Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern Australia) Share this | Link to this | Hansard source

In sadness and anger I move:

That the Senate take note of the answer given by the Minister for Climate Change and Water (Senator Wong) to a question without notice asked by Senator Macdonald today relating to Cement Australia in Rockhampton, Queensland.

The sadness is because tonight 32 Rockhampton families will be facing the bleak prospect of unemployment, of the main breadwinner of the family being without a job. I congratulate Cement Australia for, in their announcement of the shutting of the Rockhampton plant, indicating that alternative jobs within the company will be offered and that any employee choosing not to accept an alternative job will receive their full entitlements as well as retraining assistance, if required. The jobs in other parts of Cement Australia would not be in Rockhampton, and that means 32 families will face the prospect of being unemployed or packing up all of their belongings, selling their houses and moving to a distant town.

I speak in anger because it was all so avoidable. The disaster that has befallen the cement industry in Australia was predicted in any one of the four Senate inquiries into the Rudd government’s CPRS proposal. This statement from the Cement Industry Federation Australia, which was tabled in the Senate Select Committee on Climate Policy, predicted exactly what happened. I asked Senator Wong in question time whether she bothered to read the evidence, whether she bothered to have serious negotiations with the cement industry and whether she understood what her proposal was doing to those factories and to the people employed in them. Senator Wong, of course, did not answer the question but started prattling on about clinker getting the 90 per cent assistance. The cement industry, in all of the submissions they made to the government and to Senate inquiries, said that they could get by with 90 per cent if it were for the whole industry—not just the clinker part. I am not sure if Senator Wong ever understood that. Clinker is not the cement industry; it is a part of the process. But Senator Wong and the government are so arrogant that they were not prepared to listen to the pleas of the industry.

In their submission, the Cement Industry Federation said this about the decay in the assistance—that is, the rundown in assistance after the first years. They said:

The Australian cement industry can only remain competitive if the assistance rate for EITE industries remains constant until a global scheme is implemented. The decay of the assistance rate will diminish the competitiveness of the Australian cement industry leading to the premature closure of production facilities and deter new investment which contradicts the commitment made by the—

Labor—

Government in the 2007 election campaign to not disadvantage EITE industries.

It was all predicted there. We were all told what was going to happen, regrettably, in Rockhampton today. One can only surmise that there will be other closures around Australia in the future. The industry cannot compete with this sort of taxing. It is the fear of what Labor will do that is causing the lack of investment and has caused this plant in Rockhampton to shut down today. Already, in evidence to committees, Cement Australia have told us that their $750 million new plant proposed for Gladstone would not go ahead because of investment uncertainty. This is a double blow for Rockhampton. I am not sure what the Labor member, Kirsten Livermore, is doing about it. The meat factory in Rockhampton will face the same outcome if this proposal from the Labor government goes ahead. (Time expired)

Kate Lundy (ACT, Australian Labor Party) Share this | Link to this | Hansard source

It is very disappointing to hear the opposition seeking to make political points off the back of a plant closure that we all know is largely attributable to the global recession. It is not believable to try to link Cement Australia’s decision with the Carbon Pollution Reduction Scheme when global recession has caused a 25 per cent drop in global demand for cement.

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern Australia) Share this | Link to this | Hansard source

Why did they say it was the CPRS?

Kate Lundy (ACT, Australian Labor Party) Share this | Link to this | Hansard source

The fact is that, under the CPRS, as I am sure Senator Macdonald knows, clinker production—which is the emissions-intensive part of the cement production chain—would be eligible not for 90 per cent free permits, as Senator Macdonald explained, but in fact, as Senator Wong explained in her answer to the question during question time, 94.5 per cent free permits with the scheme not commencing until 2011. I think it is important to remind those in the opposition of Mr Turnbull’s comments yesterday. He described the industry package as:

Appropriate protection for key energy-intensive trade-exposed industries …

Far from Senator Macdonald’s articulation of the issue—which I think was very close to misleading—if clinker production is determined to be eligible for the highest rate of EITE assistance, the government’s proposed assistance package is estimated to reduce the carbon cost associated with the production of a tonne of cement from under $8 per tonne of cement to around $1 per tonne of cement in the first year of the CPRS, in the context of a cement price of around $120 per tonne in 2007. In the second year of the CPRS a carbon cost of $20 per tonne of cement will be reduced to less than $3 per tonne of cement.

As Senator Wong said in her answer to the question, it is not believable to try and link Cement Australia’s decision with the CPRS when cement producers who sell cement for $120 per tonne will only have to pay $1 to $3 per tonne for carbon as a result of the CPRS. It is a very irresponsible and fearmongering approach to come in here and berate the government in the way that Senator Macdonald has sought to do in taking note of this answer today. More than anything else, the CPRS would provide certainty to industry. To come in here and mount an argument that it is the uncertainty that is causing these problems is the height of hypocrisy, given we saw the opposition vote against the CPRS legislation just last week.

