Christopher Back (WA, Liberal Party) Share this | Hansard source

I rise to comment on the Australian Jobs Bill 2013 and to pick up on some of Senator Xenophon's final comments, in which he made mention of the United States of America and its renaissance—to use his word—in manufacturing.

The major driver for that in the United States is a return to two words, words that have underpinned and driven Australia's wealth for so long, and those two words are 'cheap energy'. I speak with some interest in the United States in this matter. Two of my children are in the United States. My daughter resides in Houston, Texas, and works in the oil and gas industry supplying services to the offshore oil and gas industry, and one of my sons resides in Lafayette, Louisiana, and is employed in a senior position in the shale gas industry throughout northern and eastern USA. So I have a keen interest. Our family reflects often on how it is and how it has been. I hope the young people up there are listening, because I hope that when you get to adulthood we once again might have returned to a better circumstance.

How is it that our country is geographically similar to the United States, which has a population of 350 million, whereas we have only 23 million people, yet our per capita income is so high and we enjoy such a high standard of living? When I speak to young people and ask them the reason for this they tell me it is because of oil and gas. But of course it is not, because oil and gas are only relatively new in terms of their size and scale at the moment. Then they will tell me it is iron ore. But we have only been heavily involved in iron ore exports to any extent in the last 10 to 15 years, so it certainly is not that. Then they go back as far as the wool industry, but it is a long time since this country survived on the sheep's back. Eventually, since they cannot answer the question, they will say to me, 'You tell me, Senator Back, what the reason is.' The answer has been our cheap energy. The unfortunate thing is that through the life of the Labor government, since 2007, starting with then Prime Minister Rudd and continuing under Prime Minister Gillard, they have done every possible thing they can to destroy the one economic advantage this country has had.

When one looks at what drove manufacturing away from the United States to other markets, it was indeed the fact that they had lost the advantage of their cheaper energy. It is only now, with the resurgence of the shale gas industry, in which the geologists and others found the technique and the mechanism to actually start drilling sideways once they got down 2,000 to 3,000 metres, that they have been able to unlock those reserves of shale gas. And the US once again is in that position of having the advantage of cheap energy and bringing back onshore so much of the manufacturing that once upon a time this country would also have proudly said was our birthright, but no longer. It would be tremendous to support this legislation, because who does not want more Australian jobs? Who does not want to see more young people like these and others having a brighter future in manufacturing and related industries?

But of course there are two elements to why we cannot support this. The first is the fact that it is being driven by a government that is grossly incompetent and that unfortunately does not know how to interact with business and industry. Secondly, and regrettably, we now have a gross debt of $300 billion. That is $300,000 million. And the reality is, unfortunately, that this country is now paying $1 billion per month in interest—not capital repayments but $1,000 million a month in interest on that debt.

We know the Australian Industry Participation scheme, one introduced originally by the coalition. It has stood the test of time well and has focused on Commonwealth government procurements worth $20 million or more. Should that trigger be reached, it excites an Australian industry participation plan. These have the objective of ensuring that local firms receive and achieve optimal opportunities to tender and to undertake some or all of these project works.

In my own previous and recent existence as the chief executive officer of a company selling technology throughout Asia, India and other regions of the world, particularly very high level IT for high-value asset protection, it was a source of great frustration to me—through you, Mr Deputy President, to our shadow Attorney-General—that we never, ever seemed to be able to sell any products at all to the Australian Defence Force. Indeed, it was only when an American company eventually copied our technology and commercialised it in the US market that the Australian Defence Force bought it—as an American product. So I can assure you that I have a very strong affinity for ensuring local employment, local jobs and work going to local companies. And the closed mindedness has been a source of great frustration to me, particularly that of the Australian Defence Force procurement system in consistently looking beyond Australia's borders for supply of products when indeed superior products or equal products exist in this country. I can assure the Australian people, should they honour us with government, that those who will have responsibility in this area will have me in their offices pleading consistently for a reversal of those policies.

