Stephen Jones (Throsby, Australian Labor Party, Shadow Parliamentary Secretary for Regional Development and Infrastructure) Share this | Link to this | Hansard source

I move:

That this House calls on the Government to:

(1) acknowledge that the impending loss of 500 jobs from the steelworks in Port Kembla will hurt the economic security of a region which already has unemployment numbers at two per cent above the national average;

(2) recognise that Australia should be a country that continues to make things and that steel making is vital to the future of the Illawarra and other regions including Whyalla in South Australia;

(3) properly resource the Anti-Dumping Commission so that it can get on with the job of identifying and prosecuting cases of dumping, including subsidised steel;

(4) promise not to repeal or weaken the Australian Jobs Act 2013 so that Australian workers are given a fair chance when job vacancies arise;

(5) reinstate the Local Employment Coordinator in the Illawarra so that workers who lose their jobs at the steelworks in Port Kembla and elsewhere can retrain and find alternative employment;

(6) locate entrepreneur advisers in the Illawarra to help local businesses in improving their competitiveness and allow retrenched workers and contractors from the steelworks to qualify for higher level job seeker assistance; and

(7) support the #IllawarraDigital strategy and facilitate a Digital Enterprise programme so that small to medium businesses and young entrepreneurs can train and seek advice on taking advantage of high speed broadband.

Last week it was announced that BlueScope, its employees and the unions had reached a memorandum of understanding for the reform of the Port Kembla steelworks. Regrettably, it means that 500 jobs are set to go from the Port Kembla steelworks, but hope remains for the future of that important factory. Even with these job losses, there will be 4,500 remaining people who daily rely on the steelworks for their livelihood. They can breathe slightly more easily, but much more needs to be done to save the future of steel in Australia.

The member for Cunningham and I welcomed the announcement. It was a decision that took real guts. I want to pay tribute to the South Coast Branch Secretary of the Australian Workers' Union, Wayne Phillips, who has done a great job through a tough series of negotiations—probably the toughest in his life—leading the workers to a position which will save the majority of the workers their jobs. These are not easy arrangements to reach.

What it shows is that the BlueScope workforce, their union and the Illawarra community are willing and able to work constructively with the company and with governments in the interests of the region and employment more generally. The unions have shown true leadership in negotiating the best deal possible for their members while keeping their eye on the main prize—that is, ensuring that the factory stays open. The ball is now in the court of the New South Wales Baird government and here, federally, the Turnbull government.

The situation remains critical; action is needed from the coalition, both here in Canberra as well as in New South Wales. For the last few months they have been focused on their own jobs, but it is now important for us to focus on the future of those 4½ thousand people, and the broader Illawarra community, who rely on the Illawarra steelworks. This includes over 9½ thousand people in the Illawarra who are today already looking for work. That number will jump to 10,000 when the 500 people walk through the gates for the last time. Labor is committed to the steel industry and will work constructively with all levels of government and all parties to ensure that we can keep the industry strong.

Only a few weeks ago, the member for Cunningham and I wrote to the Prime Minister, setting out a clear plan. I am delighted to see that the industry minister, Christopher Pyne, has agreed to have a meeting with all the stakeholders. It should be in Wollongong, but I will not cavil with the fact that the meeting is in Sydney. It is important that we get all the players around the table. At the federal level, we have a job to do. We must put in place anti-dumping provisions to ensure that subsidised steel is not being dumped on the Australian market, plunging the jobs and the livelihood of the steelworkers into real risk. The Anti-Dumping Commission needs to be beefed up and properly funded so that it can do the job that it was set it up to do by the Labor government.

We also need to ensure that Australians and Australian products are at the front of the queue, particularly when it comes to government procurement. We think much more can be done, and I am looking forward to statements being made by both the federal government and the New South Wales government on this particularly important issue. We know there is a ramp-up in infrastructure spending around the country and we would like to see more Australian steel going into those critical infrastructure projects.

