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

The Australian Greens are strongly committed to ensuring that workers' jobs are secure and industry moves onto a greener footing. The Steel Transformation Plan Bill we have before us tonight is far from perfect. The Greens have looked at it closely. We have weighed up the legislation and it certainly deserves our support. I and my colleagues Senator Bob Brown, Senator Christine Milne and Mr Adam Bandt have paid a great deal of attention to this issue. My own opinion on the need for this legislation has been informed by my many visits to the Illawarra area. In the Illawarra, unemployment is often double the national average. We have seen the downturn in the manufacturing industry impact on this area particularly heavily. Across the nation, 30,000 jobs have gone in the last three months, and the Illawarra is where many of those jobs have disappeared from. The essence of this bill is about a package of $300 million going to the steel industry. One hundred and eighty million dollars of that money will go to BlueScope Steel in the Illawarra. I know that this package will make a difference in terms of the confidence and security that many workers and their families and local businesses will feel and receive.

The Greens will be moving a second reading amendment to this piece of legislation. That amendment would add, at the end of the motion:

and that the Government, in allocating funds under the Steel Transformation Plan, pay particular demand to the Green Jobs Illawarra Action Plan and any other similar plans in other affected regions.

This plan is something that I strongly recommend that members acquaint themselves with. It provides a model that could be used in many other regional areas. At the request of the South Coast Labour Council, Senator Bob Brown and I visited and talked with a number of people on the South Coast about this plan in the context of this legislation. This plan has been developed by the South Coast Labour Council, the University of Wollongong, Illawarra TAFE, the Illawarra Business Chamber and the Australian Industry Group. It is a plan that impressed Senator Brown and me so much that we believed that this second reading amendment needed to be moved. The plan sets out in a great deal of detail the jobs that can come with a shift to a greener economy and greener communities. I very much congratulate all those who participated in devising the Green Jobs Illawarra Action Plan.

A discussion of this plan really has to make reference to the role that the coalition have played since it was first reported that there was consideration that this package needed to be brought forward. You would have to describe their tactics as extreme scaremongering in the steel towns, particularly in the Illawarra and Whyalla, with that extraordinary statement where the Leader of the Opposition tried to make out that he was a friend of the workers while at the same time saying that the opposition would not support this package. Clearly these people from the coalition have no intention of helping workers—no interest in that—while at the same time they are trying to use crude tactics through the media to make out that they are workers' friends.

I was very interested to see how this played out in the Illawarra at a 'no carbon tax' rally, where obviously there was hope by the coalition that they would be able to grandstand in front of the locals. Well, the locals of the Illawarra saw them coming and are well experienced with coalition people who try and con their way into pretending that they have interest in the working people of this area. In this case, it was Senator Barnaby Joyce and Senator Concetta Fierra—Fierravant—

Concetta Fierravanti-Wells (NSW, Liberal Party, Shadow Minister for Ageing) Share this | Link to this | Hansard source

Learn to say my name properly if you're going to do it.

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

I do apologise, Senator Fierravanti-Wells. They attended this meeting in the Illawarra. Probably the reason for that interjection is that this is a sensitive issue. That meeting was a disaster. They left because their position was just so out of touch with the needs of the local people, in terms of both the carbon tax and the Steel Transformation Plan.

The Greens recognise that strong climate action is directly linked to the long-term future of the steel industry in Australia. The rolling out of renewable energy and new electricity grid infrastructure will mean tremendous amounts of steel are needed. There is an important link here. Strong climate action will give the steel industry a huge domestic market. If we get it right, effectively what we can be doing here is protecting jobs in many regional areas, linking the steel industry to the transition plans that clearly will kick in now we have successfully passed the climate package legislation.

Another part of this interesting story is the role of the leader of the Australian Workers Union, Paul Howes. He has called on the Labor government, I understand, not to support this second reading amendment. It is quite a simple amendment. It is an amendment that in no way threatens the legislation. The Greens have been clear that we will support the legislation, but why not improve on it by highlighting the benefits that this jobs action plan could bring?

But here we have had Paul Howes saying that this amendment should not be supported. That is an extraordinary position considering a number of his members were involved, through the South Coast Labour Council, in actually coming up with this plan. So you really have to ask this question about the head of the Australian Workers Union and occasional visitor to Wollongong, Paul Howes: is he putting his personal dislike of the Greens ahead of the interests of his own members and the promotion of job projects in the Illawarra? I again emphasise that the jobs plan goes into a level of detail and that if governments will get behind it—as industry has, business has and the local education institutions have—it will really make a difference and it can be a model for other areas. As I have said, the Greens have made it clear that we will support this package irrespective of what the government does with our amendment. I again urge members of the Senate to give it their support.

The Green Jobs Illawarra Action Plan is an excellent road map. I would like to provide a little bit of detail to senators in terms of how it can help diversify the Illawarra economy in quite concrete ways that will promote long-term jobs growth in sustainable industry. Some of the aspects of the plan include the Green Street Project, retrofitting iconic public buildings, and clean energy systems. The detail is set out there, and the jobs that would be provided are quite clear. So this is something that is a winner and I really do challenge the government: why would you not support a plan that has all the components that we so often hear from Prime Minister Gillard down, where you want the workforce coming together with local business to promote the needs of their community? This is a plan that gives practicality to the important legislation that went through today. There is also a challenge here for the leader of the Australian Workers Union, Mr Howes: if he continues to oppose an amendment that backs a job creation plan, he risks being seen as putting his sectional Labor interests before those of his members, workers and their families in steel towns.

Today is a great day for Australia. We have a climate plan that has been passed into law. Now this Steel Transformation Plan is about to go through and that provides an opportunity to highlight practical measures to implement a green economy if we add this amendment to it. It is simple, there is no obligation and it means we can highlight something that can be a model to many regional areas that we are know are doing it tough and could well be facing greater hardship depending on how the current economic crisis goes.

Trish Crossin (NT, Australian Labor Party) Share this | Link to this | Hansard source

Senator Rhiannon, I just want to clarify whether you are moving that amendment by Senator Milne or whether she is going to do it when she speaks.

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

Senator Milne will move the amendment. For practical reasons I had to speak before her, but she is leading for the Greens in this debate.

Trish Crossin (NT, Australian Labor Party) Share this | Link to this | Hansard source

All right, we will wait until she moves that amendment. Thank you, Senator.

Concetta Fierravanti-Wells (NSW, Liberal Party, Shadow Minister for Ageing) Share this | Link to this | Hansard source

The Steel Transformation Plan Bill was an afterthought to the clean energy package. We are dealing with it separately because it was not part of the original package. It was dreamed up when there was an outcry about the carbon tax and the Gillard government scrambled to garner support from the very people who had helped it limp into power—in other words, the unions. It exists to stem the tide of damage caused to the steel industry by the carbon tax. How embarrassing was it for the government when Paul Howes and his AWU buddies did not publicly support the carbon tax! Why? Because they knew it was a jobs killer. That 'faceless man' had his fingers all over this. The Prime Minister knew that she had to get Paul Howes onside, so we now have this $300 million plan. It would shore up support in steel electorates and help the member for Throsby, Stephen Jones, and the member for Cunningham, Sharon Bird, who were elected with the Prime Minister on the lie of 'no carbon tax'. It is a lie we will never forget.

The Steel Transformation Plan was to get Paul Howes onside so he would publicly back the carbon tax. You only need to compensate somebody when you hurt them. If you do not have a tax, you do not have a need for compensation. In the Illawarra and in Wollongong, there are 4,740 mining jobs and 21,195 manufacturing jobs. Where is the assistance plan for these workers? The plan provides assistance to only two companies, the two biggest Australian steelmakers, BlueScope and OneSteel. It does not provide a cent to the remaining steel businesses that employ 80 per cent of Australia's steelworkers.

There are five basic flaws with this plan. Flaw No. 1: the only reason the plan is being introduced is to limit some of the damage caused to the steel industry. If there were not a carbon tax, there would not be a need for this kind of compensation in the first place. On 10 October 2011, Greg Combet admitted the establishment of the Steel Transformation Plan had been driven purely by the carbon tax when he said, 'The negotiation of the Steel Transformation Plan did come out of the discussions we've had with the steel companies for months now over the carbon price issue.' Flaw No. 2: only two firms qualify. Under the plan, only two firms—as I said, BlueScope and OneSteel—qualify for assistance because of the definition of 'eligible corporation' in clause 4 of the bill. In other words, this plan provides a re-run of the mining tax renegotiation debacle where a handful of big players were the only ones to benefit from Ms Gillard's alleged compromise on the original proposal. Every other steel business, including thousands of steel fabricators all over the country—many of them longstanding businesses that have operated in Australia for several decades—will not receive so much as a single cent of assistance under this legislation. Of course, while calculations of the precise numbers of businesses are difficult, we do know that in 2006-07 there were around 91,000 employees across the entire Australian steel industry chain. This is despite the fact that many such firms are currently facing an enormous range of costs and pressures which will only be exacerbated by the introduction of the carbon tax. This is not a plan for transformation of the steel industry. It is merely a bandaid to stave off the inevitable. As a rough estimation, BlueScope and OneSteel would now have something in the order of 15,000 to 17,000 employees. Flaw No. 3: the entire package could be exhausted within one year and one day of the introduction of the carbon tax. The plan provides for $300 million of assistance over the four-year period 2012-13 to 2015-16. However, this could theoretically all vanish within just one year and a day, because as much as $164 million can be paid out in advances before the carbon tax is even introduced and as much as $75 million can be paid out each financial year. In other words, you could have the situation where at least $150 million could be paid in advances and then the balance could potentially be paid out at any time during the first two financial years.

Even if the package does eventually last for around four years, there is also another fundamental question remaining: what is the government going to do to compensate BlueScope and OneSteel once the $300 million runs out? The so-called compensation through this plan is, as I said, just delaying the inevitable exposure of local steel production to cheaper, non-carbon-taxed steel imports.

Flaw No. 4: the amount of assistance available through the plan is completely dwarfed by the loss of share values of BlueScope and OneSteel since the announcement of the carbon tax. The government announced the establishment of the plan as part of the release of a range of details associated with the carbon tax on 10 July, yet that entire amount was wiped off BlueScope and OneSteel's combined share values on the stock market on the very next day, and then another $100 million on top of that was gone the day after.

Flaw No. 5: Labor cannot even get its own line straight on the plan. Various statements from Labor politicians, in government documents and on government websites, provide conflicting details about the length of time covered by the plan. Clause 12 of the Steel Transformation Plan Bill 2011 clearly states that the plan covers a four-year period. However, on 12 July, a joint media release was issued by Mr Combet, Ms Bird and Mr Stephen Jones, which stated:

… the Government will introduce a Steel Transformation Plan which will deliver assistance worth up to $300 million over five years to encourage investment and innovation in the Australian steel manufacturing industry.

On 29 July, Mark Dreyfus said the steel plan would provide assistance over five years, but official government websites say that the plan will operate over six years. Also, there is no explanation or requirement in the legislation forcing steel compensation recipients to reduce carbon emissions, despite numerous statements from the government that this is the primary objective of the bill.

Let me return to the Illawarra. This plan does not provide a cent to help the small and medium sized businesses that employ 26,000 people in the Illawarra in mining and manufacturing. I attended the meeting in the mall in Wollongong in July, with my colleague Senator Joyce, and was heckled by the usual union thugs dressed up as workers. We went to tell the people of the Illawarra that the coalition would not support the tax and we have shown them today that we are true to our word. We have voted against this tax. I told them then that I would be voting against the Steel Transformation Plan and that all it was was a sop to Paul Howes.

Only a month later, it was with a heavy heart that I learnt that BlueScope was reviewing its domestic steelmaking production capacity. BlueScope Steel did not have to wait for the carbon tax to review its operations. In its announcement to the Australian Stock Exchange, the company named the ongoing macroeconomic challenges of the high Australian dollar, high raw material costs and low price as the reasons for its write-down of $900 million. But, notwithstanding this, the Gillard government persisted with its carbon tax. The price of minority government for the Prime Minister is to give the Greens what they want. They wanted a carbon tax and they got themselves a carbon tax, but the Illawarra does not support a carbon tax.

I refer Senator Rhiannon to the IRIS Research Economic report September 2011—carbon tax, which I have mentioned before, which shows that only a mere 15 per cent of local firms surveyed support the carbon tax. As part of the September quarter Illawarra business survey, IRIS Research asked almost 300 local businesses about their feelings towards the carbon tax. Four out of five large businesses, 82 per cent, surveyed in the Illawarra do not support the carbon tax. Two-thirds of small businesses in the Illawarra are against the carbon tax. Almost three-quarters, 73 per cent, of medium sized businesses do not support the introduction of a carbon tax. What will the Prime Minister tell all of them next time she visits the Illawarra? What will Mr Stephen Jones and Ms Bird tell their electorates today? Will it be more crocodile tears, like the last time Ms Gillard visited? The businesses have lost confidence, just like Australian people have lost confidence, in the Gillard-Greens alliance government. More than two-thirds of local businesses in the Illawarra believe that the carbon tax will have a negative impact on them.

Is it fair? Is it justified? Judging by the lack of detail revealed by the government in this debate, it is hard to tell, but it did make a headline for Mr Howes to stand outside my office in Wollongong on 12 October and take the usual cheap shots that they do when they turn up a my office. Mr Howes threatened me. He said:

If MPs like Ms Fierravanti-Wells vote against the Steel Transformation Plan in the Senate, they should be run out of town.

Well, Mr Howes, I am voting against it, and I will just wait for you to turn up to my office again and see. Just try and run me out of town. I think you will have a problem. Of course, Mr Howes has not apologised for this threat, nor has the Prime Minister seen fit to reprimand him for his reprehensible behaviour.

The carbon tax will go on and on, but the steel assistance will run out. It will be reviewed by the Productivity Commission as part of its review of emissions-intensive trade-exposed assistance in 2014-15—another review. This government cannot get through a week without a review. It is either superconfident that it will still be in government in 2014-15 or it knows that the whole carbon tax and the steel assistance plan will be a debacle. Of course, the Productivity Commission is the government's default too-hard basket, as we have certainly seen in my own portfolio area of aged care.

Even before the carbon tax had begun, the Steel Transformation Plan was raided by a desperate government. If there was any doubt that the plan was just a slush fund to keep Paul Howes in his job, we need only turn to the fact that it took four ministers plus the Prime Minister to make the announcement on 22 August that the government was going to provide some practical assistance following the BlueScope Steel decision to reduce its operations. I quote:

These support measures are in addition to the new advance facility announced by the Government today that will allow BlueScope to bring forward up to $100 million of payments under the Government's Steel Transformation Plan.

In other words, 'Let's raid the Steel Transformation Plan even before it begins.' Of course, part 2, clause 5 of the bill allows an eligible corporation to apply to the minister for a payment of financial assistance—what is called the 'competitiveness assistance advance'—to help that corporation 'undertake activities that will significantly enhance the competitiveness and economic sustainability of the Australian steel-manufacturing industry in a low-carbon economy'. What a load of twaddle that is. But BlueScope and OneSteel are the only two corporations eligible for assistance. The money is supposed to make them more competitive. The so-called compensation offered through the plan just delays the inevitable exposure of local steel production, as I said, to cheaper, non-carbon-taxed steel imports. Take a look at the share prices of BlueScope and OneSteel. On 23 February, OneSteel's shares were $2.86. On 2 September, the price had dropped to $1.52. BlueScope's shares were worth $2.20 on 23 February. On 2 September, the shares were down to a mere 83c. Yes, the industry is under pressure now, and in Wollongong BlueScope has restructured, with over 1,000 workers being made redundant. But, as I said, only the two largest firms qualify for assistance, leaving thousands of other businesses not eligible to get one single cent.