But what this does, which is why it must be opposed—and I congratulate Senator Colbeck for the comments he has made in this area—is extend this beyond government procurement to all procurement across industry. The proposal by the Labor government is that this would, in their words, 'strengthen the capacity of Australian firms to win more work on major projects'. But what are some of the implications of this? First, it would require that all these plans be generated for all projects with a capital expenditure of $500 million. Secondly, projects worth $2 billion or more would require an Australian industry opportunity officer. Can anybody imagine that—an Australian industry opportunity officer being embedded in the procurement teams of individual companies? I thought these things went out with the demonstrated failure of the communist system.

Senator Brandis interjecting—

Yes, I do take up that observation made by Senator Brandis. You can really see the words of Stalin, and the feeling, coming through here. One wonders exactly what the role of this officer would be, what their skill sets would be. Would they sit in on the board meetings of a company? And what would that do to the levels of confidence of a business or a consortium or indeed its financiers? What would the role of the person be? Would they have to approve? Would they note? Would they rush back to a bureaucrat here in Canberra and report? And is this creating the sort of climate that we need to encourage Australian business and multinational business to continue to invest or indeed to increase their investments?

I accept and endorse the comments of Senator Xenophon, as he struggles from the chamber—perhaps he is in need of some veterinary assistance! But I endorse his comments and those of Senator Madigan in relation to comments associated with antidumping. I look forward to the debate in this chamber this evening—should we be so fortunate as to be able to have one before the guillotine mercilessly comes down on our necks—so that we can aerate far more actively and openly the issues associated with antidumping. I will not waste the time in this contribution, because I know there are others who do want to speak on it.

As part of the Australian jobs announcement, the Australian Labor government will also commit to establishing 10 industry innovation precincts. These have excited quite a degree of interest, and one would actually look to support the notion of such precincts. In my home state of Western Australia, where the offshore oil and gas industry is so important and is growing, we have, south of Fremantle in the Cockburn Sound area—the area referred to as Henderson—active shipbuilding and high-speed aluminium ferry construction; we have a lot of concentration of activity. For years, long before I came into this place, I was pleading for Henderson to become the Stavanger of the Southern Hemisphere. Stavanger is that wonderful area in Norway in which all their offshore oil and gas technology, research and development is focused, and from Stavanger is based the entire Norwegian offshore oil and gas industry.

I referred earlier to Houston. I was in Houston in December and early January to see now the massive investment that is going on by the major oil companies and the concentration of expertise, funding and finance to support the North American offshore oil and gas industry in the Gulf of Mexico and on land. I certainly see the opportunity for a place like the Cockburn Sound area to become one of these industry innovation precincts, and I look forward to seeing what prospects there are.

It was interesting during Senate estimates that we explored further the undertaking by the government to commit to expending some $10 million in advertising the plans for this program to develop these industry innovation precincts. I go to an interchange between Senator Colbeck and officers of the department of industry in the Economics Legislation Committee prior to estimates. Senator Colbeck was asking on this occasion if they could give us an indication of 'all the programs that will be rolling into the administration under that agency.' He said:

The government has announced that it is going to spend $10 million of taxpayers money advertising the plan. Can you tell us how specifically the money is going to be spent, and when and if it is all going to be spent before the election?

Ms Watson from the department said:

Yes, you are correct that $10 million has been set aside for an information campaign—

isn't that wonderful—

to promote the plan for Australian jobs. At this stage it is a campaign that is under development, so we do not have any details we can share.

She went on to say that, yes, the expenditure is committed in the current financial year.

If I consult my watch, it is now only six months till Christmas, as indeed it was six months from Christmas. My estimation is that we have 3½ business days left to spend the $10 million, but there do not yet seem to be any specifics as to where that is going to be. Ms Watson was somewhat more hopeful in her answer to Senator Colbeck in which she said that the campaign is still 'under development'. Let us hope that it gets somewhere in the next 3½ days.