I have talked about the 9½ thousand people who are already looking for work in the Illawarra. It is essential that we put in place labour market programs to assist these workers find their way into training and new jobs within the region. It is disappointing that the government has not yet agreed to the re-establishment of the local employment coordinator, a position set up in 20 high-unemployment regions around the nation—including in the Illawarra—during the height of the global financial crisis. They have played a critical role in putting in place a rapid response team for downturns and crises such as the BlueScope lay-offs. They have been very successful, for a minimum injection of Commonwealth funds, and the member for Cunningham and I again call on the government to reinstate this important position, together with other labour market programs that are essential for putting people back to work.

We also call on the government to place an entrepreneur program adviser within the Illawarra. We are told there is one in Sydney; it is an hour and a half up the road and nobody knows the local region better than somebody who is working in the region—a position that I am sure the member for Herbert, representing a regional area, would agree with me on.

The A-plan means the loss of 500 jobs. The B-plan meant the closure of the production of steel in the Illawarra. It is a tough nut to bite, but it is a welcome decision. (Time expired)

Michelle Landry (Capricornia, National Party) Share this | Link to this | Hansard source

Is the motion seconded?

Sharon Bird (Cunningham, Australian Labor Party, Shadow Minister for Vocational Education) Share this | Link to this | Hansard source

I second the motion and reserve my right to speak.

Ewen Jones (Herbert, Liberal Party) Share this | Link to this | Hansard source

Whilst this motion is principally about the Port Kembla steelworks, it does go to employment, as the member for Throsby indicated, including employment in our resources industries and our value-adding industries. Similar to what was in the member for Throsby's motion, on the weekend we heard of 535 jobs going in the zinc concentrate business at Glencore's mine in Mount Isa. That is due, principally, to the cyclical nature of minerals and the low commodity prices. But as you tell people who leave their towns and lose their jobs, that is pretty much cold comfort.

What we in this country must come to realise is that the value-adding industries are, by nature, energy-intensive industries, and until we come to grips with the actual cost of our inputs we will continue to be under pressure here. What we must do is make sure that there are three things that go into making a business successful in value-adding industries: there is your wages component, there is your inputs component and there is your productivity component. We made a decision generations ago that we were going to be a high-wage nation and that we could still be a competitive industry. You can still be a strong industry with higher wages; you can drive innovation because you have that flexibility. We must look at our productivity and how we can drive our productivity into those things to become competitive and to make sure that we are competitive.

When a business like Wulguru Steel in my home city of Townsville can have steel girders imported from China and put in the yard next door to them for cheaper than they can manufacture them—and with an articulated frame crane to lift them across the yard—we know we have a problem. So it comes down to input costs and the costs of energy. What we must do is look at the way we are structuring our national energy market and understand that within our markets coal is not bad. We seem to be getting across this thing in this country where everybody seems to be walking away from coal. Eighty-six per cent of our nation's energy is still supplied by coal. We have got to the situation where we are regulating coal mines and making it awfully hard for coal mines to come up. You cannot smelt without coal; you cannot smelt without the energy and the power that coal and burning provides you. What we must do is come to the realisation that coal mining and the jobs and these things here are ultra-critically important to our steel industry, to our aluminium industry and to our cement industry—to all of those industries where we are value adding the cost of energy to bring those things in there.

In response to the 535 jobs lost on the weekend, local councils and civic leaders in my region have said, 'The federal governments and state governments must do more about job creation.' And yes, we must. We have the Carmichael mine in the north Galilee ready to go, but it is being held up by ambit claims on environmental grounds. And when we have the construction phase of the mine to come, with the export quality of low-ash, low-sulphur thermal coal to places like India for electricity generation, we can see the jobs that are created all the way from the port, with the stevedores and the waterside workers, out to the roads and all the way back along the rail line, all the way to Abbot Point. So whilst this motion is about the Port Kembla steel works, I understand that it does go to the greater concern that we have in regional communities about where our jobs are going and where our people are going to be employed.