As I indicated, from the coalition's perspective the carbon tax will not last a day under a coalition government. But it will last forever under this government—but the compensation will not. The Steel Transformation Plan Bill, in part 3, clause 13, says that the total amount of the planned payments must not exceed $300 million, and of course the money will run out. If all the money is gone by 1 July, which is theoretically possible, there is no more money available for industry assistance through the life of the plan. Talk about policy on the run to appease union mates. Some, more unkind than me, would call this plain old pork-barrelling.

But union bosses have not always had their members' interests front of mind. This chamber has heard various matters pertaining to the Health Services Union, and of course this is Labor's way. Again I quote Richo: 'whatever it takes'. Where is Peter Beattie in all of this?

Senator Ian Macdonald interjecting—

Mr Beattie was appointed as the Resources Sector Supplier Envoy—what a name, Senator Macdonald—on $1,000 a day. We have not heard a lot from Mr Beattie lately. Perhaps the Greens will ask for an inquiry to gauge whether the resources sector is getting value for money with Mr Beattie.

While the demise of the steel-manufacturing industry looms in the Illawarra thanks to the Gillard-Green carbon tax, workers should sleep well knowing that their champion, Arthur Rorris, has been taking time to write to the President of the Senate informing him of a decision of the South Coast Labour Council of 17 August. So what was the most pressing matter consuming the South Coast Labour Council recently? Was it the continuing presence of the steel industry in the Illawarra, the ongoing success of manufacturing in the Illawarra or the effects of the carbon tax on mining in the Illawarra and the flow-on effect to workers? Surely it is one or all of the above! No. Mr Rorris, in his capacity as Secretary of the South Coast Labour Council, wrote to Senator Hogg to inform him of the council's 17 August response to the Senate's resolution on—wait for it—Palestine. I will not put on the record the nature of that correspondence, but that is right, workers of the Illawarra: your South Coast Labour Council is more interested in what is happening in the Middle East than in your jobs and your jobs going down the gurgler as a consequence of this carbon tax. Of course the Middle East is of importance, but the South Coast Labour Council should be worried about its members—its workers in the Illawarra—and the workers and families of the Illawarra. They want to know how this carbon tax is going to affect their lives. How will it help put food on the table and a roof over their head—or will it stop them from doing that?

This government has betrayed the workers and the families of Australia. It has betrayed the people who voted for it on the promise of no carbon tax. The people were lied to, and they have been hoodwinked by a Prime Minister and a government captive to the Greens, whose only interest is in social engineering. Today is truly a sorry day for Australia. Will the Steel Transformation Plan reduce carbon emissions? No, it will not. There is no explanation or requirement in the legislation forcing the two companies eligible for steel compensation to reduce carbon emissions in exchange for assistance. Of course, that is what Labor would have us believe—that every word in these bills is designed to reduce carbon emissions. That is what the Gillard government and the Greens have told us. That is what people think that they are getting, but they are not. As we have seen in recent days and throughout this debate, we are getting legislation from a government whose ministers are not across the detail. We are getting yet another grubby deal between the Greens and the Australian Labor Party. This was the price that Julia Gillard paid for the keys to the Lodge.

This has nothing to do with climate change. It is not about helping the workers of Australia. It is not going to help Australian families. It is certainly not going to help the steelworkers of the Illawarra. It is not going to help Australia, and it is certainly not going to help the planet. This is about one thing and one thing only. This is about a government that, true to its Australian Labor Party tradition, will always do—as its grand master, former Senator Richardson said to it—'whatever it takes'. If it takes a very big lie that is what they will do. That is what they have done. They did not even blink. The Prime Minister did not even bat an eyelid when she lied to the Australian public and told them, 'There will be no carbon tax under the government I lead.' Ms Bird in the Illawarra did not bat an eyelid when she went along with it. Stephen Jones, the member for Throsby, did not bat an eyelid when they were elected on a lie. We will make sure that the Australian public at the next federal election have a mandate on this toxic carbon tax. (Time expired)

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

It is a pleasure for me to follow Senator Fierravanti-Wells. I congratulate her on the great work she does in the Illawarra. She is one representative who has her office there and actually works in the interests of the people of that area. I know Senator Fierravanti-Wells and her staff do a lot of work to help the people in that area, because quite clearly the current Labor incumbents—and I emphasise 'current'—of the lower house seats there are not interested in their constituents.

Senator Fierravanti-Wells interjecting—

Indeed. Judging from the visits, the local member is worried—and well she should be. But, Senator Fierravanti-Wells, you do a fabulous job there. Congratulations. Thank you for looking after that group of Australians who would be otherwise unrepresented in this carbon tax debate.

I note that Senator Fierravanti-Wells mentioned that Mr Paul Howes, the AWU supremo, has threatened to run her out of town. Mr Howes, those sorts of bullyboy threats might work in a union meeting but they will not work on Senator Fierravanti-Wells. I can assure you of that, so save it for your next union meeting. Save it for when you want to put down some of your troops who are rebelling at the lack of interest the AWU has shown in their futures. Right across Australia, AWU members are leaving the union in droves because they understand that Mr Howes and his cronies are only interested in the Labor government and their mate Julia Gillard and are not interested in the interests of the workers of our country.

In discussing this Steel Transformation Plan Bill, I want to start off by doing something fairly unusual for me, and that is to thank the Greens political party for threatening, bribing, encouraging—whatever the word is—the Australian Labor Party into introducing this carbon tax today. As I said, I do not often on record thank the Greens for anything but I do want to thank them for introducing this carbon tax and taking the Australian Labor Party along with them because, while I was pretty confident the absolute mismanagement of the Gillard Labor government since its inception a year or so ago would have meant the next election would have been ours for the taking, I can be very, very confident now after this carbon tax has passed the Senate today that the next election will see a massive swing to the Liberal and National party coalition. It will mean that, again, Australia can have decent government, the sort of government it used to have in the Howard years. I look forward to that day. I thank the Greens for their part in making sure that this cataclysmic change of representation will happen at the next election.

In the Illawarra, whilst there were plenty of reasons for state Labor members to be defeated at the last state election, the carbon tax proposals certainly played their part. I had the pleasure of going down and helping in some of the electorates in the Illawarra at the last election. We all know that there were seats that had never, ever in the 150 years of the New South Wales parliament been held by Liberals in the Illawarra area. But there was an 18 per cent swing. It had never been heard of in the history of Australia—swings to the Liberal Party in that part of the world. These are the seats of the steelworkers. These are the seats of the traditional Labor Party supporting blue-collar workers. They came to the Liberal Party in droves and that has meant that now in the New South Wales state parliament there are two or three Liberal members in an area where there have never been Liberal members before. Thank you for the carbon tax. Thank you, the Greens, for doing that. What you did in the New South Wales state election will be replicated with bonuses at the next federal election.

As my colleagues in this debate have said, if there was not a carbon tax you would not need a compensation plan. If you ever need any demonstration of the toxic impact of this tax on Australia, have a look at what is happening in the steel industry. Two particular companies, BlueScope Steel and OneSteel, are the beneficiaries of this $300 million package. As soon as they knew about the carbon tax they knew that they were in trouble. In fact, Mr Combet, the Minister for Climate Change and Energy Efficiency, said that the negotiation of this steel transformation plan that is being put into effect by this bill we are debating at the moment came out of discussions they have had with the steel companies for months now over the carbon price issue. So there is absolutely no doubt about the connection between the carbon tax and the difficulties being experienced by OneSteel and BlueScope Steel. I guess I should say to those two companies and their shareholders: 'Good luck. This government is a bit of a pushover when Paul Howes and the Australian Workers Union click their fingers.' But what about all the other steel businesses in Australia? The thousands of steel fabricators all over this country, many of them longstanding businesses that have operated in Australia for several decades, will not receive a single cent of assistance under this legislation. I am very concerned for all those steel fabricators in my home state of Queensland, the state that I represent here in the Senate. I am also concerned for those steel fabricators who operate right across Northern Australia, an area for which I have responsibility for the coalition. And you, Madam Acting Deputy President Crossin, would know many steel fabricators in the Darwin area who will be very, very concerned about the fact that this carbon tax will make life very difficult for them. But they are not getting a cent of compensation. It is the big guys that Senator Brown always criticises that are going to be getting the $300 million taxpayer funded leg-up.

The Labor Party and the Greens are continuing their support for the big end of town. Senators do not need me to remind them that, when the flood tax was being imposed on ordinary Australians, the Labor Party and the Greens absolved OneSteel and BlueScope Steel from payment of a tax that all ordinary people had to pay. All of the steel fabricators around Northern Australia and in Queensland had to pay the flood tax. But did these big companies—BHP, Rio, Xstrata, Woolworths or Coles—have to pay the flood tax? Of course not! They are the big end of town, which the Greens and the Labor Party like to support. We know why the Greens have now become the party of the big end of town. It is because they get donations of $1.6 million from the big end of town. We can understand why in the Greens' minds it is a quid pro quo. The big end of town give the Greens big donations—the biggest single donation ever in Australian political history, I understand. And what do they get in return? They get supported by the Greens and the Labor Party.

I am glad to see that Senator McLucas is in the chamber. She sometimes lives up in Cairns and represents that area—so she says—in the Senate. Did I hear her raise her voice for the steel fabricators in the Cairns region? Good heavens Cairns is in difficult times at the moment. There once were some very good manufacturing industries in Cairns. I do not need to remind any North Queenslanders that Cairns used to have a great shipbuilding industry—a very successful shipbuilding company that put in a contract for the air warfare destroyers. And they had been given a wink and a nod that they had succeeded. Wouldn't it have been wonderful for Cairns if that shipbuilding industry, which had been going for so long and had employed so many blue-collar workers and tradesmen, could have continued.

But what happened? The state Labor government withdrew a $20 million guarantee—which the Victorian government gave, just like that, so that the contract would go somewhere down near Julia Gillard's electorate in Victoria. And what did the Labor Party people in Cairns do? Mr Turnour said nothing and, of course, he got thrown out at the last election—and well he should have, for this incident alone. And what did we hear from Senator McLucas? Not a pipsqueak. There was a manufacturing industry in Cairns that has now all but disappeared because the state and federal Labor governments did not have the courage to go ahead and give that contract to the Cairns shipbuilding works. The bureaucrats had given a wink and a nod and had actually come down to Newcastle to sign the contract. But at the last minute the federal Labor government did not have any courage, did not have any support, and obviously was not being supported by the so-called Labor representatives of the Far North Queensland area. We heard nothing from Senator McLucas and nothing from them, and the contract went elsewhere. As I recall, 300 jobs vanished overnight, and Cairns is now in real difficulties.

But there are other steel fabricators in Cairns. Have I heard Senator McLucas arguing their case? Are they going to get something out of this $300 million largesse? Madam Acting Deputy Speaker, you are from Darwin. And I do not think I have heard you too often standing up for the steel fabricators in Darwin. Are they going to get anything out of this $300 million package, or is it only the big end of town—OneSteel and BlueScope—that are going to receive the benefit of the largesse from the Greens party and the Labor Party?

As I say, good luck to them. When Mr Howes clicks his fingers Ms Gillard says, 'How high do you want me to jump?' and they have got a few hundred million dollars—which, I might say, could well be spent within 12 months of the carbon tax coming in. It is really hush money to Mr Howes, I would have thought. But good luck to them.

What I am more concerned about is: where is the special package for the sugar industry? The sugar industry, particularly where I live in the Burdekin, grows the best sugar cane in the world. Why? They are dry but they have got plenty of underground water in the Burdekin delta. But they have to pump the water up, and that costs electricity. With this carbon tax, the electricity costs of the cane farmers in the Burdekin, and right throughout North and Far North Queensland, are going to skyrocket. They are price takers. They cannot pass on their price of production to the world market and say, 'Hey, fellas, my cost of production has gone up because the Labor government back home put on a carbon tax that has skyrocketed the price of electricity.' They cannot say to the world market, 'You've got to pay us a bit more.' They are price takers, they have got to take the market price, but their costs keep going up. I have heard, Senator McLucas, that you come from up that way; you know a few cane farmers. What is the package for the cane farmers? There is nothing I have heard said anywhere. In the debate on the carbon tax Senator Wong could not tell me. I asked her the question and she started talking to me about milling costs. She clearly does not understand that the milling part of the industry is quite different to the growing part of the industry. It is about the growing part of the industry that I want to know: where is the special $300 million package for them? It is okay for the big end of town down at Wollongong. What about Far North Queensland, Senator McLucas? What about North Queensland industry generally? Do we have any champions in the Labor Party for that? We do not, clearly; it is a rhetorical question.

I ask Senator McLucas the same question about the tourism industry. We have seen the passing of this iniquitous tax, the carbon tax, this morning. We heard ramblings from the Greens about how this is going to save the Barrier Reef. We are going to cut five per cent of 1.4 per cent greenhouse gas emissions and somehow that is going to save the Barrier Reef—a reef, I might say, that has been there for millions of years and has been adapting for millions of years. But the Greens, with their perverted view on life, tell us that this new carbon tax that is going to add to the cost of living is somehow going to save the Barrier Reef. We know it will not, but what we do know is that the cost will go up for tourism operators in Cairns in particular and indeed right up and down the Queensland coast, where tourism operators and small business make their livelihoods out of the Barrier Reef. Their cost of fuel is going up. Their cost of power is going up. Their air-conditioning costs will be going up. Their costs across the board will skyrocket.

Do we have a special $300 million tourism transformation plan for the North Queensland tourism industry? Do we have a special $300 million sugar cane transformation plan for the sugar industry? No, because Mr Howes does not look after them. He claims to look after the Illawarra steel industry. Perhaps Mr Howes does not know this—he is too involved running around propping up the Gillard government and making sure that the next leader of the Labor Party is one that he approves—but I should tell him that the AWU used to be the voice of the sugar-growing industry, back in the old days when there were a lot of canecutters and other manual workers. They are still there, but very few of them want anything to do with the AWU these days because they know that all the AWU is interested in is getting people like Senator Ludwig a seat in the Senate through his old man, big Bill Ludwig, who for many years was the supremo of the AWU, and of course that Mr Howes is playing politics down there, telling the Labor Party politicians who they can put in as Prime Minister and who they cannot.

But I digress from my point: where is the compensation for these other industries that are so important to my state of Queensland? Where is the compensation for Central Queensland—the Mackay region, where there are so many small businesses, so many steel fabrication businesses, that make their living out of the Central Queensland coalfields. This coal tax, as the coal industry have told us, as the mining resources council have told us, will mean that over the years there will be a diversion of investment from Queensland and Australia to places that welcome those industries, like many of the countries in Africa. The Greens and the Labor Party seem to think that Australia has this God-given right to be exporters of coal, steel, iron ore, uranium, copper, lead and zinc to the world. Little do they realise that Australia is pretty small fry when it comes to the export of minerals. There are plenty of opportunities for international investors to invest in other parts of the world. Things like this carbon tax and the mining tax will chase the investors away, and the Labor Party and the Greens would, if they were going to be in power for long, rue the day that this happened.

I conclude where I started. This is most unusual for me but thank you, Greens political party, for imposing this carbon tax on the Australian Labor Party. It is a shame that the Australian Labor Party are now so without intestinal fortitude that they are easy marks for the Greens political party, but I have to thank the Greens. They have made the result of the next election a forgone conclusion, and I do give them thanks for that. Better still, for Australia it is great, because we will get rid of this government and not only give decent government but get rid of this toxic tax as the very first action of a new, incoming, Abbott government.