The opposition cannot have it both ways on this issue. They cannot bleat about uncertainty when they are the creators of that uncertainty and when they, in voting against the CPRS in this place last week, denied the Australian people and Australian businesses the opportunity for certainty.

I would like to make another critical point on this matter. As Senator Macdonald and the whole of the opposition, I presume, know, the government’s modelling shows that Australian cement production will continue to grow strongly under the CPRS, with the industry roughly doubling its size by the year 2050. This is important modelling, as the opposition knows. The opposition chooses selectively, using modelling when it suits their flimsy arguments and rejecting it when it does not.

The opposition’s shallow political stunt today of trying to gain political points from and play politics with very unfortunate circumstances brings their whole outfit into great disrepute. A global economic recession is a time when we all have to be a little mature about things. We need to support the jobs of Australian workers and support the future of Australian businesses in critical infrastructure industries like the cement sector. I find it very disappointing that today we have seen Senator Macdonald—and remember that he represents part of the Queensland electorate—come in here and fly off the handle, picking and choosing the facts as he sees fit while putting forward a highly hypocritical argument in relation to the position the opposition took on the CPRS. (Time expired)

Russell Trood (Queensland, Liberal Party) Share this | Link to this | Hansard source

I hope when the government senators leave this place at the end of the day when we adjourn for a short break that they will reflect upon the way in which the government has mismanaged the agenda in this place over the last two weeks. Before the end of the day, we are likely to pass the renewable energy target bill. We are likely to do that because the opposition has been—as it has always been on these issues—prepared to engage in negotiations and constructive dialogue with the government about this particular matter. What a contrast that has been to how the CPRS has been dealt with, where, notwithstanding all the efforts that were made on behalf of the opposition to engage the government sincerely and truly with regard to its deeply flawed scheme, it has rejected our overtures. We now have a situation where we will leave this place this afternoon and we will have not passed the CPRS but in all likelihood we will have passed the RET scheme.

The people who have to accept responsibility for that failure are those in the government. They have to accept the fact that we were prepared to assist with this particular legislation. We rejected the CPRS legislation because it was a deeply flawed piece of legislation. It was a piece of legislation which would have wreaked havoc on the Australian economy. It was a piece of legislation that would have destroyed Australian jobs. It would have undermined our trade competitiveness and Australian families and Australian business would have incurred crushing burdens. We on this side of the chamber believe that we did the right thing in protecting the Australian economy. And it would have provided almost no particular assistance to the environment and would have done even less for the problem of climate change.

The cost burden is significant. Compared to other emission schemes that are in place or in prospect around the world, the costs which would have been imposed upon the Australian economy were significant. In the US, calculations have been made that the scheme might impose a per capita figure of something in the vicinity of $57. In Europe, it is only 80c. In Australia, the burden which would have been placed upon Australians if the CPRS as drafted by the government had passed would have been in the vicinity of $440 per Australian. That is a burden that no Australian should be forced to bear, particularly in the context that we are a country that emits something in the vicinity of 1.5 per cent of global emissions.

No part of the country would have borne the impact of this imposition more than my state of Queensland. It is a state which is highly decentralised. It has a decentralised population and it has a very diverse and decentralised economy. The consequence of that diversity and decentralisation is that, of all the states and territories of the Commonwealth, my state of Queensland would have felt the greatest impact. Particular industries would have suffered more so than others. I am thinking of the mining industry, where the costs are frightening. An assessment by Concept Economics suggests that if this particular CPRS had been introduced it would have cost in the vicinity of 11,400 jobs directly in Queensland by 2020. By 2030, the figure would have been in the vicinity of 34,000 jobs. That is 34,000 Queenslanders out of work as a result of a scheme which is deeply flawed and which would make no significant contribution to solving the global emissions problem. The annual loss to Queensland taxpayers would have been in the vicinity of $1.6 billion. All it would have done would have added to the significant deficit of the Queensland government. (Time expired)

Mark Furner (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

I rise today to also take note of the answer given during question time today about job losses at Cement Australia. To some degree I have had experience dealing with workers, as a proponent for working families. Unfortunately, in the past I have had to deal with redundancies. As an official I had to go into workplaces and resolve matters of redundancy and ensure that those workers’ conditions were protected. Those opposite only two years ago introduced Work Choices, which led to the demise of workers’ conditions, particularly the redundancy provisions in their awards and agreements.

We had someone come into the chamber today using their political advantage to claim that the closure of a plant in Rockhampton has something to do with this government’s CPRS legislation that deals with the most significant issue in history—climate change. It is extremely disappointing that somebody raised that in this chamber to capitalise on the cheap political stunts. It is interesting that Senator Ian Macdonald raised this subject.

I was part of the Senate Select Committee on Fuel and Energy that visited Gladstone on 7 April this year. Mr Ritchie, National Sustainability Manager of Cement Australia, gave evidence before the inquiry and fundamentally outlined the reasons why Cement Australia is having difficulty. I would not go so far as to say that Senator Ian Macdonald is misleading the chamber, but certainly we need to recognise some points that are relevant to this debate. The chair of that inquiry asked:

How have difficult global conditions resulting from the global economic downturn impacted on your business in Australia …

To which Mr Ritchie responded:

We have certainly seen a significant decrease in demand across our business as a whole.

