Kim Carr (Victoria, Australian Labor Party, Shadow Minister Assisting the Leader for Science) Share this | Hansard source

I present the interim report of the Economics References Committee on the future of Australia's steel industry, on behalf of Senator Ketter, the committee chair.

Ordered that the report be printed.

I move:

  That the Senate take note of the report.

This inquiry is at a time when there is grave concern being expressed across the country about the future of Australia's steel industry, particularly the uncertainty around the future of the Arrium steelworks in Whyalla. I remain confident that, with the right policy settings, Australia's steel industry can survive and flourish.

If domestic production were to cease, our construction and infrastructure sectors, which employ more than a million people, would be vulnerable to further import delays, fluctuations in global prices and of course increased transport costs. The loss of these capabilities would have serious repercussions throughout the economy.

At a local level, the prosperity of Whyalla and the surrounding region is built on steel. The steelworks, as I think all in this chamber would acknowledge, are the town's major employer, and Arrium's workforce generates much of the demand for other local businesses and services, including health care and education. For many thousands of people in Whyalla, their prosperity depends on the success of the steelworks. Simple matters, like being able to buy or sell a house, depend on the capacity to ensure the steelworks survive.

The future of the steelworks is too precious and strategically too important to this country for governments to sit idly by and watch it disappear. In Arrium's submission to the Senate inquiry, the company said quite clearly:

The continuation of the status quo will, from Arrium’s point of view, almost certainly result in the closure of steelmaking facilities in Australia.

They put it to us:

It is simply not sustainable, given the current low margins and prices and the ongoing pressure from cheap imports, for Australian steelmakers to continue to operate as they are.

Around the world, governments are taking action to support their steel industries. We are seeing what is happening in the United Kingdom, for instance—

Senator Canavan interjecting—

As you know, I am only too happy to take that interjection. I have no trouble at all on the question of ensuring the maintenance of our coal industry. But the particular issue before the chair is the steel industry, Minister Canavan.

I am very concerned that the Australian government, under this Prime Minister, has shown little enthusiasm. At best, you could say the support that has been provided has been lacklustre. To date, the best proposition put forward by this government in regard to the future of the steelworks is a line of credit through the Export Finance and Insurance Corporation. We understand that an Efic loan is a line of last resort: it is very, very expensive. But it is nowhere near satisfactory for what is actually required under the circumstances. It simply does not go far enough for the sorts of policy reforms that are needed to secure the future of the industry.

As we debated just yesterday, this chamber recognises that governments have a critical role to play in ensuring we have strong and sustainable Australian industries. Frankly, that is something the neoliberals and right-wing conservatives in this place and in the media fail to recognise.

Although the outcome of the sale and recapitalisation process for Arrium is not yet determined, it is clear that a range of measures will be required to secure the future of the steelworks in Whyalla. In this case, we are talking about trade policy, implementation of changes to procurement policy, enforcement of Australian standards, use of Australian steel in infrastructure projects, access to finance, and support for the supply chain in the Australian steel industry. So I urge senators on all sides of this chamber to study this committee's report carefully. I urge the government to adopt these recommendations to help secure the future of this vital and strategically important industry for the future of this nation. I seek leave to continue my remarks later.

Leave granted; debate adjourned.