Alan Eggleston (WA, Liberal Party) Share this | Link to this | Hansard source

The Steel Transformation Plan Bill 2011 is one of the bandaids on the bullet wound inflicted by the carbon tax on the people of Australia. It will establish a legislative framework for a transformation plan for the steel industry which will provide an entitlement program of $300 million over four years. The rhetoric in the bill's outline says the legislation will:

… support the Australian steel manufacturing industry to ensure its long-term economic and environmental sustainability in a low carbon economy.

In truth, it is nothing but an attempt to limit the haemorrhaging that the steel industry will suffer at the hands of the carbon tax. It should not be lost on the parliament that the very definition of compensation, according to the Oxford dictionary, is an award:

… to someone in recognition of loss, suffering, or injury.

The steel industry will be subject to loss, suffering and injury from this carbon tax. The carbon tax will certainly have a very adverse effect on our domestic steel industry. If there were no carbon tax there would not be a need for this kind of compensation in the first place.

On 10 October this year the Minister for Climate Change and Energy Efficiency, Mr Greg Combet, admitted the establishment of the Steel Transformation Plan had been driven purely by the carbon tax when he said, 'The negotiation of the Steel Transformation Plan did come out of the discussions we've had with the steel companies for months now over the carbon price issue.' So he is admitting that the carbon price is really going to hit and hurt the Australian steel industry. Mr Combet did say 'companies', suggesting that he was talking about more than one. He was correct. Just two firms qualify for assistance under this particular legislation, so it is pretty limited support.

Only two Australian firms—BlueScope Steel Australia and OneSteel—will qualify for the assistance, due to the narrow definition the government has used for 'eligible corporation'. Under the Steel Transformation Plan, Labor has abandoned the majority of firms in Australia's steel industry, with all of the proposed carbon tax assistance set to go exclusively to the two largest domestic steel manufacturers. Too bad for the smaller companies! Too bad for their employees! Too bad for their owners!

An eligibility criterion for compensation under this bill requires an applicant to have produced at least 500,000 tonnes of crude carbon steel annually since 2009-10. As I said, in Australia only two companies meet that criterion: BlueScope Steel Australia and OneSteel. This means the remaining businesses, which employ about 80 per cent of Australia's steelworkers, will not benefit under this plan.

Every other steel business will not receive a single dollar of compensation. Hundreds of steel fabricators spread right across Australia—the single-operator firm, for example, probably built with the sweat and tears of the owner and his family, through to the two- or three-family companies—will not be compensated. They will get not a dollar, not a cent—nothing. I think that is some kind of reflection on the attitude of the Labor-Green government to smaller companies and their workforces. This is despite the fact that many such firms are currently facing an enormous range of costs and other pressures, which will only be exacerbated by the introduction of the carbon tax. It is estimated that a total of some 91,000 employees across the entire Australian steel industry chain will be left out in the cold. I hope the government, with their Green coalition supporters, feel proud of that!

The government's ludicrous legislative planning does not stop there, however. This entire assistance package for the two big miners could be exhausted within one year and one day of the carbon tax's introduction. While the legislation provides for $300 million of assistance in total over the four-year period from 2012-13 to 2015-16, the money could theoretically all vanish within just a year and a day. This is because, firstly, as much as $164 million can be paid out in advances before the carbon tax is even introduced; and, secondly, as much as $75 million can be paid out each financial year. That is to say, you could have the situation where at least $150 million could be paid in advances and then the balance could potentially be paid out at any time during the first two financial years.

Even if the package does eventually last for around four years, there is another fundamental question which remains—namely, what is the government going to do to compensate BlueScope Steel Australia and OneSteel for the carbon tax once the $300 million runs out? Fortunately, the coalition will come to the government's rescue here. The coalition have vowed to rescind the tax in government, and that is what we will do. When we are in office we will be able to assist these industries.

In the meantime we should not forget that even as BlueScope Steel Australia and OneSteel might be the only companies to receive government assistance, the multibillion dollar firms will still feel the devastating impact of the government's carbon tax on their bottom lines. The day after the government announced this $300 million compensation package for the steel industry, $300 million was stripped from the companies' share values. The reaction from the Australian public and investors around the world did not stop there. The next day another $100 million disappeared from the share value. People both in Australia and abroad were voting with their pockets.

So let's not fool ourselves. When the Labor-Greens government talks about a low-carbon economy or a carbon constrained future, they are talking about three things. Firstly, they are talking about an economy where households and businesses pay a lot more—more for groceries, more for fuel, more for electricity and water. More, more, more for everything else. Secondly, they are talking about a community where there is less use of private cars and increased strain on public transportation services. Thirdly, they are talking about an economy where industries in which electricity is a key input of production, like steel and aluminium—aluminium is, after all, described by some people as solid electricity—will become nearly extinct in Australia because those industries will move to more congenial countries where they do not have to carry the burden of a carbon tax. Beyond the costs to families there will be costs to jobs, businesses and the economy in general. The Labor-Greens carbon tax is going to devastate the Australian economy at every turn—households, businesses and jobs. This great big new tax will be imposed on Australian businesses and consumers when no similar tax is going to be imposed on the populations and businesses of our international competitors. This tax is supposed to morph into an emissions trading scheme in 2015. But, from what we hear, none of this country's major trading partners—China, South Korea, Japan, the United States and India—are going to have emissions trading schemes. That will mean the Australian consumer will bear the enormous cost of this emissions trading scheme.

I was at the CHOGM business forum last week or the week before in Perth and I went to the roundtable with Indian business. I mentioned the fact that I thought this carbon tax would be passed through the Senate in this two-week sitting and I asked the Indian business people whether it was proposed that India should have a carbon tax or an emissions trading scheme. They simply shook their heads in disbelief and said, 'Of course not.' In 2008, I attended a renewable energy forum in Beijing at which, in the last session, I asked the delegates from China, Japan and South Korea whether they would have an emissions trading scheme or a carbon tax. In saying they would not, they added that they saw no reason why they should handicap their economies and add to the cost of doing business in their countries. So when this carbon tax moves on to stage 2, if it does, in 2015, to an emissions trading scheme, it is going to exacerbate and compound the disadvantage felt by Australian business as a consequence of the imposition of these measures today.

BlueScope Steel's Chairman, Graham Kraehe, says Labor's proposed compensation deal for emissions intensive and trade exposed industries is like putting 'a bandaid on a bullet wound'. We do have many trade-exposed emissions-intensive industries, and I think all of us would remember dealing with the problems they faced when the CPRS legislation was before the Senate. That was one of the principal reasons why the Senate voted down that legislation.

I think this is a sad day for Australia. It is a black day for Australia. But, most importantly, this is a day the Labor Party and the Greens will live to rue, because a great burden is being imposed on the Australian people. They are going to increase the cost of consumer goods, they are going to decrease the competitiveness of Australian industries and, most importantly, they are going to cost a lot of people's jobs.

Matt Thistlethwaite (NSW, Australian Labor Party) Share this | Link to this | Hansard source

I of course support the Steel Transformation Plan Bill 2011 because I support the ongoing viability of an Australian domestic steel industry. I also support steelworkers, their families and their communities. I have seen just how important BlueScope Steel, this wonderful steelmaking facility, has been over the generations for the Illawarra, in providing support for the economic, cultural, social and sporting development of that wonderful region of the state of New South Wales.

I also believe that as an economy, as a people, we can make a transition to a clean energy future whilst at the same time maintaining a viable steel industry and, indeed, viable industries of production in manufacturing throughout this country, continuing to produce high-quality steel for sale in both domestic and export markets and investing in new technology and new production methods.

I have watched this debate with interest this afternoon and I have found the contributions of a number of opposition senators in this debate highly amusing—highly amusing because they pinpoint their inconsistency and their downright hypocrisy on this issue and other important policy areas. I found it particularly amusing that Senator Cormann got up in this place and sought to criticise the government for putting this set of bills forward. He claimed that it was a massive, unjustified subsidy to the steel industry in Australia. Well, if you want to talk about massive, unjustified subsidies, you need look no further than the coalition's direct action policy: an $11 billion massive, unjustified subsidy to the biggest polluters in this country, an $11 billion handout on a whim, in the hope that those polluters may reduce their emissions over time. There is no investment at all in incentives for other producers to reduce their emissions.

Then we had the inconsistency from Senator Macdonald in his contribution to the debate, railing against the Labor Party saying that we are supporting—

(Quorum formed) As I was saying, Senator Macdonald's inconsistency on this issue is highly amusing because he came into this chamber and railed against the Labor Party with this bill, attempting to claim that through this Steel Transformation Plan we were supporting the big end of town and ignoring the smaller producers and smaller companies in this country. If you want an example of a party supporting the big end of town and ignoring the welfare of the wider community, look no further than the refusal of those opposite to support the minerals resource rent tax, which is squarely aimed at ensuring that the big miners—'the big end of town', as Senator Macdonald calls it—in this country pay their fair share and that the revenue that is generated from that proposal is redirected to supporting superannuation entitlements for workers in this country, tax breaks for small businesses, and infrastructure in rural and regional communities.

The Australian steel industry has a very long and proud tradition of growth and innovation. It is an industry that is vital to our economy. It has been said that the use of steel increases proportionately to the development of the standard of living of a country, and we need to look no further than our major trading partner, China, to see evidence of that fact. In 2006-07, the industry employed 91,000 workers and had revenues of $29 billion. But, despite these impressive figures, the Australian steel industry is facing uncertain times. High exchange rates and lower growth rates in the Australian construction industry are taking their toll. And this economic susceptibility was highlighted in August this year when OneSteel announced a loss by its steelmaking division of $185 million for the 2011-12 financial year before interest and tax. At the same time, the company unfortunately also indicated that they would shed 400 jobs across the country, half of which would come from its steelmaking operations. Then unfortunately, just days later, came the announcement of BlueScope Steel that, following a $1 billion loss, it was exiting the steel market for export to focus on the domestic steel market.

Australian steel is also said to be in an area of the Australian economy which is more exposed and less able to pass on the impact of the carbon price than others. That is why the government has taken note of these devastating consequences and areas of weakness and, more importantly, has responded in the form of the Steel Transformation Plan Bill to ensure the future of this great Australian industry.

The Steel Transformation Plan will help the steel manufacturers to restructure their businesses in order to assist the industry to be viable and sustainable in Australia. The object of the bill is to encourage innovation, investment and competitiveness in the Australian steel manufacturing industry, to assist the industry to transform itself, to transition into a clean energy future—into an efficient and economically sustainable industry in a low-carbon economy. The plan will achieve this in a way that improves environmental outcomes and promotes the development of workforce skills. The plan provides assistance to participants for investment in eligible research and development, plant and equipment, and productivity.

The bill contains two elements. The first element provides support through a competitiveness assistance advance of $164 million for 2011-12. The second provides for a $300 million entitlement self-assessment scheme over the five years from 2012-13, and entitlements under this element will be reduced by the value of any competitive assistance advance payments.

There has been some debate and, indeed, some confusion amongst those opposite regarding how many years the Steel Transformation Plan will operate—that is, in which financial year it will conclude. The plan will operate over six payment years from 2011-12 to 2016-17. There is no confusion about the term of assistance under the $300 million plan. As was announced on 10 July 2011, payments under the self-assessment component of the Steel Transformation Plan will be made six months in arrears. Therefore, the eligible activity period will be a four-year period from 2012-13 to 2015-16, whereas the payments period is for a five-year period from 2012-13 to 2016-17. As announced on 22 August 2011, the competitive assistance advances will also be available in 2011-12. So, accordingly, both elements together under the transformation plan will be made available over six payment periods of six years from 2011-12 to 2016-17. This Steel Transformation Plan Bill, along with other elements of the clean energy future legislative package, demonstrates the government's commitment to securing the future of this strategically vital sector within the Australian economy whilst transitioning to a low-carbon economy.

It is also encouraging to hear words of support from the industry itself, thankful that the government have responded to help them move forward into a more sustainable, productive and prosperous future. BlueScope Steel has praised the government for recognising the company's longstanding call for a sectoral approach to the carbon tax. The company's managing director and chief executive officer, Paul O'Malley, said:

The Government has listened to our arguments and our deep concerns about the carbon tax. In the STP—

the Steel Transformation Plan—

it has produced a package that, if implemented as explained to us, deals with the steel sector's carbon tax issues in a significant way for the first four years.

This is a ringing endorsement of the government and its clean energy future package and the associated support mechanisms for industry, in particular the steel industry.

OneSteel have also indicated that they support this plan, calling it both appropriate and sensible. A company spokesperson for OneSteel said:

Through this sectoral approach, and in particular the announcement of the STP, our concerns about the adverse impacts of the proposed carbon tax on our competitive position have been recognised and substantially addressed ...

The Australian Workers Union, the representative of steelworkers in this very important industry, has recognised the plan's design to protect local jobs. The AWU is quoted as saying:

We’re pleased to see that the Government has worked with industry and the AWU to design a number of specialist programs to secure the jobs of our members and support our industries as the global economy shifts towards new energy sources. These multi-billion dollar programs have been welcomed by many of our major employers. In particular, the steel sector has secured a massive win with the $300 million Steel Transformation Plan.

The plan is of course designed to protect jobs in one of Australia's most fundamental industries. It is proof of the government's responsible approach to ensure a smooth transition to a low-carbon economy.

There have also been claims in this debate that other stakeholders in the steel industry and the manufacturing industry are not being supported. This is not true. The government are supporting small and medium sized enterprises through the Clean Technology Investment Program, which the coalition unfortunately oppose. The new, $200 million Clean Technology Food and Foundries Investment Program will provide grants of up to $50 million over six years to the metal-forging and foundry industries. These grants will assist the industries investing in energy efficient equipment and low-pollution technology processes and products. Again, this was opposed by those opposite. The government are supporting small to medium sized enterprises through Enterprise Connect, from which the coalition are proposing to cut $100 million. The government are also supporting and recognising small to medium sized enterprises through our push for an Australian industry involvement in major projects and through the activities of the Steel Supplier Advocate.

In all respects, this bill is fundamental to Labor's plan to ensure businesses have support to transition from an industrial age based on technology and production methods associated with harmful carbon pollution to a clean energy future, and to do it in a manner that protects investments and jobs, and ensures incentives to invest in new innovative practices and in new innovative technologies. Importantly, it will provide the foundation for economic growth into the future and support for this vitally important industry. The last thing that this government want to do is threaten the livelihoods of hardworking Australians in an industry where they earn their living and in an industry that has a great tradition in many regions throughout the country. It is through packages such as the Steel Transformation Plan that we are putting our money where our mouth is and supporting industry. We are looking forward to a brighter, more sustainable future for this great Australian industry.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

As the chamber knows, I did not support the government's legislation which passed through the parliament today in relation to the carbon tax and other measures. But, given that it has passed, I indicate I will be supporting this Steel Transformation Plan Bill 2011 because I believe it is important that assurance is given to the steel industry in light of the carbon tax that will apply from next year. The steel industry is facing a number of pressures: low demand, increased costs and a very high Australian dollar. The introduction of the government's carbon tax will add to the industry's pressures, and this legislation will assist the steel industry, through compensation of $300 million in entitlements over five years from 2012-13 as well as $164 million in advances in this financial year.

I want to highlight, again, that an intensity based scheme such as the one proposed by Frontier Economics would not require this compensation package because it would not unnecessarily raise tax revenue or prices for consumers in the same way the carbon tax or the proposed emissions trading scheme that will follow it will. I think it is worth reflecting on the comments of Frontier Economics and the evidence they gave to various Senate committees in relation to this. It is also worth noting that in a paper they prepared in May this year, Magic pudding is vanilla economics, they were very critical of what has just been passed.