Where are the problems in this? The first, of course, is waste. This is simply going to create a new bureaucracy, one in which industry will probably not be a participant or a consultant, because this government has demonstrated in the time since 2007 that you certainly do not consult meaningfully with industry. If you are the Treasurer and you think you get some political mileage out of it, it is all right to tickle them up and to start class warfare against industry and business, particularly people who are generators of huge employment around the country. They are fair game. I noticed in an answer in question time today that the Leader of the Government in the Senate, Senator Conroy, talked very proudly about the number of jobs created under Labor. Let me tell you: more than 70 per cent of those jobs have been created in my home state of Western Australia, and you would have to walk a long way on a hot day, Senator Williams, to find anybody in industry and business that would agree with a statement that the Labor government has been in any way associated with that job growth in Western Australia.

Therefore we are going to see a new level of waste. We have the objectionable proposal that the government may seek to embed public servants into private companies' workforces to shape and possibly even dictate their purchasing decisions. Can you imagine that? Can you imagine such a scenario at Clough, an engineering company with a long, proud history of doing work throughout Australia and our region? I would just love to see the look on Harold Clough's face when a bureaucrat comes along and is introduced to him and he is told that that person not only is there embedded into his company but will be part of the decision-making process.

As usual with legislation that comes in from the government, there is a lack of clarity around the legislation. We do not know when it is due to start, and we do not know many of the elements of it. The exposure draft of the bill indicates that there will be a lowering of the threshold to $500 million. But what effect will this have on affected projects, which will rise from, in this case, some six per cent to 26 per cent? We do not know what the implications of these issues are.

In the few minutes that I have left I really want to focus, because jobs for Australians are so critically important. The way that you create employment in this country, particularly employment in new industries, is not to run around the countryside imposing bureaucrats into boards or into the decision-making process of companies. The way in which you do this is to sit down with business and industry and work out what government can do to help, not what government can do to stand in the way or put more burdens in place. What can government do to facilitate? Regrettably, when I ask myself that question, all I do is see where the obstacles have come.

If we look at the car industry, I think a million cars were sold in this country in 2011. I think it was a record. Of that million, 200,000 were manufactured here in Australia. If my numbers are correct, it is somewhere near the lowest number of cars produced in this country since the 1960s. Here we have a situation in which eight out of every 10 vehicles are imported, and 200,000 then—and far less now, of course—were manufactured locally, so the government imposes a carbon tax. This had two effects. One was to increase the average cost of Australian manufactured cars by $400 per car, and the other, as a direct result, was to cheapen imports so that Australian manufacturers were disadvantaged. I know there are issues associated with the Australian dollar. I know there are issues associated with the industrial climate in this country. But something as simple as that is such a key issue.

I have a branch office in Kalgoorlie in the Goldfields, so I obviously interact a lot with employers, with employees, with workers and with communities in the Goldfields. What a tragedy that it is estimated that we are losing somewhere around 3,000 jobs in mining, mining construction, mining exploration and extraction in our state alone. Why? Certainly there are a range of issues, and I do not pretend that there are not. The dollar has been high and it is now coming down. We have got to the stage where when China coughs we all get pneumonia, and that is an issue that has to be addressed. The price of gold has dived. More importantly than that, since 2008, any encouragement by this government to invest in mining exploration in Western Australia has ceased.

I recall that not long after our state election I asked Senator Conroy how the Prime Minister was going to explain the drop-off in jobs. Senator Sterle, who should have known better, abused me by laughing and carrying on and said, 'Why don't you get out there and talk to industry?' Well, industry have been talking to me and they have been telling me about the disastrous effect this government has had with the mining resource rent tax and the carbon tax. I plead for Australian jobs, but I do so from a climate of consultation and not a climate of conflict. That is what we must do to achieve change.