That is the critical thing here, because what we are finding is that people like the member for Melbourne will jump up and down and say, 'We can't; we've got to stop these coal mines.' And yet his City of Melbourne is powered by the dirtiest of brown coal of our generation, from the Latrobe Valley. We want to grow our industry and, in places like regional communities like the Illawarra—which is on one of the most beautiful parts of Australia—and in the place where God goes for holiday, being North Queensland, we have to be able to have our chop at providing these jobs. We have to be able to get our heads around providing the social and critical infrastructure to make sure that we help people get the jobs that they go for in the future. It is simply unsustainable for a country like ours just to import steel and steel products and just leave our natural resources in the ground and not exploit them properly and enthusiastically. If we do those things right—if we make sure that our input costs are low and we make sure that our productivity is high—we can have high wages. We can have wages growth and we can have job growth, because that is what we need in the country. I thank the House.

Sharon Bird (Cunningham, Australian Labor Party, Shadow Minister for Vocational Education) Share this | Link to this | Hansard source

I thank my colleague the member for Throsby for bringing the motion before the House and I acknowledge my other colleague the member for Gilmore, who is here to speak on the motion as well.

It has been a particularly tough time for our region, but it is something that we are, sadly, all too familiar with. We have been through a major restructure with BlueScope in the past that had a significant impact on job losses and we face the same dilemma before us again now. Not so long ago, BlueScope management made it clear to our community that in order to sustain steel production in the region they would need to find $200 million in savings—what they called a 'game-changing' plan—to make it a viable option.

I have to say we have seen two important outcomes from that that provide support and strength to their decision to continue to produce steel. First is a very strong and clearly demonstrated commitment by the community more broadly to see BlueScope continue its steel production in the Illawarra. There was a rally on 19 September in our region at which hundreds and hundreds of people turned out. For example, our local media outlets, including the Illawarra Mercury, got on board the Save Our Steel campaign. Leadership across community, industry and unions have all made clear statements publicly that they are willing to work with the company to see steel production continue. So we have got that pillar, if you like, in place.

This past week, we saw a second critically important part of that story be achieved. That was due to no small effort by the trade union movement in the Illawarra—in particular, as my colleague has said, the local branch of the Australian Workers' Union under the leadership of Wayne Phillips. It is not an easy task to have to talk to your membership about the fact that there are two choices before them: one which would potentially cost the jobs of around 500 of their friends and colleagues and the other that would see the plant shut and 5,000 jobs be lost. It is never, ever an easy thing to have to do. Wayne and his team have worked through that with their members to get an outcome that has been welcomed by BlueScope Steel in providing that opportunity for some fairly difficult decisions—not only job losses but also things like freezes on wages and so forth—to be put in place to give viability to the steelworks. I should also acknowledge the Australian Metalworkers Union and the Electrical Trades Union as well, and also the South Coast Labour Council's Arthur Rorris, who has been working with them. This was, I think, one of the most difficult tasks of any leader of an organisation, and in particular a trade union, because their prime concern is the welfare and wellbeing of their members. So that is never, ever an easy thing to do, and yet they had the meeting and endorsed that outcome. BlueScope put out a statement as a result of that indicating that they welcomed the game-changing approach, and the CEO, Paul O'Malley, said that the agreement was significant and an essential step. So two of those important requirements are in place.

I do want to acknowledge that one of the local steelworkers at the meeting, Lance Turner, made a comment in the Illawarra Mercury, and it is true. He said

I know a few of my good mates who are going to lose their jobs out of this … Even they had to put their hands up …

So people joined together in that meeting in a broader statement of support for each other and their community, knowing full well that some of them will have a very significant outcome from that personally for them and their families.

As a result of the issues we are facing, we now, as the member for Throsby said, need both levels of government to come up to their responsibilities on what they can do. My state colleagues have been calling on the Baird government to particularly address the direct concerns that the company has raised with them around tax matters that they can assist with. At the federal level, obviously there is an opportunity through antidumping actions to make sure that we are taking action so that the dumping of cheap steel is not undermining our local industry. There are important opportunities around government procurement in ensuring the maximisation of the participation of locally produced steel in federally or state-funded projects. But also we need to take very urgent action, now that we know around 500 people are going to be losing their jobs, to give them and their families the support to ensure that they have access to the sorts of training support and job-seeking support that they will need in what is a difficult labour market as it is. So I commend all the locals for their work and I call on governments to now do their part in providing solutions on this very difficult issue.

