Harry Jenkins (Speaker) Share this | Link to this | Hansard source

I have received a letter from the honourable member for Indi proposing that a definite matter of public importance be submitted to the House for discussion, namely:

The adverse impact of the carbon tax on Australian manufacturing.

I call upon those members who approve of the proposed discussion to rise in their places.

More than the number of members required by the standing orders having risen in their places—

Sophie Mirabella (Indi, Liberal Party, Shadow Minister for Innovation, Industry and Science) Share this | Link to this | Hansard source

It is a week to particularly focus on the crisis that is taking hold in the manufacturing sector. One would think that, at a time when there are so many cost pressures making our domestic manufacturers less competitive against our export competition and against imports, this would be the last time that the government would actually introduce an additional cost of production to manufacturing in Australia in the form of a carbon tax. But what do we have? This government seems to be living in absolute denial on some weird, perverse land on top of the faraway tree, because in the electronic version of the Australian printed out at 2.49 this afternoon the heading is 'Julia Gillard links carbon price to a 'bright future' for manufacturing.' The Prime Minister must be the only person in the country, other than some deluded Greens on the other side of this building, that actually believes that a carbon tax is going to be good for manufacturing.

What we have not heard from the Prime Minister is whether she agrees with that so-called great Labor Treasurer she keeps leaning on, that great so-called reformist Paul Keating, because she refers to all those reforms undertaken by the previous Labor government, not the Rudd Labor government, in trying to link her carbon tax to the reforms of that government and to create some sort of equivalence. In fact she has even tried to link it to the tax reforms of the Howard government. What we have not heard is the Prime Minister saying whether she agrees with Mr Keating when he said on Lateline last month that the new green industries are service industries not the old manufacturing industries. Manufacturing has moved to the east. The service industries are now the new growth industries. We need to hear from the Prime Minister whether that is in fact her view and whether that is in fact the view of the government frontbench.

They seem to be mouthing platitudes about supporting manufacturing, but every single time a manufacturing business or an industry association tries to outline the problems with this carbon tax they are either ridiculed, abused or ignored because there is a frustration in the government. We saw it last week with the member for Isaacs, who was a professional advocate in a former life, who came to this place and was given the very special job of Parliamentary Secretary for Climate Change and Energy Efficiency, presumably to argue the case for a carbon tax. He was unable to convince not only many people in his electorate—I know I was there last Saturday with Senator Fifield and the member for Higgins—but others in the broader Australian community. We see the Labor Party members turn to nasty, vindictive ridicule and mockery.

Yesterday, we had the member for Grayndler make fun of those Australians who had taken time out from work or time out from their farms to come to Canberra and express their anger and frustration with this government. It was not just to do with the carbon tax; it was to do with every single policy area that this government has touched, because we know it turns to the proverbial. Whether it is school halls, pink batts, the carbon tax or the mining tax, these people are sick of it. These people are sick of a government that no longer governs. It is a misbegotten government desperate to survive. It has resorted to ignoring the plight of industry and ignoring the plight of manufacturers.

For so long the Prime Minister has been telling us that we are behind the world. For so long she has been telling us that we have to keep up with the world and that China is forging ahead in leaps and bounds with their carbon tax, and yet in question time she could not even nominate the current carbon tax proposals in China. We see the desperation of the Treasurer trying to justify the existence of this government with a pathetic performance and not one reference to the real world situation out there in manufacturing.

What is happening is that on average we have seen 620 jobs lost each week in manufacturing during the last three years. That is more than 105,000 manufacturing jobs lost over that time, and around one in every 12 manufacturing workers across Australia has lost their job since the Labor Party came to power. We might hear from the other side, 'That happened under your government as well.' Actually, no. This was after 13 expansions in activity during the final 14 months of the Howard government. Labor simply do not understand manufacturing and the strategic importance of having domestic manufacturing capability, and they have no serious plan for its vision or its future. In fact, that very famous self-styled faceless man, Mr Howes, was reported in today's papers as saying, 'Bailouts and calling the ambulance is fine and we appreciate that support but I want our government and our country to be proactive, to actually look forward and say: are we going to be a country which makes things?' It goes on to say: 'He called for a long-term visionary plan for the Australian steel and manufacturing sector.'

Wouldn't you think that a bloke, the head of a union that represents steelworkers would actually put someone in as Prime Minister—use his numbers, use that great political power behind closed doors—who understood the importance of manufacturing, who actually had a vision for manufacturing in this country? Again, it goes to illustrate the shallowness in the frontbench and in the Prime Minister when it comes to understanding industry and the impact that the prospect of a carbon tax is having on them now.

Yesterday at a press conference we had the Prime Minister, Minister Carr and the Treasurer. The Prime Minister and Minister Carr were asked yesterday what they have done and what they were doing for manufacturing beyond the specific announcement regarding BlueScope Steel. Rarely in politics have I seen a more embarrassing encapsulation of a government in complete ignorance of such an important sector of the economy. It was cringing to watch. The Prime Minister fumbled for an answer before finally settling on green cars and cooperative research centres—that is right! Green cars and cooperative research centres. She has not only cut the cooperative research centre program twice in the space of her first year as Prime Minister and put the very viability and future of a number of those CRCs at risk, but also abolished her entire green car program worth hundreds of millions of dollars and without any warning to the industry whatsoever.