This is not an efficient way to deal with pricing carbon; this is not an efficient way of dealing with the dislocation amongst industries; this is not a good way to deal with the transitional effects of such legislation. There are better ways to transition to reduced emissions. This will lead to distorting taxes. An emissions trading scheme is only more efficient if governments use revenue to offset other distorting taxes, but this is not a feature of the legislation that was passed just a few hours ago. That causes me considerable concern as to the impact that it will have on our economy. The steel industry is subject to great competitive pressures. We are talking about an emissions-intensive trade-exposed industry. I have very real concerns about the additional pressures we are putting on our steel industry.

Under the Frontier Economics scheme, which would result in less revenue churn, not to mention greater environmental benefit, the steel industry would not face the additional pressures the carbon price will impose. That is because you would be able to deal with electricity prices in a way that will transition the effects, that will smooth out the costs and shocks to the economy that will occur. But, as a result of the government's carbon price legislation being passed and the increased costs to the steel industry that will come with it, I will support this bill to give assistance to the steel industry. I should also say that I support the provisions in this bill that the Productivity Commission undertake two reviews of the steel industry, one being the impact of the carbon price on the competitiveness of the steel industry.

Australia's steel industry and associated manufacturing activities employ some 100,000 Australians and earn revenues of some $29 billion annually. We export around two million tonnes of steel and import between two and three million tonnes a year. It is a $7 billion industry for Australia and one we need to support. It is an industry that faces pressure from dumping of below-cost steel imports. A bill that I introduced some time ago attempted to deal with that problem. The government has picked up some of those issues, and I welcome that, but more needs to be done because not only does the steel industry have to deal with the high Australian dollar; it has to deal with goods being dumped from overseas at below cost and it now has to deal with a carbon tax. I worry that that will be a tipping point for some of our steel mills.

I believe that this bill needs to be supported but, having said that, I want to put something on notice for the government when they respond to the second reading debate contributions. In August this year, it was revealed that BlueScope senior executives, on the day that a thousand workers were sacked and when the company was taking $100 million in assistance from the government, paid themselves more than $3 million in bonuses. The details of the bonuses were tucked away in the company's financial reports for the 12 months ending 30 June 2011. According to the company's documents, bonuses across management totalled $3.052 million, with CEO Paul O'Malley pocketing $721,000 on top of his base salary of almost $2 million. The point needs to be made: this company was laying off 1,000 workers and it had its hands out for taxpayer support to the tune of $100 million, yet it still had the gall to pay its executives these obscene bonuses. The company's operating cash flow was only $21 million last year, so 15 per cent of that has gone in executive bonuses. I do not think that is the right thing to do.

The federal government should insist the executives give back their bonuses, and they ought to make it a condition of the compensation package. I ask the government on the record, on notice: given that a thousand workers have been sacked, was anything raised between the government and this company about these bonuses in the context of this assistance package? BlueScope operates in my home state of South Australia at Wingfield and Gillman, and I think it is very important that that question be answered. Paul O'Malley says, 'We are experiencing an unprecedented combination of economic challenges,' but when it comes to bonuses for senior executives, including himself, sadly, nothing seems to change. It is not good enough, and my questions to the government are: have you discussed the issue of their bonuses in the context of this assistance package and will you consider tying the level of their bonuses to the assistance package? I do not think it is good enough, given what those 1,000 workers and their families have faced. I do not think we should be mugs about this assistance. I want to have a strong, viable steel industry in this country. This package is part of it. This package acknowledges the additional pressures of a carbon tax. We need to tackle issues like the dumping of low-cost goods by competitors in countries with artificially devalued currencies who compete on an non-level playing field. These are matters that need to be addressed as well.

I support this package because I believe not to do so would not be responsible, given the passage of the carbon tax package of bills earlier today, but I do look forward to the government addressing these issues with respect to the obscene bonuses being given to BlueScope executives and the $100 million handout they are expected to get from the Commonwealth government, from the taxpayers of Australia.

Fiona Nash (NSW, National Party, Shadow Parliamentary Secretary for Regional Education) Share this | Link to this | Hansard source

So many of my colleagues on this side of the chamber have called today a sad day and a dark day, and there is absolutely no two ways about that: it is a sad day and it is a dark day. Here we are yet again dealing with legislation relating to a carbon tax that this government simply should not be bringing in. The government should not be giving it to the Australian people. We know that because, as I have said in this place before—and I had a discussion with somebody today about the number of times that people on this side of the chamber have said this—Julia Gillard, the Prime Minister, said, 'There will be no carbon tax under a government I lead.' It is true. That is why we keep saying it, because it is absolutely true: this Labor government promised the Australian people no carbon tax. And yet here we are now dealing with yet another piece of legislation relating to the carbon tax. It is a very sad and dark day indeed.

The government had an opportunity to wait for the commencement date for the carbon tax bills until after the next election. They could have simply done that. Even if we take it at face value—some people might—that the Prime Minister did not mean to lie to the Australian people when she said, 'There will be no carbon tax under a government I lead,' even if we take it that somehow that was not a lie, it does not take away the fact that the Prime Minister should be taking the carbon tax to the Australian people before it commences. It is as simple as that. This piece of legislation, the Steel Transformation Plan Bill 2011, is part of the whole carbon tax process that is being foisted on the Australian people, and they do not want it. I can tell you, Madam Acting Deputy President Adams, we on this side of the chamber know they do not want it. The reason they do not want it is that they understand exactly what is happening here. They know exactly what is happening. What is happening is that this government is bringing in a piece of legislation that is actually not going to achieve what the government is trying to achieve.

In the legislation that we have been dealing with up until now—the clean energy legislation—object (b) talks about supporting the development of a cleaner environment and the government's intent to reduce greenhouse gas emissions. The clean energy legislation does not do that. This piece of legislation, the Steel Transformation Plan Bill, does not do that. Nothing in any of the legislation that we have been dealing with today changes the climate. Nothing in any of the legislation that we have been dealing with up until this point in time reduces greenhouse gas emissions. Isn't it interesting, colleagues? Emissions are actually going to increase by 2020, from 578 million tonnes to 621 million tonnes.

It is also so interesting that no other country in the world is doing or is moving toward doing a carbon tax like the one we are going to implement—not one. That is not me and my colleagues on this side of the chamber saying that; that is the Productivity Commission saying that. So relate that back to object (b), which is to support that development. Support what? Nobody else is doing what we are about to do with this carbon tax, which is irrevocably going to change the economy. It is going to create structural change in how this country operates, in how the economy operates. The Steel Transformation Plan Bill is part of that, which is why we on this side of the chamber are not supporting it.

Sean Edwards (SA, Liberal Party) Share this | Link to this | Hansard source

No way.

Fiona Nash (NSW, National Party, Shadow Parliamentary Secretary for Regional Education) Share this | Link to this | Hansard source

I will take that interjection, Senator Edwards. No way will we support this or any part of this, because we have promised the Australian people—and, unlike those on the other side of the chamber, we are actually going to stick to the promises that we make before the election—that in government we will rescind the carbon tax. We will get rid of it. We feel so strongly about this on behalf of the Australian people—we know they do not want the carbon tax—that we will get rid of it.

We know the carbon tax bills have gone through today, and we assume this bill is going to go through at some point in time as well. That has not weakened our resolve one little bit, because the Australian people deserve to have some champions in this chamber fighting on their behalf for the outcome that they want. They know that the carbon tax and its associated legislation, like the Steel Transformation Plan Bill we are debating tonight, are not going to change the climate one little bit. The government is off on this frolic of having to lead the world, be in front of the game and make sure we do not get left behind, with a piece of legislation—or pieces of legislation, thousands of pages!—that is not actually going to do what the government is intending it to do: to reduce greenhouse gas emissions. I do not know, but I would say that is stupid. That is just stupidity from the government, when we know the impact it is going to have.

We would not even need to be debating the Steel Transformation Plan Bill if it were not for the carbon tax, because it is a very simple fact that you would not need compensation if there were not a carbon tax in place. None of this should be happening. When you see the government put in place this carbon tax and then this attempt at compensation for the steel industry—as my good colleague Senator Fierravanti-Wells said earlier, those who are unkind might say that it is a pork barrel—it is extraordinary. Why are we doing any of this? The Australian people get it. They keep asking: 'Why are we doing any of this in the first place, because it is not going to change the climate one little bit?'

Sean Edwards (SA, Liberal Party) Share this | Link to this | Hansard source

Ninety per cent of them didn't vote for it.

Fiona Nash (NSW, National Party, Shadow Parliamentary Secretary for Regional Education) Share this | Link to this | Hansard source

What percentage was that?

Sean Edwards (SA, Liberal Party) Share this | Link to this | Hansard source

Ninety per cent.

Fiona Nash (NSW, National Party, Shadow Parliamentary Secretary for Regional Education) Share this | Link to this | Hansard source

Ninety per cent of the people did not vote for it, because those on the other side went to the last election saying that there would not be a carbon tax, and the people trusted them. The people of Australia trusted the government and trusted that it was telling the truth. That is why it is such a sad and dark day today, when we see the Australian people being let down so badly by Julia Gillard and this Labor government—cobbled together with the Greens and the Independents—who are giving them the carbon tax that they believed would not be given to them. I turn back to the Steel Transformation Plan Bill. A little earlier, Senator Thistlethwaite was talking on the other side of the chamber about how the government had to support the industry and how this was a terrific compensation package for the whole industry. Colleagues, do you know how many firms this is actually going to assist? This is out of the entire, huge industry, with something along the lines of 19,000 workers.

Sean Edwards (SA, Liberal Party) Share this | Link to this | Hansard source

Two.

Fiona Nash (NSW, National Party, Shadow Parliamentary Secretary for Regional Education) Share this | Link to this | Hansard source

Thank you, Senator Edwards. Two companies are going to be assisted. Because of the definition of 'eligible corporation' in proposed section 4, only two companies are going to be eligible. What a complete dog's breakfast—yet another one from this government. When we look at their stuff-ups in the past, we see they have no ability to implement any kind of policy properly—the school halls debacle, the BER, pink batts, GroceryWatch, Fuelwatch—

Sean Edwards (SA, Liberal Party) Share this | Link to this | Hansard source

Cash for clunkers.

Fiona Nash (NSW, National Party, Shadow Parliamentary Secretary for Regional Education) Share this | Link to this | Hansard source

Yes; thank you, Senator Edwards. And there has been a total inability to manage our borders properly. Why on earth would we think that they could get something like a compensation package for steel right? Obviously, they have not, with only two companies to be assisted.

Colleagues, you can only be gobsmacked by the way in which this is going to operate. The government talks about it being a four-year plan. Given the way it is structured, it could be, I think, only about a year and one day and all the money could have disappeared altogether. There is even confusion over how long the plan is supposed to be. Is it four years or five years? I think Minister Greg Combet is talking about it being over five years but we have the official department website saying it is over six years. This government cannot manage a thing and cannot deliver any policy properly to the Australian people—and, to see that, we only have to look at where the government is not compensating. We have this picking and choosing as to whom they are going to compensate and the fact that they are giving upfront compensation in bulk, one-off payments to welfare recipients. So how on earth can they ensure that that funding is going to go, over the 18-month period of time, to those people that need it, when it is needed, when the carbon tax has imposed those electricity cost increases? The government simply cannot give that guarantee. Now we see this compensation package that is going to help only two firms—two firms, I repeat—out of the myriad firms out there. Every other steel business is not going to receive so much as one single cent of assistance under this legislation.

It is one thing to look at the compensation that the government is going to provide to the steel industry; but what we should really be looking at are the industries that the government have turned their back on and have not even considered compensating in a proper manner: those in agriculture, our farmers. We saw over the last couple of days the complete inability of Minister Penny Wong to answer in any detail whatsoever the questions that we on this side of the chamber were asking, rightly and properly, about what the impact was going to be on the agricultural industries, what the impact was going to be for irrigators, what the impact was going to be for the dairy sector. The government were simply incapable of answering the questions.

Farmers are the heart and soul of this country. They generate real wealth for this country. They work from dawn to dusk and beyond to be the backbone of this nation. And what have this government done for them? What recognition have this government given to the situation that they have now placed our farming sector in because of the incredible financial impacts of this carbon tax? Nothing. They have not considered the impacts in any real way, in any shape or form. They have not even done any modelling to actually see what the impacts are going to be, because they simply do not care. Here we have the Steel Transformation Plan Bill in front of us. What about farmers? What about those men and women—and their children—who are the backbone of this nation? What about them? The government simply do not care, and that is what makes it such a sad and dark day for the Australian people. And I cannot understand for a moment why on earth this government keeps hanging our farmers out to dry.

While I am on farmers, what was extraordinary today was that at a Greens press conference Senator Bob Brown said one of the reasons the Greens' stocks have been growing rapidly in the bush is 'our strong action to curb climate change'. If we had ever wondered if the Greens did believe in fairies at the bottom of the garden, that was the absolute proof today. I do not know who Senator Brown has been talking to out there, but he has certainly not been talking to the majority of farmers because I can tell him that, absolutely, right now, farmers across this country do not want a carbon tax. But, no, Senator Brown cannot possibly let reality get in the way of a good story—that would be wrong for him, wouldn't it! I can tell him right now that those words that he uttered this morning are wrong. Australian farmers do not want a carbon tax. For the fairies at the bottom of the garden, the Greens, along with the Labor government and the Independents, to cobble this together to give the Australian people a carbon tax is simply wrong.

I go back to my comments earlier that it is not going to change the climate one little bit. We hear from the other side of the chamber all these words of spin about a clean energy future and talk about all these new jobs that are going to be created. But we have not heard from the other side of the chamber about any one specific job that is going to be created. I have not heard of one. We have had this throwaway bandaid line that there are going to be all these jobs created. Well, they should tell all these people working in the steel industry and in the agricultural industry and all the other people across this nation who are going to lose their jobs because of the carbon tax—and that is not scaremongering; that is a fact—why the carbon tax is a good thing for them and they should tell them how fantastic it is that all these new jobs are being created. But I can tell you this, Madam Acting Deputy President Adams: those people want the jobs that they have got. They do not want some new job in some green industry doing basket weaving or something somewhere else; they actually want to hang on to the jobs that they have got. But this government is threatening those jobs, and the Australian people know that. The Steel Transformation Plan Bill is part of the carbon tax that this government is giving to this country, and it is simply wrong that we have a day like today, such a sad and dark day, for the Australian people, so we are not supporting this legislation. The coalition will absolutely get rid of this carbon tax. It is our pledge to the Australian people that we will do that.

Proceedings suspended from 18 : 30 to 19 : 30

Barnaby Joyce (Queensland, National Party, Leader of The Nationals in the Senate) Share this | Link to this | Hansard source

The worst thing that the coalition could do—the worst thing that the National Party could do and the worst thing that the Liberal Party could do—is support this package, because that would indicate that we support the absolute load of rubbish that went through the parliament today.

You will be happy to know that tonight I have spent most of the time speaking to the good people of Western Sydney, generally on talkback radio, and they are not happy. I thought there was some emotion here, but it is nothing to the emotion that is pouring down the phone lines, and you are so, so foolish for what you have done. I will put it this way: when are you most affronted—before you have been ripped off or after you have been ripped off? Now we are talking to people post being ripped off, and the post-ripped-off people are ready to go you as hard as they can. They see you as being completely usurped by the Greens. They see you as basically in a policy cohabitation with a party which will bring about the demise of our nation, and they hold you totally and utterly responsible for it. These people are not happy.

These people were your heart and soul. These were the people who supported you. There is never so much venom as when a person from your family finds out they have been deserted by their own parents. This is the emotion that these people have for you. I do not know how you have done this. How foolish you have been to get yourselves into this position. All of that backslapping and kissing and hugging has gone over like a bomb. It has gone over like an absolute bomb. It is like you are ambivalent about the people of the working-class suburbs, where everyone now believes that they are a collection mechanism for the Australian Taxation Office by reason of their power point, by reason of this new tax.