Ann Sudmalis (Gilmore, Liberal Party) Share this | Link to this | Hansard source

How many of us remember, in sixth class at primary school with teachers and classmates, taking the long-haul bus trip from Sydney to Port Kembla? Quite a number of years ago, this was the highlight trip for students. I recall this experience, with the frightening energy of the blast furnaces and the overwhelming heat as we observed molten metal being poured from enormous buckets into the ingot moulds, and then watching in complete awe as this was rolled and squashed and shaped and formed. There were hundreds of people, all dedicated, busy and watchful, to make sure none of their coworkers or the overexcited children came to any harm.

In recent years we have seen major changes to the steel industry, and each time the steelworkers have shown gutsy courage in devising options to retain this iconic industry. During the 1980s the mill was hit by recession, world oversupply and competition. The workforce in 1981 was estimated to have been around 20,000 employees. By 1984 that had dropped by 35 per cent. At that time it was noted that there were structural weaknesses in Australian manufacturing, including small and scattered plants that were cost-inefficient. There were entrenched union and management attitudes, high wage costs and not enough investment in research. By 1990 Port Kembla was producing 3.5 million tonnes and employing only 9,500 people.

Wayne Phillips was a warrior for the steelworks back then and, to his credit, he has been an outstanding warrior and advocate in the 2015 discussions with BlueScope Steel. The situation in the eighties and nineties has evolved to the current, more positive, approach, which will assist the potential for our steel industry to stay. In May of 2012 there were indicators in the face of economic change. The steel mill was yet again facing difficult times. There have been initiatives that have changed the aspects of steel production that have become profitable and very sustainable. Colorbond would be one of those iconic steel industry developments, from its early history in the sixties to its present-day market dominance and profitability. Perhaps with Australian ingenuity there is another steel based product just around the research corner, especially with more research.

But we know that employment numbers cannot ever fully recover when we read reports of how the work has been carried out in more recent years. Instead of having hundreds of workers on the manufacturing floor there are watchtower control rooms with guiding computers and control equipment. The much reduced staff numbers watch and monitor all the screens, dials and adjustment devices.

A big part of the problem for steelmaking actually has nothing to do with the mill or the workers themselves; it is the fluctuating world prices of coal and iron ore, and the strong dollar. The value of the dollar has only recently dropped, but it was close to parity for such a long time that it truly affected the bottom line. Manufacturers of any size, be they small, medium or large, are at the mercy of the dollar, and it can often make or break economic survival.

Paul O'Malley, BlueScope Steel's Chief Executive, has worked tirelessly with Wayne Phillips, Arthur Rorris and the entire union membership. Last week the unions made a decision, probably one of the hardest that any union could make. It was a compromise. There will most likely be job losses of around 450 to 500. I have every sympathy for those who will be affected. However, it has meant that negotiations to retain the 4,500 jobs that are still there are still in the mix with the BlueScope board. As an outsider but one who cares what the possible outcomes could be if the mill at Port Kembla closes, I think the result of last week's meeting is commendable. The unions have negotiated wage freezes, loss of bonuses and ultimately some job losses. This is yet to be fully voted upon, but it has enabled the next step to take place. It must have been a terribly difficult decision.

There are Labor members in parliament who would say that the federal government needs to alter procurement, but I do not think procurement is the only answer. If it were, it would have been done back in 2012. There is no way we can put in the initiatives of other industries, because they affect a competitor industry, and the quick-fix solution is often not a solution at all.

The steelworkers have put their best foot forward. The Minister for Industry, Innovation and Science will have a meeting on 26 October. This is part of the plan to go forward. The solutions for the Illawarra region and the steelworkers will be the positive discussions with all levels of government, the workers and management, developing a strategy to go forward as a true bipartisan plan that will enable our local industry to remain, including the strengthening of antidumping laws, which is of critical importance. Our region needs this compassionate economic compromise approach to help our steelworkers and the mill, which is an icon for us all, and to develop a plan for the next transition in such a significant industrial area.

Debate adjourned.