So it is not just the adverse effects of the carbon tax. The carbon tax and the manner in which the government has tried to implement it colour every approach they have to other policy. We have heard from manufacturing about the problem with sovereign risk. We saw car manufacturers sit down with a Labor Prime Minister, they opened up their books, they were told to commit to investment in Australia and the Labor government would co-invest. They did that through the Green Car Innovation Fund. Guess what? After the election, without any consultation, without any warning and having made those commitments to international companies that opened up their books and trusted this government, they just cut funding. No wonder manufacturing in this country is under siege when those who supposedly negotiate with the government, liaise with the government, cannot even trust their word. The approach to the green cars has been so bad that the issue of sovereign risk is a serious consideration for those wanting to invest in manufacturing in Australia. And yet, those are the Prime Minister's two key manufacturing policies—basically the sum of her total manufacturing vision for Australia.

And it does not get any better when we look at what Minister Carr said to the same question. Do you know the first thing he mentioned? The first thing he mentioned was that he had changed the name of the department. That is right! What have you done for manufacturing? I changed the name of the department. How imaginative was that! That was the biggest achievement to pop immediately into his head after so many years as the industry minister. The sad part is that the answers are actually grounded for once in reality because they have done absolutely nothing for manufacturing in this country except seek to fulfil the words of their mentor, of their hero, Paul Keating. They do not really want manufacturing left in this country. That is why they will not do the hard work to have the policies and the framework to ensure that Australian innovation and Australian investment in manufacturing can continue. Minister Carr also said that it was important to ensure that we had a steel industry in Australia and that the industry have the capacity to restart operations. Presumably, he meant they could restart export operations, because BlueScope has essentially ended their export industry. How can the domestic industry have the capacity to ramp up when the dollar is in a more favourable position for them and when Australian manufacturing is going to be imposed with yet another cost to production? It is another cost to making steel in Australia that will not be borne by steel that is imported from other countries. So how smart is the minister when he says, 'Oh well, one area of business for BlueScope has gone, but we want to make sure it survives in Australia so it can ramp up and possibly be exporters'? How is that going to happen, Minister, when there is no vision or outline for reducing the cost of production to the Australian steel sector and when in fact you want to impose an additional tax on Australian steel making?

Yesterday the government was arguing that the announcement of BlueScope steel had no connection with the looming threat of a carbon tax. Why is it raiding the very fund that it set up and designed specifically to deal with the impact of a carbon tax? Why is a scheme that, according to its own fact sheet, has been set up to stimulate industry 'investment, including on the acquisition of new or upgrading of existing plant equipment' being used in a case where the reverse is actually true? It is because the government really does not know what it is doing. It is fumbling from problem to problem. In the next few weeks when we have more announcements from innovative Australian manufacturing companies that will not be good news for their workers and the economy, we will have no direction and no vision from this government.

What does this government do? It demonises people. We saw the demonising of protesters against the carbon tax yesterday. The AWU boss said on 21 August that the steel industry in Australia had not innovated since 1983. He referred to the ineptitude and the lack of vision in his own government and his own Prime Minister. He is now so frustrated and angry that he is trying to blame industry, but this is obvious nonsense and it was designed to unfairly demonise the steel industry. When you look at the facts you see that since 2002 BlueScope alone has invested more than $2½ billion in capital equipment.

What does the Parliamentary Secretary for Climate Change and Energy Efficiency do in his electorate? In early August, he turned up at the AGM of the South East Melbourne Manufacturers Association, and when one business owner said to him that their electricity bill was going to increase by $120,000 the barrister, who lives in the seat of Higgins, not Isaacs, said, 'Oh, that's a modest increase in prices.' The arrogance and the inability of this government, this executive, to break out of its own bubble has led to this devastating carbon tax and is leading to policy paralysis that is endangering the viability of many decent Australian businesses.

There was another business owner who explained to the parliamentary secretary that to stay in the market, as they had explained to me, they only made a profit of $15 for an item they exported to Germany. Do you know what the parliamentary secretary said? He said, 'Well, obviously you have other problems in your business,' not that it was the failure of this government in imposing additional costs, in not having vision for productivity or in not having any vision for this economy. We see it right across food processing with the additional costs to Nestle, Murray-Goulburn farmers and all sorts of manufacturing and agriculture across the country. (Time expired)

David Bradbury (Lindsay, Australian Labor Party, Parliamentary Secretary to the Treasurer) Share this | Link to this | Hansard source

I am very pleased to contribute to this debate on the question of the impact of the carbon tax on Australian manufacturing. I was interested to hear the comments of the member for Indi, who has taken it upon herself to try and become the scary face of the scare campaign that has been waged against the government's efforts to price carbon. I know that that campaign she has been waging along with her leader is a campaign that has even brought her into my neck of the woods in Western Sydney. I saw recently that she visited Western Sydney—not my electorate, but a manufacturing business in Girraween. I became aware of this from reading the Parramatta Advertiser on 22 July and I think it is important that I share some of the quotes from that article with the House. The shadow minister, along with Senator Payne, visited a business called C-Mac Industries in Girraween. I see that the member, who had returned for my comments, is now scurrying away from the chamber. I can understand that she would not want to hear—

Mrs Mirabella interjecting—

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

The member ought not to interject from the doorway. The Parliamentary Secretary to the Treasurer has the call.

David Bradbury (Lindsay, Australian Labor Party, Parliamentary Secretary to the Treasurer) Share this | Link to this | Hansard source

what was reported in the Parramatta Advertiser, but I will read from that article. It says:

As general manager of the family sheet metal manufacturing company, started by his father Clive in 1966, Mr McMaster has survived tough times by careful management.

