under the auspices of the Joint Coal Board, became the vehicle for modernising the New South Wales coal industry and making the State's underground mines the most productive in the word. Unfortunately, over the years of conservative government , unfettered free enterprise became the order of the day and the Joint Coal Board became a shadow of its former self. Despite the fact that the legislation and the agency are still in place, given the dimension of the current crisis in the coal industry, there is now an opportunity to reconstitute the Joint Coal Board with broader representation from the community and trade unions and an assertion of powers over production and new leases. With the co-operation of the States and co-ordinated by the Federal Government, statutory coal authorities could impose rationality on the development of the industry and avoid the overexploitation of the industry as has happened in the past.

The events of the past few months have demonstrated the need for the Federal Government to intervene in price and tonnage negotiations, particularly when dealing with our major overseas customers. The queue of Australian companies lining up to deal with centralised Japanese customers and undercutting each other is a source of embarrassment and has done enormous harm to the Australian coal industry. In addition, we have often been told by our conservative counterparts that we must be more competitive with coal producers in other countries. However, it must be pointed out that, in many cases, the same multinationals are involved in different countries. The Australian coal industry is highly productive and a reliable supplier to world markets, but we must remove some of the uncertainty from the marketing of Australian coal. We need better guarantees of long term contracts with major customers before committing large funds to expanding industrial infrastructure for resource development projects.

Coal resource development involves a lot more than pulling coal out of the ground and marketing it. It is our most valuable natural resource and we must ensure that wastage from present extraction is minimised. The closure of pits, with potentially recoverable reserves, imposes severe long term costs on the community. Open-cut mining has a very limited life in Australia and within 10 to 15 years, open-cut mining will have passed its peak. The open slather given to open-cut operations is of immediate concern. The rip it out philosophy of the previous Liberal-National Party Government may lead to the sterilisation of millions of tonnes of valuable coal reserves. We have a responsibility, not only to present generations but also to future generations that finite natural resources are used wisely and not squandered.

I share the dream of a great son of the Illawarra, the late Rex Connor. Rex Connor had a dream of a national energy plan for Australia, of Australians owning and controlling the resources of this great country which are the birthright of every Australian. But we have seen our resources controlled not by Australians but by those who sit in the boardrooms of London, New York and Tokyo . We must claim our birthright. We must control our own resources for the betterment of all Australians, not to increase the profits of foreign multinationals. I make no apology for committing myself to this task.

The Illawarra has an underdeveloped services sector and a long-standing backlog of social infrastructure. There is a high proportion of low skilled workers and education levels are low by Australian standards. Youth unemployment in Dapto and Warilla Commonwealth Employment Service offices has been the highest for any major centre of population in New South Wales since the mid-1970s. Many have grown to adulthood without ever having regular employment. These are the young Australians who have been put on the scrapheap by Malcolm Fraser and his Government's disastrous management of the economy. This Federal Labor Government is determined to give these young people the opportunity to lead fulfilling lives and to find socially useful work.

The immediate problem facing the Illawarra is that, even if national economic recovery got underway within six months, the region would remain heavily depressed. There is no resources boom, high technology, or tourist-led recovery around the corner capable of creating the 25,000 jobs over five years that would bring unemployment in the region down to 5 per cent of its work force. Stimulation of the housing and construction industries will bring benefits to the region in terms of employment and housing. The steel industry plan will go a long way to stabilise employment in the region. But, in the longer term, there needs to be an economic program to revitalise the region, creating new jobs and new industries.

Australia owes a debt to the people of the Illawarra. Last year the working people of the region called to their fellow Australians: 'We want jobs'. They resisted the sack, stormed Parliament and marched on Sydney. They, through their actions, articulated the aspirations of millions of Australians-the right to work and live in dignity. The determination to make unemployment the major issue contributed to the defeat of the Fraser Government and its disastrous economic policies.

In conclusion, the Hawke Labor Government was elected to bring about a fair, just and humane society. The Australian people, and especially the people of Macarthur, gave us that mandate and we will carry it out.