Ron Boswell (Queensland, National Party) Share this | Link to this | Hansard source

I rise to speak on a matter of grave national importance—the destruction of industries and jobs by a Labor government that simply does not understand how business operates. Australian businesses are operating in an increasingly tough global marketplace but are being burdened with government-generated costs that are destroying their competitiveness. As a result, imports are rising and exports are falling under this Labor government.

Australia’s fastest growing export commodity is jobs. Another 60 Australian jobs will go in June when Penrice Soda closes its soda ash manufacturing plant in Adelaide and instead will begin importing soda ash from America. The company blames the high Australian dollar, low international shipping costs, increasing energy and labour costs and increasing taxes—notably the carbon tax; I throw in renewable energy here—and increasing regulatory compliance costs.

They singled out the carbon tax, saying the already high carbon tax will hit $8 million in 2½ years time. In reply to a question in parliament about Penrice earlier this month, the Prime Minister said the impact of the carbon tax on a tonne of soda ash was around $1.20 a tonne. That may not seem like a lot to the Prime Minister, but it is enough to help force Penrice to cease production. Then you have to throw in renewable energy—about 90c a tonne on that. The Prime Minister also blamed, and I quote:

… lower international shipping costs, which are making imports more competitive.

What hypocrisy! What the Prime Minister did not say was it was her government's 2012 coastal trading bill that made coastal shipping so expensive. It pushed up coastal freight charges by 16 per cent and will slug the Australian economy more $460 million. The legislation protects the PM's mates in the Maritime Union from the very same international competition she expects business to cope with. Take the case of the pipe-making business in the western suburbs of Sydney called Pentair. It celebrated 50 years of pipe manufacturing there last May. Next month, Pentair will reluctantly cease production and 160 jobs in Western Sydney will be lost. Perhaps the Prime Minister can drop in and see them when she is down there. Another 160 jobs, gone. Pentair's iron pipes will now be made in China and imported into Australia. More Aussie jobs exported overseas. Every cost matters. An extra one per cent here, one per cent there, a bit of carbon tax, a bit of renewable energy: it all adds up. It adds up to missed contracts and lost jobs.

Late last year, Pentair tendered for a contract for iron pipes that would have been worth about $50 million. They lost to a pipe supplier from Turkey. The Turkish price was less than five per cent cheaper, but that was enough. All the jobs and all the flow-on benefits that would have occurred in Western Sydney instead went to western Anatolia. We see closures everywhere. Blue Scope Steel at Western Port in Victoria: 170 jobs to go there; Boral: 790 job cuts announced to try to bring their costs down. There is a long list of Australian businesses moving production overseas, businesses like: Kerry Foods, 100 jobs gone; Kresta blinds, 72 jobs gone; Cussons soaps, 75 jobs gone; Aerogard, 190 jobs gone; Harley-Davidson, 212 jobs gone; and Bosch, 380 jobs gone.

There is Goodman Fielder, shutting 15 factories and cutting 600 jobs. Caltex is shutting its Kurnell refinery: 330 jobs gone. Now, Norsk Hydro has announced its aluminium smelter at Kurri Kurri, near Newcastle, will shut down, with 350 direct job losses. The company blamed lower metal prices, the high Australian dollar, rising energy costs and the long-term impact of the carbon tax. Costs are killing Australian business. The true problems with the economy are being masked to some extent by a strong mining sector. But Western Australian iron ore and Queensland coal did not save Wayne Swan's budget surplus and they cannot prop up the Australian economy on their own, either.

Imposts like the carbon tax and the tax for renewable energy are killing jobs. Take the example of a hotel on the Gold Coast. Its July 2012 electricity bill without a tax on carbon and renewables would have been $44,000. The next bill, with the extra charges, was over $64,000. The difference comprised a carbon tax of $11,870, and renewables tax of $8,614. Across a full year, that means an extra $245,000 minimum in taxes on carbon and renewables. The only place they can easily cut costs is in staffing. So, their extra $245,000 in carbon tax and renewables means four or five full-time jobs gone.

Australia once had a clear advantage in low electricity prices thanks to our abundant resources of coal but the government has robbed Australian industry of that advantage by imposing the carbon tax and higher prices for renewable energy. Renewables initially add about 60 to 70 per cent again on top of the carbon tax, but also have the effect of displacing cheaper, more reliable coal-fired power.

According to the Australian Industry Group, for the year ended 2012 electricity prices paid by manufacturers went up by 26 per cent and gas prices by 10 per cent. Meanwhile, in the United States, there is a massive resurgence of manufacturing thanks to the development of its shale gas resources. The USA is enjoying a manufacturing investment renaissance not seen there since the decades of the 1950s and 1960s, thanks to cheap power. The Labor government has thrown away Australia's international advantage as a manufacturing nation with cheap and abundant power. Senator Thorp ought to think of these things. The Australian Industry Group surveyed 485 businesses in 2012, and those businesses estimated the carbon tax had added an average 14.5 per cent to their energy costs. They face tough competition from imports from countries that do not impose similar carbon costs.

Food manufacturers are especially hard hit. More than 27,000 jobs have been lost across manufacturing since the introduction of the carbon tax. Once upon a time, some of those sacked workers might have joined a food processing line, but not anymore. The Australian Food and Grocery Council says production in its sector is down significantly, and 7,000 jobs were lost in the industry in the 2011-12 financial year. According to the council's State of the industry2012report, 335 businesses in the sector closed down or moved overseas.