It goes on:

When federal shadow minister for industry Sophie Mirabella and Liberal western Sydney Senator Marise Payne came a-knocking to tell him the downsides of the government's planned carbon tax, Mr McMaster seemed more concerned over land and payroll taxes.

"It all adds up, I suppose, but I don't think the carbon tax will have the same impact on me as land tax"—

Mr McMaster says. He goes on:

"I pay $30,000 a year in land tax and $6000 a month payroll tax, which means I have to work one month a year to pay that.

The article also says:

"Everyone has a different opinion (on carbon tax) but I don't see it impacting too much," Mr McMaster said.

But Ms Mirabella and Senator Payne told him that "every time you switch on a light, you will be paying".

So don't worry about what Mr McMaster thinks; Ms Mirabella and Senator Payne are going to tell him what the impact is going to be. That is what you do when you visit a business and the questions you ask do not deliver the answers that you are looking for: you start to put words in people's mouths. In the article Ms Mirabella goes on to say:

"Predictions of how the tax will affect people—

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

The honourable member for Indi, is her title.

David Bradbury (Lindsay, Australian Labor Party, Parliamentary Secretary to the Treasurer) Share this | Link to this | Hansard source

The member for Indi goes on to say:

"Predictions of how the tax will affect people have not been spot on but businesses will cop more costs, forcing some of them to move production overseas …

That is mere assertion, with not one ounce of evidence to support that proposition.

We heard the member for Indi a little earlier in this debate say, 'It is very simple: if you impose a cost upon a business that is not a cost that is imposed on a business elsewhere in the world then that business will shut down and relocate.' So my simple question—and I think this is a question Mr McMaster would be interested to hear—is this: what is the land tax and payroll tax that is being imposed on people elsewhere in the world? And if indeed there are countries in the world where there is not the same payroll tax and land tax that is being imposed by the O'Farrell government in New South Wales, then why is it that this business has been able to continue to operate within New South Wales and Australia?

I must say I am looking forward to the member for Indi and Senator Payne commencing their campaign against these great big taxes on everything—the great big tax on payroll, the great big tax on land. If they were going to have an even more profound impact than the carbon price, as Mr McMaster has suggested, then you would have thought that the federal opposition, so concerned about the competitiveness of industry and the cost of living, would be waging a campaign against Mr O'Farrell's land tax and payroll tax. I have not heard that campaign yet but I look forward to it and I will join with the member for Indi and Senator Payne in that campaign.

The member for Indi has come into this place and talked about the crisis in manufacturing. This is further evidence that people on that side of the chamber are more concerned with talking down the economy and talking down industry than chipping in and trying to assist industry to cope with the challenges that they face. We all know the nature of those challenges—in particular, the rising dollar. If you look at all the commentary that has come from those who have made some of the decisions that are the subject of the discussion here, you will find that they have all cited the high dollar as having the major impact—no suggestion of a carbon price. It is disingenuous to come into this place to allege that an impost that has not even been passed by the parliament, let alone levied, has in fact led to these impacts, when the businesspeople who are making these decisions at the coalface have acknowledged that the impacts are more about with the value of the dollar than any government policy or any other factors.

I note that the member for Indi was interviewed on radio today. She was asked some questions about Tony Abbott's efforts in proposing to cut $500 million worth of assistance to the car industry. That seemed to be something that the member for Indi was not aware of. I know she is only the shadow minister, but you would think she would be aware of a proposed half-billion dollar cut to the car industry. The interviewer went on to ask some questions, and the member seemed a little bit sheepish about it all. Then the host said:

But five days ago Tony Abbott did commit to that policy.

The member for Indi said:

Well, there you go. But this is not a single-bullet solution.

There you have it. At a time when we have, according to the member for Indi, a crisis in manufacturing, she is talking down the economy and talking down manufacturing with all her talk of a crisis. It is so much of a crisis that the opposition's panacea is to rip the guts out of an industry assistance program—half a billion dollars out of an industry assistance program. That is going to help! What sort of crisis are we going to have when we finally allow the member for Indi to have some influence on government policy in this space? She visited Mr McMaster in Girraween and was told, 'Really, the carbon price is not the big issue you're trying to scare people into thinking it is; the bigger issue is actually land tax and payroll tax, and if you really wanted to represent me as a manufacturer in Western Sydney you'd stand up and take on Mr O'Farrell—but, sorry, he happens to be in the same political party, so we won't do that; we'll beat the carbon drum.' And that is what they have been doing.

When the proposal to cut this $500 million from the automotive industry was announced, the Herald Sunreported:

"It removes the additional assistance to the motor industry that the government has provided largely through the stimulus package," Mr Abbott told reporters in Canberra today.

Oh, the stimulus package! It is no wonder Mr Abbott wanted to rip away that half a billion dollars; it was part of the stimulus package that he spent the last couple of years telling us we did not need. Well, go and talk to people in Western Sydney and see what they think. I hope, when the member for Indi goes round on her carnival of fear—her scare campaign—that every time she visits a manufacturer she asks them, 'What would have been the impact on your business had the government not acted to stimulate the economy?' The government provided things like the business investment allowance, which many manufacturers in my electorate took advantage of. They invested in some very heavy machinery and equipment as a result of the very generous tax arrangements under the business investment allowance. So, when the member for Indi goes around and tries to scare people—as scary as the prospect of her knocking on someone's door and coming in unannounced is—by telling them that they will be wiped off the map, that their business is going to have to shut down because this carbon price is coming in, she should also be honest with them about the electricity costs that they currently face and she should outline what her plan is to reduce those costs.