That is what the problem is here. It has nothing to do with the proposed CPRS that the opposition voted down. It has to do with the global financial crisis. Cement Australia recognised that in evidence it gave to the Senate Select Committee on Fuel and Energy. That is what this closure is about. It has nothing to do with the CPRS legislation. As a participating member, I asked at that inquiry:

Have you raised these matters with the government during your numerous discussions with them over the CPRS?

Mr Ritchie’s response was:

Not so much in relation to the CPRS …

You would have thought that, if Cement Australia had a problem with the CPRS legislation, they would have raised it as a fundamental issue at that inquiry well in advance of any issues around plant closure. It is quite clear from what was raised in that inquiry and in this chamber today why workers are, unfortunately, losing their jobs—because of the global financial crisis. It has nothing to do with the CPRS, nothing whatsoever.

What is the opposition’s solution? Let us have a look at the record for some of their initiatives. The member for Tangney, Dennis Jensen, not long ago claimed that he wanted to put some sort of shadecloth in orbit. He indicated that the shadecloths could be tailor-made and adjusted according to the energy balance. This is the type of ideological position that the opposition takes in tackling the huge climate problems that this country and the world face. He was described in the Courier-Mail, a Queensland paper, as being ‘completely wacky’. These are the types of initiatives that the opposition want to introduce to deal with climate change. (Time expired)

John Williams (NSW, National Party) Share this | Link to this | Hansard source

I rise to contribute to the debate on the closure of Cement Australia’s works at Rockhampton. In their media release they clearly say:

The Federal Government’s determination to pass the Carbon Pollution Reduction Scheme has meant the long term prospects for the plant have been undermined so the business has taken a decision to resolve the matter in fairness to our employees.

They say it clearly:

… the Carbon Pollution Reduction Scheme has meant the long term prospects for the plant have been undermined …

The cement industry is a vital industry in Australia. We have some 15 plants, employing some 1,870 people. The cement industry produces around 10 million tonnes of cement a year. We also import two million tonnes. We know that the cement industry is a large emitter of greenhouse gases—not from being a large user of electricity but simply from firing their kilns in the production of cement. In fact, in Australia we produce 0.8 of a tonne of greenhouse gases for every tonne of cement that we manufacture, so in total Australia produces eight million tonnes of greenhouse gases when manufacturing our 10 million tonnes of cement. But, as I said, two million tonnes of cement are also imported.

Let us have a look at China. China produces a massive one billion tonnes of cement a year. But here is the catch: when China produces one tonne of cement it produces 1.1 tonnes of greenhouse gases, compared to our 0.8 of a tonne of greenhouse gases. So what is the end result? It is as clear as the nose on your face. When our industry shuts down in Australia, we will import cement from China. So instead of producing eight million tonnes of greenhouse gas in Australia in manufacturing our 10 million tonnes of cement, we will import 10 million tonnes of cement from China, which will produce 11 million tonnes of greenhouse gases. That is the problem with the emissions trading scheme that is coupled with the Carbon Pollution Reduction Scheme that Minister Wong is proposing. We will shut down our cement industry here, lose our jobs and produce an extra three million tonnes of greenhouse gases. How farcical is that? This is what the nation faces under the proposed emissions trading scheme.

Sure there is a big discount for the cement industry—some 90-odd per cent—but as time goes on and we approach the deadline in 2020 and the targets have been met for that year, those discounts will be wound down. The permits the government will be selling will be reduced—that is how a cap-and-trade scheme works—and the industry will come under further threat. This is the huge concern we have for our cement industry.

Communities like Kandos in New South Wales rely on those jobs for their survival, their livelihoods. What happens when the plants are shut down? What do these people do? Where do they get a job? How do they pay their mortgage? How do they pay for their car? How do they clothe their children to send them off to school? This is a serious issue. Today, unfortunately, is the first piece of bad news in the cement industry, but we are going to see more of it as time goes by. The government must realise that their proposed Carbon Pollution Reduction Scheme—and I hate using that term ‘carbon pollution’, because carbon is not a pollutant; if you look at the list of the 93 pollutants that exist, carbon is not mentioned—will threaten industries if they proceed with it. As I said, Cement Australia are saying that the threat of this is enough to undermine their confidence in the industry and hence has caused the closing of their plant.

What are we going to do when we shut up so many of these industries and lose these jobs? Are we simply going to import everything? What will our balance of payments figures be like then? They are just going to tag them onto the foreign debt to balance the monthly current account figures. I wish the government would reconsider the damage they are causing to industries here in Australia. We have already seen too many of our industries move overseas for reasons of cheap labour, to get the products here more cheaply. Australians cannot compete against that cheap labour, especially in Asian countries. But, no, the government are going to continue on their road. This is the start of it. Let us hope that some common sense is brought to this debate before job after job is lost in not only the cement industry but many other industries around the nation.

Question agreed to.