You can understand why a company like Heinz has moved its food processing operations from Brisbane and Melbourne to New Zealand. With currency advantages, wages and on-costs, it costs about 50 per cent less to produce a product in New Zealand. The Kiwis do not have a payroll tax. And New Zealand has a minimal carbon tax of just NZ$1.11 cents per tonne of CO2. Australia's carbon tax is 20 times more expensive, at $23 a tonne. Of course, when food producers shut down particular commodity processing lines, or close their doors, this in turn affects Australian farmers. They lose markets for their produce. It has a serious flow-on effect. This impacts real farmers, real people.

Farmer Linton Brimblecombe was once the largest single supplier of beetroot to the Heinz Golden Circle cannery in Brisbane. That market disappeared when Heinz shut down its processing of beetroot in Brisbane and moved it to New Zealand and New Zealand factories. This has hurt the Brimblecombes, forcing Linton to reduce his permanent workforce from eight to four and significantly downscaling his business. It has similarly impacted his fellow farmers in the Lockyer Valley, west of Brisbane, traditionally a premier vegetable growing region. It is the same story for tomato farmers and others in Victoria, who have lost their markets with Heinz in Melbourne and country Victoria.

It is the lowest paid workers who are paying the costs of the carbon tax, like the 27,000 men and women who have lost their jobs in manufacturing since the carbon tax was imposed on Australia, and farmworkers and workers on food processing lines. They are the ones who, ultimately, are paying for Labor's carbon tax.

The problem spans many industries. Meanwhile, the Labor government deny there is a problem. In response to the Australian Industry Group report on energy costs, Greg Combet, the Minister for Climate Change and Energy Efficiency, rolled out a spokesman who claimed the carbon tax is 'a manageable economic and environmental reform'. Labor just do not get it—and, Senator Thorp, you ought to listen to this. Is it any wonder Australian businesses plan to hire fewer staff this year? An Australian Chamber of Commerce and Industry survey shows business hiring intentions for the first six months of 2013 are the worst in the history of the survey since it began 15 years ago. Businesses already shed almost 14,000 full-time jobs in December, and the unemployment rate has jumped to 5.4 per cent. Economists predict unemployment will get worse this year: the National Australian Bank and ANZ both predict 5.7 per cent, and JP Morgan says six per cent.

The underemployment rate is even worse. You only need to have worked for payment for a minimum of one hour in the previous week to be classified as employed. A further 7.2 per cent are underemployed and looking for more work. That makes it a total of 12.6 per cent of the workforce who are looking for a job or a job with more hours. Saying that one-eighth of the Australian workforce is underemployed better reflects the story I am hearing from job seekers.

Where are Australia's young people going to find jobs? Australian Bureau of Statistics figures show the unemployment rate for our 20- to 24-year-olds is eight per cent and, for our 15- to 19-year-olds, more than 15 per cent. And it is getting worse. The ANZ says jobs advertised online and in newspapers fell by 3.8 per cent in December, the 10th consecutive monthly decline. Job ads were down 16 per cent over 2012, the lowest level since January 2010.

This government is moving single mums from parenting payments to the lower Newstart allowance, cutting their payments to encourage them to work. Where are they going to find jobs? The same applies to the less qualified among migrants to Australia: where are they going to find jobs, when so many of the formerly lower-entry qualification jobs have been exported overseas?

Process workers are paying for Labor adding on-costs to business. These are the people the government has on $38 a day, while at the same time the very businesses—the production lines, the food processors—that could give them a break are being forced to close down or move overseas. What is needed is to strip unnecessary, unproductive, job-killing costs out of the manufacturing process. Get rid of the job-killing carbon tax and the renewables tax, and reduce the cost burden of regulations.

In a survey late last year by the Australian Chamber of Commerce and Industry, more than 80 per cent of small- to medium-sized businesses complained about the cost and complexity of employing workers, wages and conditions of employment, and workplace health and safety. Most of them said that government red tape had increased and was having a significant impact on their business, with more than 40 per cent spending over $10,000 a year in compliance.

Business is not a bottomless well. It cannot pick up all costs incurred by the government any time the PM or the union movement want to ingratiate themselves with the electorate. The government is bringing in extended flexible hours for parents returning from maternity leave—another cost on business. The government also says all workplace bullying will be referred to the Fair Work Commission; that will involve extra legal and other costs for business. The natural reaction by business owners is to not take on staff, or employ temporary staff or contractors, or to simply try to work even longer hours themselves.

Every day, the Labor government puts out another stunt. Now there is the Prime Minister's industry plan, which in fact will add more costs to industry and which business leaders say is not the way to create jobs. What they say is needed is cheaper energy and more flexible labour rules. This government does not get it—well, I think sometimes they do, but they do not care. They just keep on, with more stunts and thought bubbles, more costs and demands on industry, and more bureaucracy and paperwork adding to the burden of businesses large and small. Every extra government cost makes it harder and harder for businesses to employ the $38 a day Newstart allowance people the government want to force to find jobs.

The Labor government's high-cost policies are going to do nothing more than produce a diaspora of Australian businesses. Former Australian businesses will be spread around the world, going to countries without crazy energy taxes and unnecessary cost burdens, and creating over there jobs that once upon a time employed Australians.