We know that there are many, many businesses out there that are facing the challenge of rising power costs, and when we talk to those in the investment community about why they will not invest in new generation capacity, they all come back to the same thing. They say, 'We will not do it because of the uncertainty due to the lack of a price on carbon.'

Mrs Mirabella interjecting—

We can carry on with this game that the coalition have been playing for the last decade, where they deny the fact that we have to price carbon. It is an inevitability, as the shadow treasurer said—

Mrs Mirabella interjecting—

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

Order! The honourable member for Indi has made her contribution and she has also had a pretty good opportunity to interject.

David Bradbury (Lindsay, Australian Labor Party, Parliamentary Secretary to the Treasurer) Share this | Link to this | Hansard source

As the shadow Treasurer said, it is an inevitability that we will have to price carbon in this country. That is why Michael Fraser, the CEO of AGL says:

AGL supports the introduction of a price on carbon emissions as soon as possible to provide investment certainty for the energy industry as Australia begins the transition to a low carbon economy.

Meanwhile, out there in the electricity generation world we see that old generators continue to pump out the electricity at higher and higher cost. The investment community is standing back not prepared to invest in new generation capacity because they have to go and borrow money. They have to raise capital. They have to look at a return on their investment across the life of that asset, which might be 30 years, 40 years or 50 years. And they know, because even the shadow Treasurer is telling them, a price on carbon is inevitable. They know it is coming; they just do not know when and they do not know how much they are going to have to pay. They want to know when and they want to know how much they are going to pay so they can factor that into their long-term investment decisions. But every day that they are given continued uncertainty they will choose not to invest in new energy-generating capacity. Like running an old motor vehicle, they will keep their generators on the road; they will keep their generators running at higher costs and they will pass those costs on to consumers all around the country. So people in my electorate, manufacturers and householders, will pay more in electricity costs because of inaction and uncertainty. That is why we say we are going to deliver certainty. We are going to give the investment community certainty about the price on carbon. You know it is coming; we will tell you when it is coming and how much you are going to pay so you can make the long-term investment decisions that you need to make in order to secure energy security for this country in the future.

If the coalition ever have the opportunity to repeal the legislation that we intend to put in place then they will have to look people in the eye and explain why there has not been any new investment in electricity generation. They will have to answer that question. And they will have to answer the question about why people's power bills continue to go up, up and up. And they will have to answer the question as to why they do not have a plan to deliver more investment in electricity generation in this country. Indeed, they do not have a plan that will contribute to easing the burden of the rising cost of living that comes with electricity power prices increasing at the rate at which they are. They do not have a plan to encourage renewable energy or cleaner and more efficient energy. There is no plan from the opposition. That is something they will have to confront.

The coalition have already indicated that the way they will fund their much more expensive approach to reducing emissions—they do agree with five per cent but they have a more expensive approach to reducing emissions—is by cutting funding elsewhere. They want to cut $70 billion worth of expenditure. We all know what a coalition government is like. We all know that they slash spending when it comes to services and they cut jobs. We are currently up to about 13,000 jobs that they want to cut. We know that they will bring back Work Choices. As sure as night follows day, when you bring back the coalition, when the coalition gets into government, not only will they cut expenditure on government services but also they will cut jobs and bring back Work Choices. (Time expired)

Alan Tudge (Aston, Liberal Party) Share this | Link to this | Hansard source

We have just had a 15-minute speech by the member for Lindsay on a matter of public importance which concerns the carbon tax's impact on our manufacturing sector. The member for Lindsay talked about the payroll tax and the land tax. Even Work Choices came up. He talked about the coalition's policies, but he barely mentioned his government's own policy, which is to apply a huge economy-wide carbon tax from next year that will impact on every single manufacturer across the country. The only positive thing that he could say in his entire 15-minute address to this House is that their policy would provide certainty. The certainty in their policy is that the carbon tax starts at $23 and will continue to go up and up and up and up over time. The certainty on this side of the House is that there will be no carbon tax. We are very, very clear in that regard.

If the news from yesterday was not a wake-up call for this government not to proceed with their carbon tax, then I do not know what will be. The headlines of the major papers screamed that a thousand jobs would be lost from BlueScope Steel due to the closure of one of the three remaining blast furnaces. A thousand families will be affected by that decision—a thousand mums and dads who will be going home and telling their kids one of the more difficult things to tell their children that they no longer have a job.

If it were just BlueScope Steel cutting workers that would be bad enough, but it is not. It is happening right across the manufacturing sector right across Australia, and it is happening right now. It is happening in large companies such as BlueScope Steel and it is happening in medium companies and it is happening in small companies and small businesses, including in my own electorate in outer eastern Melbourne, the electorate of Aston. As Alan Oster, the chief economist at the National Australia Bank, has said, manufacturing today is effectively in recession. If you do not want to listen to a big-company economist point out that manufacturing is in recession, then maybe the members of the government would listen to one of their own people. One of the four faceless men who put Julia Gillard into the prime ministership and into the Lodge, Mr Paul Howes, the head of the AWU, said:

… we are now facing a major crisis in Australian manufacturing.

Of course, the numbers support this assessment. As the member for Indi has pointed out, 90,000 jobs have disappeared from manufacturing in the last three years alone.