For what? Why is it evil to iron clothes? Why is it evil to cook dinner? Why is it evil to try and keep yourself warm in winter and cool in summer? Why have you done this to them? Why did you do it to them? But you do not care. It is all because the beautiful people have taken over. You are too wise for them now. You have gone beyond them. You have evolved. Well, you are going to evolve all the way to the ballot box and then you are going to be absolutely and utterly annihilated. I just cannot work it out. To be honest, politically you could have had us on toast, but you did this to yourselves. You were so, so foolish—so naive.

Anyway, I will start on the Steel Transformation Plan Bill. Here is a quote that I am absolutely fascinated by. This is from a very wise person. This is what this wise person said:

There is one point that is very important to understand. A nation without a steel industry is a nation without a manufacturing industry. It is also a nation without a defence industry.

This person is clued up. They went on:

Without the steel industry of this country we lose thousands of jobs—

this is a very wise person—

and we lose export opportunity.

This person went on to say:

It defies logic that a nation like ours, with natural resources in iron ore and coal, with leading infrastructure, leading technology and a massive improvement in labour productivity, cannot see itself developing an expanded steel making industry.

I will give you a hint who said it. He then finished by saying, 'It would never have happened under Labor.' So who is this wise sage? I am interested in this person. This is a noble person. I want to meet him. He wants to protect my manufacturing industry—so do I. He wants to protect the defence of my nation—so do I. I want to do that. He says that if we lose the steel industry we lose thousands of jobs. I agree with this person. This person is a must. I must meet this person. Who is this person? It is Simon Crean, on 29 May 1997, in a House of Representatives matter of public importance debate on the steel industry.

So what did Simon Crean do the other day? He voted for a carbon tax. See, the Greens are voting, but they think coal is evil. You are cohabitating with these people. Coal is evil. You must close down all the coal industries, you doormats of the Left. You must close down the whole coal industry, because—

Carol Brown (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

No, Barnaby, you're the doormats.

Barnaby Joyce (Queensland, National Party, Leader of The Nationals in the Senate) Share this | Link to this | Hansard source

No, because I am voting against this. It is you, who are supposed to be looking after the working-class people, who are the doormats. You are the doormats of the Greens, for goodness sake. Why are you doing this to the Australian people? It is very interesting that Simon Crean said that. What could we offer? What are the two alternatives? We can offer a carbon tax. There is—what?—$300 million over the forward estimates, and that is it for the steel industry. Goodnight, Irene; it is all over. We do not need Wollongong anymore. We do not need Whyalla anymore. Goodnight, it is all over. We do not need a steel industry anymore. If we listen to Simon Crean, that means it affects the defence foundation. It means it affects thousands of jobs.

What is the best way to keep a steel industry open in this nation? I agree with it. It is: do not go forward with a carbon tax. Do not make the price inputs of that industry beyond the reach of that industry to stay viable. Why did you do this to them? You are supposed to be their allies. You were supposed to be standing behind the blue-collar worker. But you have lost it. You are now part of the manic monkey cafe of inner suburban Nirvanaville. You are having the beautiful conversations in the middle of the night. You are philosophising. It is all wonderful stuff. But you are just flushing your own people down the toilet. But they are onto you tonight. I have been absolutely overwhelmed by the common sense of the Australian people, who on talkback tonight have got your measure. I have to say they got your measure quicker than most people around here got it. They have you lined up. They are upset and they are angry, because they want their nation to be a better place. They want their nation to be the nation that produces cheap power. That is one of the things they want—cheap power. They want their nation to be able to produce food that comes from Australian farms. They want all these things that just make so much sense: affordable power, food from Australian farms, a Defence Force they are proud of and a manufacturing industry that stands behind our nation and determines who we are.

These are good people; they are making so much sense on radio tonight. They heard that what happened is that their party—they still refer to you as 'their party'—has left them. Their party no longer believes in them. Their party now believes in the Greens, the highest socioeconomic group in this parliament. That is it. They are higher than the Libs; they are way higher than the Nats—we are the poorest. It goes: the Greens, the Libs, Labor and then us. We represent the poorest. So you have decided to, in a political way, shack up with the Greens, and you are going to pay such a massive price.

I look across the chamber. This is the party of Curtin and of Chifley. These people were giants. I might even say it is the party of Hawke. As much as I wanted to get stuck into him, for all his foibles, he was something. He had that je ne sais quoi. There was something about him, and he had that connection with the Australian people. He had a sense of common sense—sort of a pull to appeal through all the rubbish. But, no, you have deserted that. You are now the party of Dr Bob Brown, with some sort of Romulus Augustus type figure in Julia Gillard—the final emperor. The power is usurped. The Vandals are in town. They are not interested in running the country; they are interested in the archaic spoils that are left in the final Rome. This is what you have done to your own people.

Why would we be part of a process that would condone, and somehow imply our agreement with, your total and utter insanity on this issue? The only message we are going to send to the working-class people—the good people; the working families of Blacktown, Seven Hills, St Marys, Ipswich, Rockhampton, Townsville and Geelong—is that we are going to make sure that, in this crazy equation between cheap power and cheap wages, we are actually the backers of cheap power. We believe that cheap power and dear wages are a good outcome for our nation, Australia. Your belief is that cheap power is evil. Therefore, you believe in cheap wages. 'If you don't want cheap wages, no jobs.' That is what you are offering them: no jobs.

You think that you are somehow beguiling them with the cunning of the serpent. You are beguiling them: 'Oh, we're going to have green jobs.' I tell you: there is another trigger for absolute apoplectic meltdown. They just cannot believe that you even say it. 'Green jobs? What are these jobs?' What do we say to the fitter and turner? 'Mate, we're going to make you a green job.' He says, 'Mate, I want my job.' Is that what you are going to say to the sparky? 'Mate, we're going to give you a green job.' He says, 'Just leave me alone; I just want my job.' What do we say to the boilermaker? My old man started as a boilermaker in the railway workshops. What are you going to say to them? 'Mate, we're going to get you a green job.' He says, 'Get out of my life and leave me. I believe in my trade. I believe in what I can do with my hands. I believe in the dignity of going to work, working during the day, coming home at night feeling tired and making this nation a better place. I believe in that.' This is what these people believe in. They are patriots. They stand behind their nation with the work of their hands and the work of their minds.

But you do not believe in it. You believe they should have green jobs. 'We'll just send them back to university. They can all do arts degrees and wander back, and they can pontificate about duck ponds and windmills. They can open up wind chime factories at Nimbin or do basket weaving. We'll all sit squat-legged on the floor and contemplate our omphaloses—contemplate our navels—and think about basket weaving with the Labor Party'—the party that used to be the party of Curtin, Chifley and Fisher. It used to be a party that actually meant something. What happened to you? As a political party, did you all fall over and hit your head?

Anyway, listen to the people tonight. Turn on the radio. Have a listen to them. Have a listen to your future talking to you—coming to you via your radio. They are not happy. I thought we were unhappy; they are really, really unhappy, because they have been smitten by their own family. They have been deserted by their own kind. They have been led down this path where they honestly thought that somehow, at the end of the day, you would not be so naive, so foolish and so cruel as to let them off.

What does this actually do? It is a question that Penny Wong says I have asked her 600 times, yet 600 times I have never got an answer. Never mind St Peter and the cock crowing thrice; we have given this lady 600 goes and still cannot get an answer. The question is: how much does this change the temperature of the globe by? Of course it does not—not at all. Then we had Mr Dreyfus on radio saying, 'Oh, India's got a scheme.' I was fascinated, so I looked India's scheme up. India's price per tonne of carbon is a dollar, and they cannot even monitor it. The price in Europe, stated to be the most corrupted market—not just carbon market but market full stop—in the world, is between $8 and $12 a tonne. What is the price in Australia? It is at $23. And where is it going from there? It is not going down. There is only one direction for it: up.

Where do these wondrous sages who now occupy the treasury bench want to take us? We do not have to live with Doctor Who; we can do it right here. They are taking us back to 1910. They are taking us back to 80 per cent less carbon emissions; that is what we had in 1910. We would all have arrived here with a couple of ponies and a gig—we would have come up here with a Trigger and a Prancer, and there would be nothing to see around here.

I am amazed at the faux nobility of the other side. Last night when they were talking they were bleeding tears of blood all over the floor about the environment and how bad it is. Whilst they were doing that, I had no other choice but to look at the ceiling. I started counting lights. I ran out of a reason to count them when I got past 220. This is the complete hypocrisy that the people out there called voters see. The temperature is always the same in here. It is never hot and never cold. It is perfect. Who pays for that, I wonder. Who pays for it to be that miracle 26 degrees? The taxpayer does. Who pays for the 220 lights? The taxpayer does. Who is going to pay for the carbon tax? The taxpayer will. What is the tax going to do? Nothing. The government complain about us saying no. Well, the ultimate 'no' is this. What will this climate change policy do for the climate? Nothing. Absolutely nothing. Diddly squat.

In a couple of days time we are going to have Barack Obama, the President of the United States, here. God bless his soul, because without the United States we would not be here. Where is their climate change model? What are they doing? Nothing. What about the Chinese? Nothing. What about anywhere else? Nothing. Who are the noble saviours who are leading this? It is Julia Gillard. I imagine at night—

Doug Cameron (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Senator Joyce, you should refer to the Prime Minister by her proper title.

Barnaby Joyce (Queensland, National Party, Leader of The Nationals in the Senate) Share this | Link to this | Hansard source

I accept your opprobrium. I mean the Prime Minister of Australia. I have absolute and utter respect for that office. That was the office that was held by Curtin, who defended our nation against imminent demise. That was the office of Chifley. That was the office that was held by some of our greatest people. Without them, we would not be here today. That is why it is an absolute disgrace that the dignity of that office and the legacy of Curtin, Chifley, Fisher, Deakin, 'Black Jack' McEwen, Hawke, Howard and Menzies—like them or loathe them, everybody respected them because they represented the will of the Australian people—are being sullied and dragged through the mud. The government are so ambivalent about the dignity of that office that they said, straight down the barrel of the camera on the banks of the Brisbane River, 'There will be no carbon tax under the government I lead.' What an utter fabrication. What an utterly misleading statement. I will tell you what there will be. There will be no government under the carbon tax you lead because it is a fabrication.

I know I am getting to you. You know deep down, like the errant schoolchild who has come home after a big night out with their friends, that now mummy and daddy voter are waiting for you and they are not happy campers. Tonight you are spinning them this yarn and popping the bubbly. And mummy and daddy voter are not happy with you. They are tearing you to pieces tonight on talkback radio. They are tearing you to pieces through the western suburbs. They are tearing you to pieces across this nation because they could not believe you would do this to them.

I believe in Simon Crean. I do. I believe in Simon Crean!

Doug Cameron (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Senator Joyce, you must use the member's proper title.

Barnaby Joyce (Queensland, National Party, Leader of The Nationals in the Senate) Share this | Link to this | Hansard source

Who is he the member for? Does anyone know?

Marise Payne (NSW, Liberal Party, Shadow Minister for COAG) Share this | Link to this | Hansard source

Minister Crean.

Barnaby Joyce (Queensland, National Party, Leader of The Nationals in the Senate) Share this | Link to this | Hansard source

Minister Crean—there we go! Nobody knows where he comes from. It does not really matter. Who cares? He is a bloke from down south. I believe in Minister Crean. But I believe what he said on 29 May 1997 when he was a person based firmly in the Labor Party with its core belief structure, the oldest party in Australia. That party has since left. Now I think the only party that represents their views is sitting right beside me—the DLP. That is it. That is the true soul of the Labor Party now. But I believed this person when he said that he believed in the steel industry because it supported the manufacturing industry of this nation, the defence of our nation and, in his own words, thousands of jobs. I believed in Minister Crean totally in 1997. Minister Crean in 2011 is a completely and utterly different animal. But he is probably the best animal of all the animals on the other side.

Sean Edwards (SA, Liberal Party) Share this | Link to this | Hansard source

I rise to join with my colleague Senator Barnaby Joyce to speak against the adoption of the Steel Transformation Plan Bill. Of all the unnecessary pieces of legislation that have ever been introduced into the Senate, the Steel Transformation Plan Bill is one of the worst. Why? It is because of what begets it. If the government had not misled the Australian people this legislative proposal would not have been before the chamber. The voters of Australia should have had their chance to give their opinion on whether they should pay this tax to fund, arguably, one of the grubbiest deals that we have seen in the Australian parliament—the one between the Prime Minister and the Greens so that she could hold office.

Now that Labor and the Greens have birthed this insidious tax, we are now talking about compensation. Without this tax there would have been no need for the Steel Transformation Plan Bill. Because of the impact of the tax on a vital Australian industry, the government now plans to compensate the steel industry with a $300 million package. We are told that the bill establishes a framework for the payment of financial assistance to steel corporations under the two payment schemes established by the bill—the Competitive Assistance Advances Scheme and the Steel Transformation Plan. Now, doesn't that sound and look like previous schemes advanced by the government, one of them under the direct control of the then Deputy Prime Minister before she and some of her cronies put 'the steel' into the back of the then Prime Minister Rudd? It was a knife job then, but what Labor and the Greens want to do now is put a steamroller over everybody else who has to pay. This is shades of pink batts and the excesses of the Building the Education Revolution and the Gillard Labor government memorial halls at schools right across the nation. And what were they most noted for? Rorting, mismanagement and waste on a scale unprecedented in Australia.

The only reason we are debating this bill is because the Prime Minister went back on her word and introduced a carbon tax. This bill is an admission by the government that the carbon tax will make Australian industry, particularly the steel industry, more uncompetitive. The outline of the Steel Transformation Plan Bill states that the object of the bill is to encourage investment, innovation and competitiveness in the Australian steel manufacturing industry as it transforms into an efficient and economically sustainable industry in a low-carbon economy.

Let us talk about what the government has done to encourage investment, innovation and competitiveness in the steel industry. Taxes do not encourage investment, innovation or competitiveness. In fact, they do the opposite. So lumping one of the world's highest carbon taxes on the Australian steel industry is certainly not going to encourage investment, innovation, or competitiveness. How will increasing the cost pressure and burden on steel manufacturers in Australia help the industry to be more competitive? It will not. In fact, it will do the opposite. It will just be another pressure on an industry which is already facing a high Australian dollar and high input costs. This is not an industry that needs a new tax, and it certainly would not need a government handout if the government was not unnecessarily increasing its costs. The object of the bill is to transform the industry into an efficient and economically sustainable industry. But if steel manufacturers have to move offshore in order to remain viable there will not be an industry to transform.

The carbon tax is just another pressure the government is burdening industry with, another pressure manufacturers in other countries do not have to contend with, another layer of bureaucracy for industry to answer to. This bill will only help two steel manufacturers—BlueScope Steel and OneSteel. Coincidentally, upon the announcement of the carbon tax the value of those companies was diminished by over $300 million collectively. What a quirky coincidence that the compensation package is $300 million. And the day after there was another $100 million to boot—and they have not recovered. What we have with this bill is an eligibility criterion for compensation under the bill which requires an applicant to have produced at least 500,000 tonnes of crude carbon steel annually from 2009-10. In Australia only two companies meet that criterion—BlueScope Steel and OneSteel. Therefore, the remaining businesses, which employ about 80 per cent of Australia's steelworkers, will not benefit under this plan.

