Lee Rhiannon (NSW, Australian Greens) Share this | Hansard source

In the global financial crisis 125,000 manufacturing jobs were lost. Imagine the hardship that that brought on an individual, a family and at a community level. Then think of the spin-off from that in terms of the implications for society and the hopes of young people about where they can find a job—hopes that are fading for so many. It is a reminder of the obligation that we have to address this issue. Australia can have a strong manufacturing future but it needs a hands-on approach by government. It needs a commitment by government to address this issue.

This idea of leaving it up to the marketplace—which is basically how you could sum up Senator Macdonald's speech, and we could have saved ourselves 20 minutes—is where the government are stuck. A strong manufacturing future will not be achieved if that is the current approach of the government. There is, however, a logical solution. Much of that solution comes if we can commit to local procurement policies at all levels of government: local state and federal. This is where we can deliver local jobs, a healthy future for manufacturing and the obvious economic boost that will go with that. Imagine the local jobs that would be created. I understand that the purchasing power at a federal level is about $40 billion. So, if we got behind local procurement, the benefits here would be huge. Imagine the jobs that could be created within the steel industry, in paper manufacturing and in materials for the defence forces. When you think of all the government departments, there are so many areas where a local procurement policy could deliver.

We have some challenges, though. I cannot see the coalition immediately changing, but there are also challenges with how Labor is addressing this. I will come to what happened in the federal election—it gave quite an insight into issues to do with Mr Shorten and even his leadership on it—shortly. It looks like this is an area where Labor is captured by some of the big trade negotiators, corporate interests et cetera, rather than getting back to how we ensure that we are getting jobs growth linked to local procurement. We heard a very interesting and a very useful contribution from Senator Carr just now, detailing Labor policy. That Labor policy gave you the impression of a commitment from Labor to procurement. I imagine that it was probably a very good debate at the national conference of Labor about this all-important issue. But you have to ask: is it going to be adopted here? Is it going to become the policy of Labor, because we know that Labor MPs in this place are not bound to follow their own policy. It is an interesting one.

Going back to April this year, there was much debate then and during the election, about the future of the steel industry in both Port Kembla and Whyalla—a very serious situation. When I visited Port Kembla, when I talked to my colleagues in South Australia, many people were constantly concerned that we might wake up one morning and see on the front of the local paper that the steel industry had closed, so it was getting a lot of attention. Opposition leader Bill Shorten gave a commitment that really had all the hallmarks of a commitment to mandated procurement for steel, but what we saw a few days later was that that position was reversed.

Mandated procurement on all government projects backed by stringent antidumping and quality control rules would provide a viable survival plan for the steel industry. That is certainly the position being advanced by local unions and local union industry bodies such as the South Coast Labour Council. This position is also backed by the Greens. It was in mid-April that Mr Shorten made a similar statement, but then a few days later that position was reversed. I would argue that the people of the Illawarra and the people of Whyalla should be informed why that position was the reverse of the announcement that he had made just the previous week. We know that a steel industry rescue plan would give security to the current industries and would then start to protect thousands of jobs.

What is interesting in New South Wales is that New South Wales Labor is not following what federal Labor is doing—federal Labor seems to be all over the place on this issue. New South Wales Labor came on board with the Greens' steel protection bill. That was voted on and agreed to when it came before the New South Wales upper house. This is a very significant breakthrough, and you would have to say it is a step forward when we see that Labor is recognising that the steel industry needs government intervention to survive. That is how I would sum up the decision in New South Wales, and that is now what we are calling on Labor to recognise and get behind—solid procurement policies at the federal level. The industry needs procurement and guaranteed support, and that is what we got. The proper name of the New South Wales bill—I would urge people following this debate to look at this bill because it is a breakthrough for Australia—is the Steel Industry Protection Bill 2016. That is the one that passed the New South Wales parliament.

I would also congratulate the South Coast Labour Council, the Australian Workers Union and Port Kembla for the considerable work they have done in driving this campaign, and also the Illawarra Greens. They put in a very useful submission to the inquiry that we had on this very issue. Some of the proposals that they put forward called for: a mandate of 100 per cent structural steel procurement for all projects across all three tiers of government; more effective antidumping measures; and a stringent quality assurance regime for steel used in all building and construction works, public and private, in Australia. Outlined in the Australian Steel Institute's submission to the inquiry was investment, including public sector co-investment, for a transition to technologies in manufacturing and the use of renewable power supplies to reduce greenhouse gas initiatives. So there is comprehensive work being done in this area. I acknowledge there are many challenges, but, again, we need to catch up at the federal level with what is happening at local and state levels. Also, let us remember how urgent this is, because people's jobs are in the balance, local economies are under pressure and we need to give certainty to these industries.

The Greens do stand with steelworkers in calling for the Commonwealth and all state and territories to make it mandatory to use Australian steel in all publicly funded infrastructure projects. Surely we should be able to get behind that? We are talking about Australian steel in publicly funded infrastructure projects. You can really argue that it is not about disadvantaging the private sector; we are looking after jobs—we are boosting jobs—we are bringing certainty and we are addressing the all-important issue of how we can ensure that there is a viable future for the steel industry.

Again, to emphasise, we are keen to work with Labor on this issue. I know many of the unions who regularly come here and lobby us on this issue are certainly keen to see a repeat of what happened in New South Wales. It took time, but it happened—where the Greens, Labor and the unions worked together to protect the steel industry and took that campaign into parliament and got it into law. Now we need to achieve that at a federal level.