In the face of this crisis in manufacturing and in the face of weak economic data not just in manufacturing but in retail, in housing and in the unemployment figures right across the board, what does the government suggest should be the response to this crisis? In the context of jobs being lost and weak economic data from Europe and the United States and retail figures being down, what does the government instinctively reach for as the answer to every single problem it faces? That is right: a new tax, as the member for Longman pointed out. It is not just any old tax but a tax which will apply across the board and affect every single business in Australia. It will be the biggest carbon tax in the world with the broadest application and it will be an economy-wide tax. It will add cost to manufacturing. It is a tax that will cost thousands of local manufacturing jobs.

The reason it does this is that the carbon tax will make Australian manufacturers less competitive. Part of the difficulty for Australian manufacturers today is the intense competition coming from places like China. This carbon tax does not support our own manufacturers in the context of very strong competition from places like China and India. The carbon tax does not even create a level playing field for Australian manufacturers versus international manufacturers. No, that is carbon tax is a production tax, which means that it penalises manufacturers in Australia but does not apply penalties to imported competition. The member for Lindsay mentioned the automotive industry. According to a report from PricewaterhouseCoopers, the carbon tax will make every single Australian car up to $400 more expensive, but it will not have any impact on cars made in Japan, Germany or the United States. Australian cars will be up to $400 more expensive due to this carbon tax but it will not apply to the imports.

The Prime Minister is fond of talking about price signals. She comes into this chamber and says, 'This carbon tax is all about sending a price signal to the market.' What sort of price signal does it send when an Australian made car will cost up to $400 more than an internationally made car due to this carbon tax? What sort of price signal does that send? It sends the signal to go and buy an international car. The same applies to every single manufacturer in Australia who competes with international companies, which these days is nearly all of them.

A small example in my electorate is Vicpole in Bayswater, a company I have mentioned before in this House. Alan Vickery, the Managing Director of Vicpole, says, 'I cannot build in a measure to counter a 20 per cent price increase when my competitors do not have that same cost.' His is the only Australian company which manufactures street poles and bollards. All of his competitors are international. He says, 'It would not be the end of Vicpole to have the carbon tax imposed but it would be the end of 40 jobs.' There would be no requirement to have 40 employees to unload containers if he simply imported those street poles rather than manufactured them here in Australia. There are hundreds of examples like this in my electorate and in the adjacent electorates of Deakin and La Trobe, and I ask those members, 'Where are you in standing up for your manufacturers in your electorates?' For example, in the parts of Bayswater and Boronia that are in the La Trobe electorate, where are those members standing up for their electorates?

As I pointed out, manufacturers are doing it exceptionally tough, but this government seems to believe that its carbon tax is actually going to be fantastic for those manufacturers. We heard from the member for Lindsay that it is going to create fantastic certainty. The government is not concerned about additional costs on manufacturers; it thinks this is going to be a good thing. Every single day the Prime Minister comes into this House and says: 'This is all about jobs. This carbon tax is all about creating jobs.' I have news for the members opposite: if you increase the costs to businesses in Australia and you do not increase the costs to competitor businesses overseas, you will end up advantaging those competitor businesses overseas and disadvantaging our businesses here in Australia.

Mr Bradbury interjecting—

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

Order! The parliamentary secretary has had his opportunity.

Alan Tudge (Aston, Liberal Party) Share this | Link to this | Hansard source

If you do not believe me or you do not believe the essential logic that increasing the cost structure for Australian manufacturers is bad for those manufacturers, then maybe you will listen to Manufacturing Australia, which says that 'it will be the death knell for manufacturing in Australia.'

What is the point of all of this pain? Will it reduce emissions? Is this policy which is going to penalise our manufacturers actually going to reduce emissions? No, it will not. What it will probably do is make the overseas manufacturers more competitive, which means that some of our businesses will shut shop here and open businesses in China, where the standards are lower; hence, global emissions, which are what count, may actually grow. This is the ridiculousness of this carbon tax. This is the farce. This is the worst of all possible times to be introducing a carbon tax, when we have manufacturers across the country laying off workers and struggling as it is with a high dollar and fierce competition. They did not need an additional tax which will apply to their businesses and not to their international competitors. (Time expired)

Sharon Bird (Cunningham, Australian Labor Party) Share this | Link to this | Hansard source

I rise to participate in this matter of public importance debate in this House on manufacturing and its future. I am joined in the House by my colleague the member for Throsby. Members of the House would be aware that we took the opportunity in this chamber to put on the record the events that happened in our region yesterday with the BlueScope Steel announcement and our direct and real concern for the families that have been affected by that decision. We are determined to stand with them in providing the support that the government is able to provide to them and more broadly in providing support to BlueScope as a continuing steel manufacturer in our region. We will continue the work that we have already begun on providing opportunities for support and expansion of the manufacturing sector in our region.

It is important and a good opportunity to take those comments made yesterday further in addressing this particular debate before the House today. It is a sad pity and in many ways a fairly disgraceful pity that those opposite are seeking to use what is a difficult time for those families in our region and for our region as a whole as a political point-scoring exercise around the carbon tax issue when it has been made quite clear on numerous occasions by BlueScope Steel executives that the carbon tax had no impact on the outcome that was announced yesterday. The executives made that point at the time when we announced the Clean Energy Future package.