I note that the bill also establishes mechanisms to monitor the application by eligible corporations of payments made under the two proposed schemes. Talk about locking the stable door after the horse has bolted! Not only will you have to engage the new bureaucracy, you will now have them looking in. It is all very Orwellian now. Normally people learn from their mistakes, but with this Gillard-Brown alliance government I have grave doubts. We all know about the propensity of Labor and the Greens to have a mantra of 'tax, churn and spend', but this latest example is 'take with one hand, churn it through a new bureaucracy, and give it with the other hand'.

Of course, this compensation will run out after four years, while the carbon tax will continue to go up and up and up. What are the long-term impacts of the carbon tax on the steel industry? The carbon tax is not just a four-year impost; it is ongoing and it will rise. After the compensation runs out, the industry will again have to compete with steel imports from countries that do not have a carbon tax. And what about the smaller players in this industry who will have to adjust without any government assistance? They will have to compete against the biggest manufacturers in Australia, who will receive support, and against imports from countries without a carbon tax.

The government is playing favourites with steel manufacturing. Where is the recognition of the rest of rural Australia as well?

Senator McKenzie interjecting—

Fiona Nash (NSW, National Party, Shadow Parliamentary Secretary for Regional Education) Share this | Link to this | Hansard source

Hear, hear!

Sean Edwards (SA, Liberal Party) Share this | Link to this | Hansard source

I hear my colleagues over there, Senator Nash and Senator McKenzie, in furious agreement. Where is the rest of rural Australia? Notwithstanding the importance of the Australian steel industry and the important contribution it makes to employment and GDP, one questions why this is the only industry receiving special attention from the government. The steel industry is not the only industry that is facing severe undue strain from the Brown-Gillard government's carbon tax. Only this afternoon the National Farmers Federation President, Jock Laurie, came out and said:

Ultimately, the carbon tax risks compromising the competitiveness of our agricultural industry.

He went on to say:

Our domestic agricultural industry competes on an international playing field—one that is no longer even when it comes to carbon. Overwhelmingly countries across the world are developing climate policies that recognise the importance of agriculture and prevent additional costs being added into their farmers’ businesses.

Mr Laurie also argued that today's decision means that in Australia the indirect costs of the carbon tax will be borne by our farmers—farmers who have spent decades becoming as efficient as possible in order to stay competitive globally. The figures speak for themselves. We know farmers are going to shoulder the burden of additional input costs, in some cases of up to $10,000 per annum, and we still have real concerns about the processing sector costs being passed back to farmers. Every farmer in this country wonders tonight what the future holds for their operational costs.

The parallels with the steel industry are uncanny, which begs the question: why is the government not providing the same kind of support to agriculture as it is to the steel industry? The Australian red meat sector, for example, is our No. 1 agricultural enterprise and is estimated to contribute $15 billion to the economy. We are the world's largest meat exporter, but the industry faces fierce competition in a highly competitive, price sensitive, world commodity market. The meat industry globally has traditionally been in a high-volume, low-margin business environment. To survive, it is required to employ a cost-plus business model running on a very tight one to three per cent profit margin and requiring very tight control over costs in order to be competitive. This sector, like the steel industry, is highly export dependent—80 per cent export dependent.

Under the government's carbon tax package, the food industry will receive $150 million over six years to assist the industry to become more energy efficient as part of the Clean Technology Food and Foundries Investment Program. But this program is on the basis of a $3 industry contribution for a matching Commonwealth contribution of $1, so you have to find that capital to get a 25 per cent contribution from the government. This pales in comparison to the $300 million being provided over four years to how many companies, Senator Nash, Senator McKenzie and Senator Madigan?

Doug Cameron (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Senator Edwards, could you please address your comments through the chair.

Sean Edwards (SA, Liberal Party) Share this | Link to this | Hansard source

Sorry, I was getting a bit social. Two companies. It is $150 million over six years to hundreds of companies or $300 million to two companies over four years. I know which industry I would like to be in. That is nothing against those two companies; it is not their fault.

Participation in such assistance would involve considerable upfront capital contribution from the industry as a prerequisite at a time when the industry would already be experiencing declining profitability and deadweight costs of the proposed carbon tax regime. Clearly any assistance provided by the Commonwealth should be genuine, unconditional and in the form of untied government assistance. Notwithstanding this, the red meat processing industry is potentially facing substantial cost imposts under the proposed legislation, with no specific assistance for direct obligations like other identified emissions-intensive trade-exposed industries and no opportunity to pass the scheme costs forward to our export customers. Why is it that this Labor government has only considered the steel industry? Why is the government playing favourites? Some of Australia's most important industries will now be in need of assistance, just like the steel industry will be. The carbon tax will place additional pressure on a range of important industries, particularly those in rural Australia like the red meat sector, the wine supply industry and in time, I suspect, grain exporters.

Australian steel manufacturers already comply with a number of environmental laws and regulations that their foreign counterparts do not have to contend with. If the goal is environmental gain then why add further pressure to an industry, which by global standards is quite clean and efficient, that may result in it moving offshore? This $300 million in compensation from the government is a token gesture to industry, but it does highlight just how serious the carbon tax is for Australian industry. It shows us how uncompetitive the carbon tax will make industry. The compensation for just one industry is a snub to other important industries like the red meat industry, which also faces highly competitive export environments and will face huge costs in order to adapt and cope with the looming carbon tax.

The impact of this toxic tax on companies such as T&R Pastoral in my home state of South Australia—where Senator Penny Wong, Senator Farrell, Senator Gallacher and Senator McEwen live—will be significant. The increase in the costs of energy such as electricity and gas will lead to an increased cost of $2.36 per beast and 21c per sheep or lamb processed. These figures on their own do not sound like a lot, but when you consider how many head are processed by this important South Australian employer the impact is significant. They process 200,000 cattle and 2.25 million sheep each year. This will result in an increase in cost of $944,000 per year from higher energy costs. Why is the government not doing more to help this and other processors adjust?

This is compensation for a carbon tax, pure and simple; that is all it is. It is not about structural adjustment for the steel industry. It is about carbon tax compensation. How many times have we heard those opposite loudly proclaim that only the biggest polluters will pay, ignoring the fact that those so-called polluters are some of the major industries in Australia?

And when it finally dawned on the government that the steel industry was going to be hugely disadvantaged by a carbon tax, it realised it had to do something, otherwise 91,000 steelworkers and a $29 billion industry were destined for the scrapheap.

The government wants us to support this bill, yet much of the important detail of the Steel Transformation Plan will be included in a legislative instrument rather than in primary legislation, as the bill itself does not detail the plan. It is not good enough to state that a draft of the plan should be released between now and the end of the year. This is not good enough. We are expected to trust the word of this government. How can we, when the Australian electorate has been told deliberate untruths about what caused this bill to be formulated in the first place?

Clause 9(2) provides that the Steel Transformation Plan is a self-assessment plan. In other words, it is up to the eligible steel company to determine whether its application of payments is consistent with the overall objective of the plan. Again, this lack of supervision and accountability raises once more the track record—yes, we will tick them off as we go; tick, tick, tick—of this Gillard Labor government. It is a record of pink batts, school halls, cash for clunkers, GroceryWatch and Fuelwatch—the list goes on. We all love school halls, but we do not like those school halls that cost three times what they should.

Sacrificed on the altar of carbon dioxide rectitude, the steel industry was belatedly made the beneficiary of this, the Steel Transformation Plan Bill 2011, by the Gillard government. I repeat: if there had been no carbon tax, this bill would not be necessary. I suspect that those words of Wayne Goss in 1996 when he talked about the election that year will come true when the Australian people front up to the next election: they are likely to take to this government with baseball bats.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I rise tonight to remark on the Steel Transformation Plan Bill 2011. I note the absolute hypocrisy of the coalition and point out that the facts are quite contrary to what has been said here tonight. With or without a carbon price, this Steel Transformation Plan Bill is industry assistance and would have been required even if there had been no carbon price because of the high Australian dollar, the consequences of the global financial crisis and the situation that the Australian steel industry finds itself in.

The hypocrisy is extraordinary and I am looking forward to Senator Edwards going up to Whyalla in South Australia and telling the people at OneSteel why he opposed any injection of finance in keeping OneSteel operational in South Australia. And it will be interesting to see because the Leader of the Opposition went up to Whyalla and made a great news story about the fact that Whyalla would be razed to dust. I am sure that Minister Carr, the Minister for Innovation, Industry, Science and Research, who is sitting here tonight, can recall the media coverage of the leader of the coalition up there—

Senator Edwards interjecting—

Doug Cameron (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Senator Edwards, you cannot make interjections if you are not in your chair.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Mr Acting Deputy President will recall the Leader of the Opposition, Mr Abbott, going up to Whyalla and telling them they would be razed to dust. He got a great ovation there, but I wonder if Senator Edwards will get the same ovation when he goes up there and tells them that he will not support the $300 million Steel Transformation Plan.

Equally, I wonder whether Senator Nash, who was in this chamber earlier, is going to go down to the Illawarra and tell the people there that she is not prepared to support the $300 million Steel Transformation Plan. The scenario is that under carbon pricing the steel industry is going to get compensation under the energy-intensive, trade-exposed compensation plan. It is getting that already. This is a government-only initiative that came out of the Multi-Party Climate Change Committee, because in that committee we said that our job is to compensate for the level of trade exposure as a result of a carbon price; it is not the job of the Multi-Party Climate Change Committee to look at industry assistance beyond neutralising the impact of the carbon price.

However, the government stood firm and said that the steel industry in Australia is in trouble. It is in trouble because of the legacy of the global financial crisis. It is in trouble because of the high dollar. It is in trouble because it cannot compete with cheap imports—as a result, I have to say, of free trade agreements which the government and the coalition are mad keen on and which the Greens have pointed out for years are undermining Australian industry.

Having said that, that is why we have this Steel Transformation Plan. And that is why we Greens reserved our judgment. We said, in exactly the same way as has been pointed out tonight, that it is not just the steel industry suffering because of the high dollar and it is not just the steel industry that is suffering as a consequence of the legacy of the global financial crisis, so why pick this industry? But, having picked this industry, this transformation plan—$300 million over four years—is about keeping steel manufacturing in Australia.

The reality is that if we are going to get an energy transformation to renewables in Australia we need Australian made steel. One of the issues here is that not only do we need Australia made steel but we need to seriously look at the standards against which imported steel is measured. What we are hearing, from both OneSteel and BlueScope Steel, is that imported steel does not meet minimum standards that Australian steel is required to meet and that a level playing field would go some way to assist. Having said that, one of the things that really undermined BlueScope Steel in the course of this discussion was that, on the very day or the day after the Steel Transformation Plan was announced, BlueScope Steel announced a massive bonus scheme for its executives. In fact, Paul O'Malley pocketed $712,000, on top of his $2 million salary, at the time he was sacking 1,000 workers and 300 contractors. I ask you, Mr Acting Deputy President: how can workers in Australia accept the fact that an industry says it is in trouble and needs government assistance, the government comes with $300 million over four years, and then, almost thumbing its nose at government and that request, the executive team says, 'We have now secured government support so we can reward ourselves with this massive bonus across our executive team'?

I asked to see BlueScope Steel, and when they came into my office I asked them how they could justify doing that. They said: 'Well, they're two entirely separate matters, Senator. One is our performance bonus scheme for our executive; the other, of course, is our support in the face of the consequences of the global financial crisis, the high dollar et cetera.' I pointed out to them that, as far as the Australian public, the 1,000 workers and the 300 contractors are concerned, it is precisely the same issue. It demonstrates why in Australia we need a great deal more accountability in terms of executive salaries vis-a-vis the wages and conditions of workforces.

We are talking about the realities of Australian manufacturing in a global, competitive environment in which Australian manufacturing is struggling to remain competitive, with low-wage economy competition, no enforcement of a level playing field in standards and of course our high dollar brought on by the minerals boom. So I was very pleased to see the Green Jobs Illawarra Action Plan. This green jobs action plan was worked up by the University of Wollongong, the Department of Environment, Climate Change and Water, the South Coast Labour Council, the Australian Industry Group, Industry and Investment New South Wales, TAFE New South Wales, the Department of Education and Training New South Wales, the Southern Councils Group and the Illawarra Business Chamber.

All those people came together in the Illawarra, recognising that the vulnerability of the Illawarra is its dependence on coal, steel and its heavy industrial base—all of which they perceive are under pressure because of the global financial environment in which they are currently competing. In February 2009 they presented a plan to the New South Wales government. It was 'an action plan for green job generation and industry development'. A review of the plan focused on manufacturing, construction and retrofitting, renewable energy and power generation, research and development, skills and training, infrastructure and general employment. The plan says that the Illawarra community has recognised that things like housing, retrofitting, food production and water recycling could generate more green jobs in the Illawarra if support is given to the Green Jobs Illawarra Action Plan.

This is the context in which we are discussing this tonight. Let it be very clear that the coalition are not supporting any industry assistance to steel manufacturing in Australia. For them, any change into the future is about importing steel from other countries. That is basically where the coalition are coming from. They are failing to recognise that this is an industry assistance plan over and above the compensation for the carbon price. It is separate from the carbon price. That is why we are voting on it separately—because it is a separate measure from the carbon price, which has its own compensation mechanisms. Clearly, the coalition have gone out and manipulated and exploited as much as they possibly can the concerns the workers have in those regions. They are now voting against an injection of funds that would enable the kind of development that would see diversification in these regions, where they desperately need innovation. The fact is that, if we are to have a steel industry in Australia into the future, we have to have innovation, we have to have enforcement of higher standards and we have to have better skills training.

I am very sad that, as a result of BlueScope's announcement of the loss of 1,000 jobs, we are going to see significant changes in the Illawarra. I am certainly hoping they will embrace the low-carbon economy. From discussions with them and with OneSteel I know that they recognise that they have to now embrace the development of new products to give them a competitive advantage in the domestic economy. They started talking about the way that they have been working with Australian universities, innovators and entrepreneurs to develop products that are suitable for the Australian construction environment.

One of those products is a roof coating paint that reduces the internal temperature by up to six degrees of houses that are in extreme environments that suffer from very high temperatures during the summer. I congratulated them on the fact that they are saying: 'Okay, we need to be manufacturing a product that is suitable for the Australian domestic environment. We need to produce something that Australian builders and consumers will want to use because it will seriously improve the quality of life and the energy consumption of people living in those dwellings.' I put to them: 'Has BlueScope or OneSteel talked with, for example, the University of Newcastle about the work they are doing on thin-film solar? Have they actually been and talked to them?'

There is the opportunity to maximise domestic competitive advantage with those products. They have not talked to them, but they undertook to start looking at that because they are looking at ways in which they can advantage domestic manufacturing.

From the Greens point of view we are really keen to make sure, as we manufacture the towers for wind turbines, as we see the rollout and the Clean Energy Finance Corporation funding large-scale solar arrays in Australia and solar thermal, that it is Australian steel that is behind the rollout of those facilities. I want to make sure that we are producing steel in Australia to drive this renewable energy revolution. That is one of the strengths of the package that we have developed in the Multi-Party Climate Change Committee with the Independents, the government, the Greens and industry all talking to one another and saying, 'How can we have an integrated package that says we need education and training, we need maximising of innovation, we need rolling out of the university research sector with the manufacturers to develop products which are suitable for Australian conditions and which maximise the return to Australian manufacturers?' That is what the thinking has been.

Everybody knows that productivity in this century is not going to be about using more resources. Productivity in this century is going to be about using more brainpower to maximise local opportunity by getting cleverer about the resources we use. It does not matter whether it is agriculture or manufacturing, that is the challenge that we need to follow.

Having said that and having talked about the Green Jobs Illawarra Action Plan, which I think has a lot of merit, I want to move the second reading amendment that I have circulated in the chamber. For the benefit of those here I will read it out now and I move:

At the end of the motion, add:

and that the Government, in allocating funds under the Steel Transformation Plan, pay particular regard to the Green Jobs Illawarra Action Plan and any other similar plans in other affected regions.

