Sean Edwards (SA, Liberal Party) Share this | Hansard source

I rise to join with my colleague Senator Barnaby Joyce to speak against the adoption of the Steel Transformation Plan Bill. Of all the unnecessary pieces of legislation that have ever been introduced into the Senate, the Steel Transformation Plan Bill is one of the worst. Why? It is because of what begets it. If the government had not misled the Australian people this legislative proposal would not have been before the chamber. The voters of Australia should have had their chance to give their opinion on whether they should pay this tax to fund, arguably, one of the grubbiest deals that we have seen in the Australian parliament—the one between the Prime Minister and the Greens so that she could hold office.

Now that Labor and the Greens have birthed this insidious tax, we are now talking about compensation. Without this tax there would have been no need for the Steel Transformation Plan Bill. Because of the impact of the tax on a vital Australian industry, the government now plans to compensate the steel industry with a $300 million package. We are told that the bill establishes a framework for the payment of financial assistance to steel corporations under the two payment schemes established by the bill—the Competitive Assistance Advances Scheme and the Steel Transformation Plan. Now, doesn't that sound and look like previous schemes advanced by the government, one of them under the direct control of the then Deputy Prime Minister before she and some of her cronies put 'the steel' into the back of the then Prime Minister Rudd? It was a knife job then, but what Labor and the Greens want to do now is put a steamroller over everybody else who has to pay. This is shades of pink batts and the excesses of the Building the Education Revolution and the Gillard Labor government memorial halls at schools right across the nation. And what were they most noted for? Rorting, mismanagement and waste on a scale unprecedented in Australia.

The only reason we are debating this bill is because the Prime Minister went back on her word and introduced a carbon tax. This bill is an admission by the government that the carbon tax will make Australian industry, particularly the steel industry, more uncompetitive. The outline of the Steel Transformation Plan Bill states that the object of the bill is to encourage investment, innovation and competitiveness in the Australian steel manufacturing industry as it transforms into an efficient and economically sustainable industry in a low-carbon economy.

Let us talk about what the government has done to encourage investment, innovation and competitiveness in the steel industry. Taxes do not encourage investment, innovation or competitiveness. In fact, they do the opposite. So lumping one of the world's highest carbon taxes on the Australian steel industry is certainly not going to encourage investment, innovation, or competitiveness. How will increasing the cost pressure and burden on steel manufacturers in Australia help the industry to be more competitive? It will not. In fact, it will do the opposite. It will just be another pressure on an industry which is already facing a high Australian dollar and high input costs. This is not an industry that needs a new tax, and it certainly would not need a government handout if the government was not unnecessarily increasing its costs. The object of the bill is to transform the industry into an efficient and economically sustainable industry. But if steel manufacturers have to move offshore in order to remain viable there will not be an industry to transform.

The carbon tax is just another pressure the government is burdening industry with, another pressure manufacturers in other countries do not have to contend with, another layer of bureaucracy for industry to answer to. This bill will only help two steel manufacturers—BlueScope Steel and OneSteel. Coincidentally, upon the announcement of the carbon tax the value of those companies was diminished by over $300 million collectively. What a quirky coincidence that the compensation package is $300 million. And the day after there was another $100 million to boot—and they have not recovered. What we have with this bill is an eligibility criterion for compensation under the bill which requires an applicant to have produced at least 500,000 tonnes of crude carbon steel annually from 2009-10. In Australia only two companies meet that criterion—BlueScope Steel and OneSteel. Therefore, the remaining businesses, which employ about 80 per cent of Australia's steelworkers, will not benefit under this plan.

I note that the bill also establishes mechanisms to monitor the application by eligible corporations of payments made under the two proposed schemes. Talk about locking the stable door after the horse has bolted! Not only will you have to engage the new bureaucracy, you will now have them looking in. It is all very Orwellian now. Normally people learn from their mistakes, but with this Gillard-Brown alliance government I have grave doubts. We all know about the propensity of Labor and the Greens to have a mantra of 'tax, churn and spend', but this latest example is 'take with one hand, churn it through a new bureaucracy, and give it with the other hand'.

Of course, this compensation will run out after four years, while the carbon tax will continue to go up and up and up. What are the long-term impacts of the carbon tax on the steel industry? The carbon tax is not just a four-year impost; it is ongoing and it will rise. After the compensation runs out, the industry will again have to compete with steel imports from countries that do not have a carbon tax. And what about the smaller players in this industry who will have to adjust without any government assistance? They will have to compete against the biggest manufacturers in Australia, who will receive support, and against imports from countries without a carbon tax.

The government is playing favourites with steel manufacturing. Where is the recognition of the rest of rural Australia as well?

Senator McKenzie interjecting—