It is important to indicate to the House in this debate that the member for Throsby and I believe that the future of manufacturing is a key point to this nation and has an important role to play in the mix of our economy into the future. It is true to say that we are in a transition process within our manufacturing sector to the more high value-added production processes, to greater utilisation of innovation and to putting the production of research and development into the delivery of new products and services in the sector. The manufacturing businesses that will make it through this transition that we are experiencing will have a package of production techniques innovations, creative thought and use technologies in ways that we could not even imagine a few years ago. They will have a full line of service opportunity in providing problem-solving solutions for production of those products and after-sales service and follow up in an integrated model that will give us a real competitive advantage, I believe, in the international market.

In our area we are working on expanding the significant relationship that these businesses have with our local university. At the University of Wollongong our government has already been thinking about this linkage and we have funded $43.8 million to the Australian Institute for Innovative Materials and additionally a $25 million investment in a Sustainable Buildings Research Centre on the Innovation Campus of the University of Wollongong. These are directly designed to create opportunities in the new space for modern manufacturing and to link those to the opportunities in our region.

Next Tuesday my colleague the member for Throsby and I will convene an Illawarra manufacturing expo. This is designed to ensure that local manufacturers are aware of and able to access the many different programs that are available through a range of Commonwealth government departments. I should indicate that a number of those programs are on the chopping block of the opposition in their search to find $70 billion worth of savings. We are hosting this event at the Australian Institute for Innovative Materials to allow us to encourage and foster the development of an ongoing relationship and partnership between the University of Wollongong and the manufacturing community in the region. We are grateful that the Minister for Innovation, Industry, Science and Research, Senator Kim Carr, will be the guest of honour at that Illawarra manufacturing expo. I should indicate that it is important to recognise not only that the University of Wollongong and the various federal government departments are in our region playing a role but that today we particularly welcome the information that BHP Billiton, through Illawarra Coal, have announced that they are going to step up as a good corporate citizen in the region and play a role in assisting us through this process. They have indicated that they are putting in place an initiative whereby they will establish an online job centre to take job applications from people affected by the BlueScope steel announcement, as well as other local people who are interested in joining the coal industry.

Mr Colin Bloomfield, whom we work closely with in our region, said the company had recently employed a number of people without experience in the mining industry and they will look to employ up to 50 more people in a range of roles across their Illawarra coal operations. They are also open to taking applications from people for their interstate activities, including their Queensland coal operations where they have more than 750 job vacancies and their iron ore operations in Western Australia where they have 600 vacancies. This is an example of the strength of our region. The Illawarra has been through difficult times in the past and I think the great resilience of our region is the fact that we all do pull together, whether it is the community sector or the government sector and elected representatives or our media, who play an important role in sustaining confidence for the community in our future. All of us pull together, and this is an example of our corporate sector also being a part of that.

The member for Throsby and I will work with all the lead organisations in our region, whether it is business organisations, the Illawarra Business Chamber, the Illawarra branches of the Australian Industry Group and Regional Development Australia or our union organisations—the South Coast Labour Council and the affected unions, in particular the AWU and the AMWU—to find opportunities and ways forward for our region in the confidence that our people are up to this task. Part of that task is finding the opportunities that do exist with the introduction of a price on carbon.

Those opposite only ever want to run a fear campaign. I point them to a tremendous example. The Illawarra Mercury gave us great coverage of a green jobs conference, organised by our regional development organisation. They highlighted the story—those opposite scoffing might want to listen to this—of a manufacturer in my seat called David Brown Gears. The company was originally established as a manufacturer of mass produced gear components. That business has been transformed to become the type of integrated business in manufacturing that I talked about earlier. It produces significant massive sized gear products. It goes in, looks at the challenge, particularly for large conveyors and so forth, designs specific solutions and problem solves where there are issues. It provides the product, it does follow-up service and advice and it is doing particularly well. The Illawarra Mercury highlighted a new line of opportunity for the company, which it has now got into—that is, gears for wind turbines.

This is a story of manufacturing into the future. It is about opportunity as well. Those opposite never want to talk about the important role that many manufacturing businesses continue to play and will increasingly have opportunities for under a price on carbon. I think it is important that when we have these debates we also understand in regions like mine—the member for Throsby and I have generational commitment to our region—the challenges of transition. We understand it is a hard time and the Gillard government will stand shoulder to shoulder with a region like ours with confidence in its future and the future of manufacturing more broadly.

It is an absolute disgrace that in a debate like this those opposite—and in particular the member for Indi in her opening contribution—only see a political opportunity to run another version, another strand, of a fear campaign on a price on carbon. That is an absolute abrogation of responsibility not only to the 800 families directly affected in our region but also to those who are seeking a future in our region. They need to hear a message of confidence, quite frankly, from those in this House in our future, in the future of our region and in the future of manufacturing across the nation.

I finally point out that those opposite have absolutely no solutions. They oppose the Steel Transformation Plan, they oppose our bringing the money forward and they oppose our applying the innovation and industry investment fund—all of those things that are going to be used to transform our region. What are they proposing? Absolutely nothing, as if the manufacturing problem does not exist. (Time expired)

Ken O'Dowd (Flynn, National Party) Share this | Link to this | Hansard source

I rise today to support my colleagues from Indi and Aston on this matter of public importance: the carbon tax that is no good for Australia. It affects my electorate more than any other electorate in Australia. The full force of the carbon tax is going to hit my area. It is a toxic tax, and nothing more than a tax. It will not do anything at all for the atmosphere in my area or any other area of Australia.