The advantage of this is that the Illawarra has stood up and said, 'We know we are vulnerable.' Therefore they have sought a community group, if you like, which includes all stakeholders in the Illawarra, and undertaken to move to a situation where they create new jobs, new diversity, new strength. One of the advantages of the Green Jobs Illawarra Action Plan is that it can be replicated in other areas of vulnerability. And there are other areas around Australia of similar vulnerability where their previous advantage has been based on coal and heavy manufacturing. They now know they can move to developing new strengths in the new industries of the low-carbon economy, particularly renewables and the whole green jobs through efficiency, for example. I would like to think that in rolling out the Steel Transformation Plan, not only can this plan be taken into account in the case of BlueScope in the Illawarra, but it can be taken into account in other places around Australia.

I would hope that the government would feel able to support this second reading amendment because it is asking that the government 'pay particular regard to'. It is not actually enforcing anything other than a request to the government to look at this plan as it rolls out the $300 million and ask: is there any way we can use some of that money with BlueScope to advantage the Illawarra and build resilience there against ongoing vagaries of the global environment—and the South Australian experience of OneSteel—and make sure we do not lose any more jobs? And also make sure that, if people are losing their jobs—as has occurred with OneSteel with the 1,000 who lost their jobs and with the 300 contractors—there are other opportunities that they can go to in the same area rather than having to leave the Illawarra. I do congratulate all of those bodies who have participated in the plan and I would hope that we would get the government's support for this second reading amendment.

Finally, I want to note that there can be no pretence anymore that the coalition did nothing other than, in the most cynical way, exploit the concerns of people in vulnerable regions. They went to those areas to hype up their anxiety over a carbon price, in spite of the fact that the energy-intensive trade-exposed industries will be compensated under a carbon price. But they did not care about that. They were prepared to exploit the vulnerabilities of those communities in order to try and improve their opinion poll results. When it comes down to actually saying that we understand your vulnerability, we know how the global financial crisis affected you, we know how the dollar is affecting you, we know how competition is affecting you and we are prepared to stand up behind an industry assistance plan, the coalition run a mile.

Their leader has cut and run and flown to London rather than face the fact that in this parliament today this carbon price, the whole mechanism, passed the parliament. We all know that that Conservative leaders meeting does not start in London until the 10th. There was every capacity to fly out tonight and still get there. Anyway, the meeting is being chaired by John Howard. The Leader of the Opposition could have—

Gary Humphries (ACT, Liberal Party, Shadow Parliamentary Secretary for Defence Materiel) Share this | Link to this | Hansard source

For God's sake, Christine, have you got any real arguments?

Simon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | Link to this | Hansard source

Do what, Christine? What did you expect him to do?

Doug Cameron (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Order! Senator Birmingham!

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

Thank you, Mr Acting Deputy President. He could have just gone to Sydney to meet John Howard. I do hope when he meets David Cameron, the Prime Minister of the United Kingdom, that David Cameron will point out to the Leader of the Opposition that the United Kingdom has a target of a 50 per cent reduction in greenhouse gases by 2027. I look forward to hearing what the Leader of the Opposition's response to that is when he comes back to Australia.

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

I suppose it is fitting that after the carbon tax we have to pick up the dustpan, mop and broom, and start cleaning up. I think we ought to go back to the genesis of this carbon tax. It was brought about by the—

Doug Cameron (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Senator Boswell, can I draw your attention to the issue before the chair.

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

I am well aware of the issue before the chair—it is the Steel Transformation Plan Bill. The reason we are going to need this $300 million package to support the steel industry is that the carbon tax is going to put huge costs on the steel industry. Mr Howes, one of your union partners, Mr Acting Deputy President, could see this coming. He could see what was going to happen to the steel industry. He made the statement that we are all aware of: 'If one job is lost, the unions will pull out.' This flowed through and we now have this $300 million steel industry package, because a lot of Mr Howes's members work in the steel industry. So, today, we have this package to assist the steel industry. Without the carbon tax, this steel package may not have been necessary—although I will acknowledge that with the high cost of the dollar and a number of other issues this support may have been needed.

I listened to Senator Milne and it really was like listening to something like Alice in Wonderland. Senator Milne wants to—

Simon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | Link to this | Hansard source

I always thought Alice in Wonderland was quite nice.

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

Alice in Wonderland is a dream and Senator Milne is in a dream, saying that you can actually run a steel mill on renewable energy. You cannot. It is impossible, because your costs will keep going up. To run a steel mill on renewable energy will require millions and millions of RECs, renewable energy certificates, at around $60 or $70 each, depending on the time. That will add to the cost. When costs are added, people will buy their steel and other steel products from China.

The more you add to the costs in Australia, the more people flee the local product and go and buy an imported product. That should be perfectly obvious, even to the Greens. They just sit there and dream that we are going to go to a magical land of renewable energy. I hate to disillusion Senator Milne and her Greens friends. We had a small photovoltaic cell factory in this country and it had to close down, and 30 jobs were lost. That is the level of employment for a photovoltaic cell factory in Australia. Thirty jobs were lost, because 59 to 60 per cent of the photovoltaic cells are made in China—and so are the windmills. Where is this magnificent dream of renewable energy going to come from? We are going to have education and we are going to do all sorts of things, but it is not going to produce one more job.

Today, we are locking in behind a package of $300 million to support the steel industry because Mr Howes had to be bought off. He had to be shut up. Remember when he was parading in front of every television, saying, 'If just one job is lost then we are out of here'? In fact, he got $300 million, and has anyone heard of him since? It is the Paul Howes steel package, and that is why this has the support of the unions at the moment. I wish it was as easy as just buying off an industry. It is not. Australia has to face the fact that we are a high-cost country with high wages and pretty good conditions for the average working guy, and it is all because we have cheap power, not because we have some renewable energy thing that is going to put up the cost of manufacturing in Australia. We cannot do it that way.

Never mind, because Peter Beattie is going to come to the rescue on this! Peter Beattie has been employed for $1,000 a day on a part-time basis to look after the resources sector, including the steel industry. I think Peter Beattie was not a bad politician, but I do not know that he will be able to miraculously change the steel industry, the aluminium industry and the cement industry. They are all suffering because of the carbon tax. I do not think that he will be able to wave his magic wand and produce a panacea for all these industries.

After we have the steel industry package, we are going to try to beef up an antidumping package. I do not necessarily not support what the government is doing here. But it cannot go in and heavily penalise the steel industry with a carbon tax at $23 a tonne—going up to $29 a tonne—and then impose a renewable energy charge that will go to seven, eight or even 10 per cent next year, bundling that all up, and expect these industries to remain viable.

We are an international trading country. The first time we traded was when we sent a bale of wool to England and we have been an export country since that day—the day that Macarthur bundled up a bale of wool and sent it over there. We live to trade and we trade to live, and that is how the economy works in Australia. We have niche markets. We have areas we are good at and areas we cannot compete in. But one of the areas we have always competed in is manufacturing. We have always had a manufacturing industry. Unfortunately, today I think we are going to see the demise of that.

I have heard about magical new jobs. I have heard about a new economy. But we could not even sustain 30 people in a photovoltaic cell factory. How are we ever going to compete? This is an absolute dream! Senator Carr, you should understand that. Most people think you are a practical person—a little to the Left, but a practical person. You go out and talk to industry leaders, you go out and talk to people on the shop floor; they must tell you. You want to put a Walter Mitty world out there where everything works. I am terribly sorry, but as industry spokesman you have to understand these things.

We are going to spend something like $300 million. OneSteel made a loss of $185 million for the 2011-12 financial year. The company also had to cut 400 jobs across the country, and half of those came from the steelmaking industry. The announcement was followed on 22 August by the announcement by BlueScope that it had lost a billion dollars. It said it was exiting the steel export market to focus on its profit-making domestic steel market. Ninety per cent of domestic steel is imported from China. This is difficult to understand. It will probably be more after the carbon tax comes in. Those two steel industry companies employ 20,000 people. They made big losses last year and the year before. Their stock value has been decimated, from $12 to $2. The carbon tax of $23 per tonne is going to cost something like $120 million. They are already making a loss. Put a carbon tax and then a renewable energy tax on top of that and it is very obvious that the industry will continue to make losses.

Senator Milne called the people in. They probably said: 'Oh well, they're the Greens; we've got to be nice to them. Yeah, we'll listen to them.' Senator Milne, I say to you: yes, you have to be innovative—of course Australian industry has to be innovative—but you also have to be competitive. People will just take a sample of what we can manufacture in Australia over to China and have it made there. There is no reason for windmills to be made here. There is no reason for photovoltaic cells to be made here. They will be made in China. That is where they are made. Fifty-nine per cent of all photovoltaic cells for the world are made in China. You may be able to talk to Mr O'Malley, the BlueScope manager, and the OneSteel manager and they will be nice to you. Of course they are going to be nice to you; they are going to get $300 million. They are not going to come in and abuse you. They will want to be nice to you. But I talk to these people too, and they tell me that putting on a carbon tax has just about killed their industry. If their industry had some support out there, the shares would not be $2. People know. Once you do this to an industry, you push it further and further out.

It is not only happening with the steel industry. It is happening with the aluminium industry. We have seen Rio Tinto in the last couple of days put their refineries on the market. We have seen that happen because of the carbon tax. Where is their $300 million? The cement industry is suffering too. Where is its package? Where are the packages for the cement industry and the aluminium industry? You cannot just pick up one industry. Many industries—in fact, the whole of Australia's manufacturing industry—are suffering because of a high dollar. Now they are going to have a carbon tax inflicted on them. After that they will have a renewable energy tax inflicted on them. When you keep adding to the burden, adding to the cost, people just flee overseas where the conditions that people work in are not as good as in Australia and where the environmental conditions are not as good. We will see an exodus of Australian industry to Third World countries, which will create more and more carbon pollution.

From 30 June next year it is going to be a catastrophe. You may not think so, Senator Carr, but I talk to people too. One of the people I talked to only last week was someone who owns generators. He said: 'Ron, you're talking about a 10 per cent increase in power. For households, that's about right. But this is going to be a 30 per cent increase in the cost of power to industry. Add another seven per cent this year for renewable energy, pushing it up to 10 per cent next year, and it is going up 40 per cent.'

Today I had a look at a submission from Bindaree Beef. They are going to be paying $4 million in electricity charges. That is an industry that has to be able to compete with other abattoirs around the world. They have worked out that the only way they can survive is to pay the grazier $10.72 less. So Bindaree Beef said: 'We cannot hold these costs. The only way we can survive'—and this was in the submission—'is to pay the graziers and farmers about $11 less to make up for the carbon tax and the increased costs of freight and coal and all the other inputs.' That is going to happen right around Australia. It is already happening around Australia.

I support looking after industry. We have got a $300 million package here, but our argument is: if you do not put a carbon tax on, you do not need a package. If you do not have a carbon tax, you do not penalise the industry and you do not have to incentivise the industry. But you do not listen to this. It goes on. Senator Carr, go out and talk to the Business Council of Australia or to the Chamber of Commerce and Industry, who are more involved in small business. It is a killing field out there at the moment, where governments, state and federal, are putting up prices, increasing costs, by about 30 per cent every two or three years. There is a limit, and the limit is just about reached. You are going to have a capital strike in this country, where businesspeople will not invest money because they have not got the faith that they can make a profit. It is happening now, but it is really going to happen from 30 June next year. The first bills that come in with the carbon tax are going to be horrific. People have genuinely thought, 'It's 10 per cent; it's going to hurt; it's going to kill us,' particularly if they have got a cold room or some big process that uses a lot of power; but, when they get that bill, it is going to be up at anywhere between 30 and 35 per cent. That is when you are going to find out you are in deep trouble.

It is no good paying people some sort of bribe by saying, 'We're paying for the cost of your power.' That does not matter if you have not got a job or your kids or your grandkids cannot get a job. That does not matter. This is what you are going to see. You know, Senator Carr, that your modelling was done on the assumption that everyone would be in this. You know that there was other economic modelling produced yesterday that said that the costs were way out of line. The Treasury modelling said the costs would be $33 billion by 2016. This modelling said the costs would be $180 billion. We have never been able to get the modelling.

I wish that we could have an industry. I wish that people could have jobs. I wish that people could be reliably employed. Tonight I was talking to someone who employs 69 people, and he said that, every day, the state governments and the federal government come up with some scheme that is going to put more costs on him. Today the government is putting $300 million into the steel industry. I hope it works. I hope it sustains them; I really do. But, unfortunately, $300 million is going to be a drop in the bucket when you are putting a $29 a tonne carbon tax on them. It is not going to work. As for trying to make a steel mill run on a windmill, that is just fantasy land, Senator, and you know it. If you were honest, you would get up in the Senate and say it cannot be done. If you tell people the truth, they are more likely to follow you. But you feed this fantasy to them. What you and the Labor Party are saying, following the Greens, is that we can have this new magic world where everyone is happy! It is like the yellow brick road. All we have got to do is follow the yellow brick road and we will come to the Emerald City, and the Emerald City will be made of renewable energy! Well, renewable energy is a huge, costly sinkhole that you pour money into, and it does not sustain industry. (Time expired)

Simon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | Link to this | Hansard source

It is a pleasure to follow Senator Boswell in this debate on the second reading of the Steel Transformation Plan Bill 2011. He makes so many valid arguments about what the government are up to with this bill and about its potential impacts. It is nothing more than a tricky little tactic of the Labor government that they have brought this bill on separately from those which we voted on earlier today. We saw the government put through the parliament earlier today the Clean Energy Bill 2011 and 17 other bills related to the clean energy package. When they wanted to have committee consideration of the legislation, they thought it was perfectly reasonable to send the Steel Transformation Plan Bill off to the same joint select committee that considered the clean energy bills. They lumped them all in as one. They were happy to have the 19 bills considered together. Yet, for purely political purposes, they seek to have this bill considered separately from the other 18 clean energy bills. Why? Because they want to create some type of fake wedge so they can say, 'The opposition voted against support for the steel industry.'

That is what Senator Carr wants to go out there and do, and no doubt that is what he will do. But people will see through it. People will see through it because they will know, well and truly, that the only reason the government has proposed this in this way, in this place, at this time, the only reason the government has put the money on the table, the only reason we are voting on it on the same day as the carbon tax, is the carbon tax. This is all about the carbon tax. If you do not have the carbon tax, you do not need the compensation. That is not to say you do not need plans for the steel industry, Minister Carr; you absolutely need plans for the steel industry. But you have been dragged kicking and screaming into putting together this little piece of legislation to hand over a bit of money all because of the clean energy bills and all because of the carbon tax.

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

And Paul Howes.

Simon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | Link to this | Hansard source

And, frankly, it is all because of Paul Howes, as Senator Boswell highlighted and as I will be turning to as well: 'Not one job!' But the minister has already failed that test, of course.

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

No, because Peter Beattie got a job.

Simon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | Link to this | Hansard source

Peter Beattie did get a job, so there is one winner so far out of the Steel Transformation Plan Bill. But I thought Paul Howes was promising that not one job would be lost, and already we have seen the steel industry shed jobs since this plan was announced and even since this funding was announced. Let us understand that this plan and this funding are nothing more than a rotten little bandaid that will not last very long. It will apply some money for a period of time and so that will buy a little bit of peace for the government. That is all they are hoping for. They are hoping that this money will last past the next election, that it will ensure the steel industry in Australia survives past the next election, that they can keep Mr Howes and his cronies quiet past the next election, that it will actually achieve that much. That is all they are hoping for because, of course, the money will run out.