I also want to emphasise the vulnerability of so many of the workers in this industry. I have toured the steelworks at Port Kembla. They are only a shadow of their former self, but they still employ workers and still are very much part of the community. We did the Senate inquiry there, and when I visited and met with the workers directly so many people said to me—workers in the industry, those who lived in the area but were not associated with industry—that they could not imagine the Illawarra without a steel industry. It is on the minds of so many people, what will happen to this area. They know that they are vulnerable due to the downturn in global steel prices and the dumping of below-cost steel into the Australian market. These are the conversations that I am having with local people. They are following what is happening with the price of steel overseas, they are feeling under pressure and it is, again, a real reminder that we have a responsibility here.

There has been some useful work undertaken by BIS Shrapnel that was commissioned by the unions on the south coast of New South Wales. That showed that a significant proportion of steel imported by Australia is reputed to be dumped at prices which are below the cost of production. That means it ends up that there is a loss for the Chinese and the Asian producers; however, for what they see as benefits in other ways they are willing to take that loss and dump it on the Australian market so that they can gain more long-term control.

There is a solution here, and, as I said, that solution lies in looking at the domestic market. Clearly we can have a big impact on the domestic market, and that is what we are proposing. But any further loss of market share will force even more domestic product into the unprofitable export markets for the steel industry, and that is where we are arguing that this federal parliament needs to give close attention to this issue. Looking at the state of domestic production, currently it supplies less than half of the steel used in public-sector construction. I will repeat that: less than half of the steel used in public sector construction comes from the domestic market. Again, I am emphasising this as a reminder that this is not hard; there is a very logical, readily available solution to ensuring that we retain the steel industry. We need to work on cleaning up that industry, but we need a steel industry for jobs growth, for the economy and for growth in many industries, one obviously being the renewable sector.

I have just mentioned some of the problems with Labor's contradictions in grappling with this. One thing I often find is that they hide behind statements like, 'Well, the trade agreements don't allow us to do that.' Either that is an excuse or they are out of touch, because a number of countries have negotiated to be able to have local procurement. Many states in the USA have done that, Canada has done that and our own state of Victoria has enacted its own local procurement policy. Victoria is an interesting case in point. Its policy has been successful with the local content proportion, averaging 86 per cent over the decade to 2013-14. This has led to an estimated $7 billion worth of import replacement. Again, it is a reminder: here is Victoria, with a local procurement policy in place—something we could do at a federal level—that has displaced $7 billion of imports. Obviously there is a real spin-off locally.

And we know that there is a big cost advantage here. I again quote from BIS Shrapnel:

BIS Shrapnel estimates that a local content policy achieving a 90% local steel content:

Will cost an average of $61 to $80 million annually in extra costs to the public sector …

That represents an average of only 0.2 per cent of total construction costs for public projects, so it is not a big cost burden. The work has been done here. We can see the economic burden, and any of these scare tactics which I have heard in some of the comments from coalition senators today about how it is financially irresponsible do not stack up; they do not stack up at all. The extra cost is based on the assumption that the price of locally sourced steel is 10 per cent higher than the equivalent imported product. So, you can see that it is a very responsible assessment of how this could work.

I do congratulate the unions involved here and in South Australia and around the country in giving so much attention to this issue of local steel procurement. The ones I have worked closest with are in my own state: the South Coast Labor Council and the Australian Workers Union—the Port Kembla branch in particular—who have really gone into this in-depth, have really driven and given leadership on this issue. It is time we ensured that when we are spending public money we get value for that money. Those figures I have just shared with you show how extensive that value can be, and that should be where we take things.

When I started this speech I mentioned the figure of 120,000 manufacturing jobs having been lost since the global financial crisis. Another area that could benefit from local procurement has been particularly hard-hit by these job losses. About 10,000 jobs have gone from the pulp and paper section, which is about half of the total workforce. This is another area where, if governments would turn to Australian suppliers for the use of paper products by federal departments, the spin-off would be enormous. I do congratulate the CFMEU for the work they have done in this area—again, effectively doing the work of government. Any decent government would have grappled with this already, would have recognised the financial and employment benefits and just got on and done what really is the job of government: to work out how we are going to address the changing nature of work, which is causing so many challenges for our society.

The issue of pulp and paper is an area where we need to address how we get Australian made paper into government departments. As I said, this is a top priority for the CFMEU. So we support the use of Australian made paper, but we do ask the union to take on board that it also needs to be FSC certified paper, not sourced from native forests. We need to ensure that we are having wins for jobs, a win for the economy and a win for the environment. That is certainly possible, and that aspect needs to be built into a procurement policy around pulp and paper. Departments should audit their existing purchases to examine what imported products are being purchased or are due to be purchased and determine whether there is an Australian made alternative that provides better value for money. That is something the Greens support, with the provisos about products being manufactured here while also having that environmental protection in place.

We need to ensure that current Commonwealth supported building and construction projects are sourcing local products. That is also set out in the CFMEU campaign, which expands the work I have been talking about. They set it out thus:

Maintain and strengthen Australian Industry Participation requirements by mandating a "Look Local First" emphasis for new purchasing of building products for taxpayer supported infrastructure or construction projects.

That is a good way to phrase it. We need to be changing the culture of how governments go about their work, and a 'look local first' emphasis would help to achieve that. I think there is a great benefit in that.

I understand that the government has a purchasing power of about $40 billion, as I said earlier. Essentially, what we are saying is: let's put that to good use so that we are promoting and increasing Australian jobs and doing more to protect the environment, and the economic benefits will be fantastic. Again, to my mind, this should be the core part of government work.

Life changes, the nature of work changes and the nature of economies are changing, sometimes with great rapidity. We are in the middle of such a time at the moment. I imagine most people here have read some quite disturbing articles about the levels of unemployment that could be coming down the track. We need to address that, and procurement at all levels of government—local, state and federal—is one way to achieve that. I commend that, and I thank the Nick Xenophon Team for bringing this motion before the chamber.