I do not go knocking on doors in my electorate, they come knocking on my door and they say to me: 'How safe is my job?' What can I tell them? This is a tax that will be antimanufacturing, antibusiness and antijobs. Jobs in my area finance a lot of jobs in this House. Yesterday we saw an announcement that 1,000 jobs will be lost in the steel industry. I do not want this to happen to the aluminium industry, which is Rio Tinto in Gladstone and which supplies over 4,000 jobs to the people of Gladstone—to say nothing of the people in Weipa who supply the bauxite to Gladstone. Merrill Lynch, overnight, predicted 100,000 jobs would be lost to the Australian manufacturing industry by March next year. That is only six months away.

What do they think on the other side of the House? When are they going to wake up? Goodness me, they are asleep at the wheel. They are fiddling out of their depth; Rome is burning and they are sitting. Business in my electorate has lost confidence. Business around Australia has lost confidence. There is no certainty left in Australia. From here on—I do not want to say it but I am going to say it—jobs are going to fall because there is no confidence in this Labor government.

I was flying home to Gladstone on Saturday and sitting beside me was a construction worker. I said, 'Where are you working now?' He said, 'I'm working in Indonesia on a nitro fuel plant.' He said, 'We expect to be there for some time because there are so many things happening in Indonesia.' There are 600 Australian companies in Africa. There are 225 projects underway by Australian companies in Africa. There is delegation after delegation from African countries coming to Australia because they can see that there will be plenty of jobs they can get for workers as the industry closes down in Australia. That is a fact.

Gladstone has two aluminium refineries and one smelter and as I mentioned before they employ over 4,000 people. The high Australian dollar, the low Japanese yen, the Chinese yuan or the RMB—how long do you think it will be before these businesses are under strain? Businesses do not work on their budgets for 12 months—it is a long-time thing. They look at their balance sheets, they look at their P and Ls and they do projections for the next 20 years, and I can tell you now that they are factoring in this carbon tax and that their only hope is that the Labor government will be kicked out within two years. Then we can return it to normal.

There is a proposed steelworks plant for Gladstone which would employ 2,000 people. Where would that project stand at this moment with what has happened to OneSteel and BlueScope Steel? This is very serious. To the plan from the opposition, the government says 'Oh, a steel transformation plan'. What does this mean? Do we have an aluminium transformation plan? Do we get a cement transformation plan?

Do we get a chemical factory transformation plan? What will we tell the people? The people are going to pay. The taxpayers of Australia are going to pay. What are we going to say to the families that have geared their budgets to current incomes from their stable industry jobs? 'Oh, sorry, your $100,000-plus a year job has just gone, but wait—we'll give you a job in renewable energy! How about greasing the windmills? How about putting solar panels on rooftops? By the way, you won't be making the solar panels because they're made in China and they'll be transported out here. Centrelink is there to help, too. We'll see you right!'

Once all the steel, aluminium and cement industries are shut down, who are the 500 biggest polluters going to be? Just imagine the fun on the opposite side when the carbon cops are running around the countryside saying: 'Are you in the 500? Are you over the 500? We're coming to get you, guns ablaze!' But there will not be any polluters out there because there will not be any industries there. It will be too late. Industries will be offshore and so will our skilled staff. They will be working in South America, Africa, Indonesia or China. Trucking companies, meatworks, farmers—bring it on! It is a great plan! 'We'll look after you. A transformation plan for everyone!'

What does the government's support do to manufacturing? It has already announced that it is going to wipe $2 billion off the car industry. That is a disgrace. The government talks about the opposition, with $500 million, but its plan is to wipe $2 billion off the Australian car industry. When you look at the Australian car industry you see it has adopted packages to get emissions well down—that is how we will get our emissions down. Look at our trucks; they do not blow smoke anymore. There are a lot of issues that we take direct action on that do not get recognised by the government.

Our Treasurer wonders why we have inflation: health and medical services are up 5.6 per cent; education, up 5.9 per cent; food, up 6.1 per cent; electricity, up 10.7 per cent—this is in one year, mind you; petrol, up 11.3 per cent; water, up 12.8 per cent. The Treasurer wonders why we have inflation. It is the government charges that are putting up the cost of living and that directly relates to our interest rates—they go up accordingly. He does not know what is causing inflation—he is causing the inflation! The Treasurer and his buddies in the states over the past few years have caused inflation to the point where we are buckling under the interest rate pressure. It is hopeless.

It is written that back in 1957 Joh Bjelke-Petersen and the Country-National Party coerced big companies like Rio Tinto to get involved in the manufacturing industries in Queensland, especially the aluminium industry. When the aluminium industry first came to Gladstone in 1965 the people threw their hands up in the air with joy; we had something more than fishing and grain crops. There were incentives given, but they always paid their way. You would think the companies do not pay much but by the time you add corporate tax, royalty tax, superannuation, GST charges, payroll tax, land tax and MORT our companies are paying big money to live and have their industries in our country. Do not frighten them away, please. We need them. We all need them.

Stephen Jones (Throsby, Australian Labor Party) Share this | Link to this | Hansard source

We have heard 25 minutes on the topic of manufacturing in this country from the opposition, without one constructive policy proposition. From those who would like to sit on this side of the chamber, there was not one proposal—not one proposal. I was hoping that the member for Indi might use the opportunity of this matter of public importance debate to clarify the response she gave on a recent television program, where she was pinned by the host, Tony Jones, who asked her:

Can I get you to respond to criticism from the government that the opposition is saying that it supports the manufacturing sector, you want Australia to keep making things, but in practical terms you're not providing the support that your rhetoric would suggest. For example, Tony Abbott has said you will cut $500 million in assistance to the car industry.

Mirabella: Well, supporting the future of manufacturing requires several different policies and we are working on our policy response. We have already foreshadowed that we will have a very robust—

Host: But one specific—you have said that you're cutting half a billion dollars from the automotive industry.

Mirabella: Well, that is one policy from the last election. We are not going to do—

Host: And Tony Abbott says, 'I'll stay with that policy.'

I was hoping that, in a debate about the opposition's proposed policy on manufacturing, we might hear the manufacturing spokesperson come into this place with something positive to say about an industry that is indeed going through a difficult time at the moment.

Times are tough for manufacturing, and they are tough for a number of reasons. They are tough because of the circumstances facing the European Union economies. They are tough because of the circumstances facing the world's largest economy, the United States. They are tough because of the high Australian dollar, which is at record levels. It has been over US$1.10 numerous times this year and it does not look like it will go south of that any time in the near future, making it very difficult for our manufacturing sector to compete with low-cost inputs. It is a tough time for manufacturing because of the high input costs. We are enjoying fantastic terms of trade at the moment because the high prices that are demanded for our iron ore and our coal are great for those who receive the benefit from that, but for many in the manufacturing sector those high prices for iron ore and coal are known as high input costs. We also face the fact that, in world terms at least, we have a very small domestic market. So, for our industries to survive, they must find niche markets within the domestic market or export to larger overseas markets.

There are some other reasons why manufacturing is struggling at the moment, reasons that the member for Indi and those behind her will go to great lengths to avoid talking about. One reason is the fact that, after 11 years in government, those opposite left this country with a woeful skills crisis because they never invested in skills and education, because they do not believe in the university sector, they do not believe in the TAFE sector. In fact, their only policies in relation to the TAFE sector were to try to destroy and replace it. A further reason is the poor state of public infrastructure, the $40 billion infrastructure deficit that they left us with and which we, because we believe in roads, rail and ports, have started to turn around. It is a tough time for manufacturing at the moment, but there are a whole range of reasons for that that those opposite will not want to talk about because, if they talk about it, they have to go to the heart of their woeful legacy.

There is another reason why times are tough for manufacturing, and that is because, globally, manufacturing itself is going through a transformation. All of the smart businesses in the manufacturing sector, and that includes those in China, understand that they have to transform their operations if they are going to be viable and competitive in a carbon constrained future. They are moving to innovate; they are putting billions and billions of dollars into research and development. That is what the smart companies are doing. That is what the smart countries are doing. We know that, if our manufacturing industry is to have a future in this country, in an open economy and a trading world economy, we have to move our manufacturing through that process of innovation and transformation as well. It matters a lot because one million people are employed in the manufacturing industry. Over one-fifth of all engineers in this country are employed in manufacturing. It is an important place for knowledge and innovation. The manufacturing sector contributes about $4.5 billion to research and development and innovation in this country, so we know on this side of the House that we need to do whatever we can to ensure that we have a viable, robust manufacturing sector which is able to transform itself to compete domestically and in a global market.

Let me get to the issue of carbon pricing and a carbon constrained future because, if you listened to the debate around this place, you could be forgiven for thinking that one side of politics believed in climate change and the other side did not, and that one side of politics had a target for reducing carbon emissions and the other side did not, when in fact that is not the case. The simple fact is that we have a bipartisan position on the targets for reducing our carbon emissions in this country—five per cent by 2020 over our 2000 emissions level. We also have a bipartisan commitment to the contribution of the renewable energy sector to meeting that emissions reduction target.

The single difference between those on the other side of the House, those who sit behind the member for Indi, the shadow spokesperson on manufacturing, and those on this side of the House is not whether we believe in carbon pollution, not whether we believe in climate change and not whether we believe Australia should play its role in reducing our carbon emissions, but how you do it. I think that if we are to have a sensible policy on how we do it we should look at the least cost means of abatement, which is why we have approached this by a market mechanism, by putting a price on carbon. I could not find a better way of expressing the proper role and the proper approach of government in this matter than to refer to the words of the Boston Consulting Group on this matter, where they said that the government's role should be to create the market environment that will lead to the outcomes sought either through putting a price on carbon or placing a cap on how much carbon will be emitted and then allowing companies to trade CO2 entitlements. They went on say that governments are poor at making such hard-headed assessments to determine what gives the best returns for a dollar invested, and that political considerations and emotional arguments inevitably cloud judgments; the decisions should be left to the market.

Of course, consulting groups do not speak. These are the words not of the Boston Consulting Group as an organisation but of a person who used to work for the Boston Consulting Group, a man who used to be known as Alan Tudge, but in this place is known as the member for Aston and the person who spoke. I am glad to see he is back in the chamber. He probably recognises those words. They were the words he penned in an op-ed to the Australian on 13 February 2007—when he was not walking lemming-like in the procession of opposition, in the procession of 'no' led by the Leader of the Opposition, the weathervane on these matters, who has had more political positions on this than the Kama Sutrawhen he was actually talking common sense and had the ability to speak plainly, to talk in the language of experts and in the language that understands the best way of approaching this bipartisan objective.

I commend the approach of the then Alan Tudge of the Boston Consulting Group, now known as the member for Aston, because I think he makes a lot of sense when he says that the best way of approaching this is through a market mechanism. I implore the member for Aston to show a bit of gumption and get up inside his caucus room and join with those others on his side of the chamber who know that this debate can be won with a bipartisan approach.

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

Order! The discussion is now concluded.