This is not some type of ongoing support to address the fundamental issues of the carbon tax, because the money from this runs out and the carbon tax, if Labor get their way, is here forever. It is here to stay. That is certainly what Prime Minister Gillard was saying today, that Labor stand by the carbon tax now, in five years, in 50 years, however long it takes—forever. So we know the government have the carbon tax here forever. We know the carbon tax is going to keep going up and up and up. The price of it keeps going up dramatically right through at least the modelled period to 2050, and it will go up beyond that, given the way the trajectories and the curves have indicated, at that time. This money will be flat out lasting for a couple of years, and then the steel industry are on their own again unless they manage to convince the government to fork out for another bailout plan. So this is little more than a bandaid. It is a bandaid measure that may last until the next election if Senator Carr is lucky. It may manage to hold things together for that long, but that is all that it is likely to achieve.

Senator Carr, you come in here and you try to talk about how it is a transformation—and you insert that grand word, 'transformation', into the title of this bill—but nobody is conned by that; nobody thinks that you are going to somehow, through this one bill and through this $300 million in spending, miraculously set the steel industry up for a bright future under the carbon tax, without some type of further assistance. So nobody is conned by that, and ultimately we will face a future in which governments will either have to fork out yet more money for the steel industry to prop it up under the carbon tax or, alternatively, see the steel industry die not the death of a thousand cuts but instead the death of one mighty sword blow to the neck in the name of the carbon tax.

The AWU state secretary in South Australia, Mr Wayne Hanson, had it right when he was talking about some of the major industrial towns in my home state. Take the words of Mr Hanson, when talking about Whyalla, the home of the OneSteel operations there, and Port Pirie, the home of the Nyrstar smelter there, and about what the impact of the carbon tax could be on those towns. What did Mr Hanson have to say about the potential impact of the carbon tax on the towns of Whyalla and Port Pirie in South Australia? He said this of those towns under the carbon tax:

'Goodbye. They will be off the map …'

That is what Mr Hanson thought the carbon tax would do. Why did he think that would be the case? Why did he think that the carbon tax would cause the towns of Whyalla and Port Pirie to be wiped off the map? He said:

It's ridiculous to consider (a carbon tax) when you don't have other countries that are prepared to adopt a common approach," he said. " … Should we be the trail-blazer?"

Mr Hanson seemed to really hit the nail on the head. Sadly, after he made these comments he went to ground very quickly. I can only assume that some of his friends in the labour movement suggested that such honesty was not encouraged in the labour movement and that such honesty in the public arena was not something that they wanted to hear from people like Mr Hanson, who might actually be exposing in some way the government's rotten plans that will destroy industries like the steel industry. Mr Hanson was not alone. It is little wonder that he thought that he could get away with such brazen honesty about the carbon tax and its impact on the steel industry. He made those comments on 19 April, when they were reported, and it was perfectly reasonable for him to think he could say that because a few days earlier, on 15 April, his national secretary had equally been out there being pretty bolshie about the impact of the carbon tax on the steel industry. That was none other than Mr Paul Howes, the same Mr Howes whom Senator Boswell mentioned before and whom we saw bobbing up on our television screens and coming to great national prominence on the night of the coup when Mr Kevin Rudd was rolled as Prime Minister of this country. Mr Howes bobbed up on Lateline and announced to the world that he was behind the change and that he was delivering the prime ministership to Julia Gillard, who was then, of course, the Deputy Prime Minister. Mr Howes, obviously a man of great influence in the Labor Party, had said on 15 April, as the national secretary of the Australian Workers Union, that he wanted to ensure that this carbon price will not cost a single job:

If one job is gone, our support is gone.

Michaelia Cash (WA, Liberal Party, Shadow Parliamentary Secretary for Immigration) Share this | Link to this | Hansard source

That was Paul Howes?

Simon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | Link to this | Hansard source

That was Paul Howes, Senator Cash; you are correct. It was the same Paul Howes who put Prime Minister Gillard in the Lodge—if Paul Howes is to be believed, anyway—who was laying down the law to Prime Minister Gillard: 'If you're going to go down the path of this carbon tax, if one job is gone, our support is gone.' They were the ominous words of the Australian Workers Union. Little wonder that Mr Hanson, the state secretary in South Australia, felt empowered—he felt liberated; he felt free—as a result of Mr Howes speaking so freely about the potential implications of the carbon tax. With the liberation, empowerment and freedom that Mr Howes gave to Mr Hanson, Mr Hanson went out there and indicated that he thought the carbon tax could wipe the towns of Whyalla and Port Pirie off the map.

Why? It is pretty simple when it comes to the steel industry. It is really very, very simple. The steel industry in Australia supports around 15,000 jobs or thereabouts. When it is making steel, more than 80 per cent of the emissions from steelmaking are released in the chemical reaction that produces iron. There is no technical alternative and, according to the steel industry, one is decades away. Let us dwell on that technical fact for just a moment: more than 80 per cent of the emissions from steelmaking are released in the chemical reaction that produces iron; there is no technological alternative to this and one is at least 20 years away, according to the steel industry. But hang on; I thought—let me just check on this, but I thought—this Steel Transformation Plan was only offering $300 million over the period of 2011-12 to 2016-17, according to the explanatory memorandum, and even then, when you look at the detail of the bill, that funding could all be committed far, far sooner than in that short window of time. So we have at least 20 years before the steel industry is going to find some way to mitigate, to overcome, the fact that, technologically, 80 per cent of its emissions are locked into the chemical reactions that take place when you make steel. Eighty per cent are locked in, and the industry faces 20 years before it thinks there might be a technological breakthrough, yet this government is offering a few pieces of silver for a few years. It is offering $300 million for just a few years. What happens after that, Senator Carr? What happens after that to Australia's steel industry? How do you expect this industry to remain competitive after that? Indeed, the Chairman of OneSteel, Mr Peter Smedley, said: 'There is no technology available today or in the foreseeable future for the company to be able to reduce its emissions. A carbon tax would merely be an additional cost.'

You might call this a transformation plan—and, Senator Carr, it might well be a transformation plan—if there were an alternative technology readily available in the next couple of years that the steel industry could pick up off the shelf out of Europe, Asia, the United States or somewhere else and apply to their production practices in Australia. That might then transform the industry. It might transform their emissions profile. It might actually be part of a transformation plan. But, when that alternative technology is not available, this is nothing more than a bandaid. It is simply a bandaid. It is a handout given, as I said before, to keep the industry intact past the next election.

Do the industry welcome it? Of course they do. It is better than facing the carbon tax without this. But, from the coalition perspective, our position is crystal clear: the industry should not have to face the carbon tax and therefore should not have to have the compensation. If you want to provide funding for alternative purposes—to address the impacts the industry feel from the higher dollar or from the higher labour force costs that come from the industrial relations policies of this government; if you want to provide funding for other purposes—that is a separate debate.

But the government in every sense except the parliamentary votes has coupled this package with the carbon tax. It was only developed after the carbon tax was developed, in response to steel industry concerns. The legislation was only drafted and released with the final pieces of the carbon tax legislation. When the government wanted to have a committee of this parliament inquire into this legislation, it lumped it in with the carbon tax legislation. At every step of the way, this has been done in tandem, in lock step, with the carbon tax because that is what this proposal is all about. It is only out of a sheer political desire of the government to try to somehow wedge the opposition on this issue that it seeks a separate vote.

That is why we will not fall for such a blatant, stupid, political tactic. Our vote on this legislation will be the same as our vote on the carbon tax legislation because the two should have been voted on together. They should have been voted on as a package. Everyone in this chamber knows that. Everyone in this chamber knows that the two are in lock step and they should be voted on as a package. It is to the government's shame that they were not voted on as a package. And that is why the coalition will stick absolutely to the consistent position that we have taken throughout the debate today and over the last few days.

I did notice whilst in the chamber before that Senator Milne sought to move a second reading amendment to this legislation. Can I just reflect—because I had the opportunity to do so a couple of times during the debate on the carbon tax bills that were debated together, as against this carbon tax bill that is being debated separately—on how the tactics and approach of the Greens have changed in this place. Once upon a time, if the Greens wanted the government to consider a plan—be it for the Illawarra or elsewhere—as part of legislation, the Greens would propose detailed amendments to that legislation. They would take it into the committee stage and those amendments would be debated and would become part of the law if they were successful. Now, though, we see that, because the Greens dare not rock the boat with the government and the government dare not rock the boat with the Greens, the Greens have been pushed down to the stage and reduced to the point of simply doing second reading amendments to try to signal what they might like—to signal that they would like the government to take into account certain things in the proposal—rather than actually trying to put it in the legislation that the government should take into account certain things. This is what the Greens have been reduced to.

Of course, I can understand why the Greens might be a little timid about what they want to say in this regard, because we had the very embarrassing situation earlier this year where Senator Hanson-Young, from my home state, was quoted in an article headlined 'Steel town could thrive without steelworks, says Hanson-Young'. I tell you what: that was news to the people of Whyalla. They are very resilient people in Whyalla. They are very hardworking people. They are very decent people. They are people who try, of course, to generate a range of other industries and activities in their city. But OneSteel is directly responsible for the jobs of up to 4,000 people in this city of 22,000, and the very notion that Whyalla could thrive without the steelworks—thrive, no less—is, of course, just utter, utter madness.

My colleague Senator Colbeck, I think, highlighted just how much damage the carbon tax has done—in particular to BlueScope and OneSteel—in his contribution. He demonstrated that more than 60 per cent of the market capitalisation of those companies has been wiped off the share market since the carbon tax was introduced—well above what has been felt anywhere else. That is because the share market knows that, for the long term, this Steel Transformation Plan does nothing. It is no more than a bandaid designed to see the government past the next election.

Michaelia Cash (WA, Liberal Party, Shadow Parliamentary Secretary for Immigration) Share this | Link to this | Hansard source

I think we all know that, in relation to the Steel Transformation Plan Bill 2011, there is only one reason that we are standing here today in this chamber debating this particular compensation package, and that is that today the Australian people witnessed the greatest fraud ever perpetrated upon them: they witnessed the passing of the carbon tax legislation. They witnessed Labor senators on that side of the chamber completely, totally and utterly betraying the policy position that the Labor Party took to the 2010 election, which was, as we all know—because we have stood here and said it time and again—'There will be no carbon tax under a government I lead.' But what happened? The Labor Party, in order to form government, had to get into bed with the Australian Greens. Paul Sheehan, in his opinion column in the Sydney Morning Herald which was published under the banner headline 'Green by name, flaky by nature', said this:

The Greens are a fraudulent brand. There are not enough letters of the alphabet to encompass the image fraud this party is perpetrating on the electorate. It is simply not a party preoccupied with the environment.

That is the party that the Australian Labor Party formed government with, and as a result Australians witnessed today the greatest fraud ever perpetrated on them: the passing of the carbon tax legislation.

But, you see, the Labor Party had a small problem. In agreeing with the Greens to pass this toxic tax, they had upset a number of the unions that put the Labor Party into this place. For example, the great Paul Howes made a great big song and dance in the early days of the carbon tax when he said to the Prime Minister, the Labor Party and the people that he allegedly represents, 'If one job is lost under the carbon tax legislation, we will withdraw all support for the Gillard Labor government.' So the Labor Party had a bit of a problem, because they had done a deal with the devil—with the Australian Greens party—to push the carbon tax legislation through, but in doing so they had now upset the people on their own side. As Senator Mason has so eloquently said in this place, the Australian Labor Party are being cannibalised on the left by the Australian Greens and they are being sold out on the right. The Australian Labor Party now stand for absolutely nothing unless somebody is telling them what they have to do by way of a deal.

So what did the Labor Party have to do? In order to ensure that Mr Howes did not actually do what he had threatened to do—because, believe you me, there has been more than one job lost since the carbon tax legislation was announced—they had to put in place the compensation package that we are debating in this chamber tonight. There is no doubt that, if there were no carbon tax, we would not be standing here tonight debating a package that, as the shadow minister Senator Birmingham so eloquently said, is allegedly going to transform the Australian steel industry. Well, if we are transforming the Australian steel industry with this compensation package, God help the Australian steel industry. We all know—because Minister Combet himself is on the record as saying—that the only reason the government have brought this bill before the parliament is that they know that, in putting through the carbon tax legislation, there will be, without a doubt, a detrimental effect not only on the steel industry but on industries throughout Australia. That detrimental effect may well see the loss of jobs because of the closing down of these businesses in Australia.

Again, I go back to Paul Howes, the great saviour of the worker, who said, 'If one job is lost because of the carbon tax legislation, I will withdraw all of my support.' So what did Minister Combet come out with? On 10 October 2011 Minister Combet actually admitted that the establishment of the Steel Transformation Plan has been purely driven by the carbon tax. Why do I say that? It is because Minister Combet said, 'The negotiation of this Steel Transformation Plan did come out of the discussions we have had with the steel companies for months now over the carbon price issue.'

We on this side of the chamber have also had discussions with companies within the steel industry and the manufacturing industry in Australia. I am sure that when those industries came to see us on this side of the chamber they said to us exactly what they were saying to those on the other side of the chamber, which was: 'If you go through with this legislation, do you understand what the implications of it will be? It is bad enough that the carbon tax means a new tax for Australia of $9 billion a year. It is bad enough that the carbon tax means a 10 per cent hike in electricity costs for the mums and dads of Australia. It is bad enough that the carbon tax means a nine per cent hike in gas bills, and that is in the first year alone. It is bad enough that the carbon tax means a $4.3 billion hit on the budget bottom line. But, on top of that, it may well see the end of the steel manufacturing business as we know it in Australia.' So I say to Mr Howes, 'If you are actually a man of principle, if you are actually a man of your word, you will do exactly what you said you would do and withdraw all support from the Australian Labor Party.'

Even though the government have put forward this compensation package—or, as they like to call it, the Steel Transformation Plan—there is a problem for the steel industry in Australia. That problem is this: under the package that we are debating tonight, there are only two steel manufacturing firms in Australia that are going to benefit if this package passes the Senate. That is not us on this side of the chamber saying that; that is written into the Labor Party's legislation. I greatly doubt anybody on that side, let alone members of the Australian Greens, have actually bothered to read this legislation but, if they had, they would have seen in proposed section 4 that there is a defined term. That defined term is 'eligible corporation'. An eligible corporation comes down to two firms in Australia. Those firms are BlueScope Steel and OneSteel.

What that says to us on this side of the chamber and to the mums and dads of Australia who are going to be paying under the carbon tax that today passed through this place is that the great Labor Party, who said they never do deals, have done yet another deal. It was bad enough that the Labor Party did a deal with the big miners on the mining tax. It was bad enough that they did a deal with asylum seekers on the Oceanic Viking. But just to appease unionists and Paul Howes, the Australian Labor Party have done yet another deal. That deal results in just two steel manufacturers in Australia actually qualifying under this package. Senator Birmingham named so many of the other steel businesses in his speech tonight—thousands of steel fabricators all over the country. These are not big companies. Go to my patron seat of Brand and the Kwinana industrial strip back in Western Australia and you will see that these are not big companies.

These are companies that were set up by mums and dads of Australia who believed in the Australian dream. They actually believed this was a country of opportunities. They actually believed that this was a country in which you could have a go. They actually believed that the role of government, when it comes in particular to small businesses in Australia, is to provide them with a regulatory environment in which they can grow and prosper. And then they got the government that was formed at the 2010 election. The closest the majority of those in the government have ever come to a business in Australia is to ensure that that business is closed down. That is the reality and that is what is reflected in the package that we are debating tonight. Two companies will actually qualify for assistance under this compensation package. All those thousands of small businesses, those thousands of mums and dads who took a risk and decided to have a go, will get absolutely nothing under the so-called steel transformation package that we are debating tonight.

The impact that that will have on jobs in Australia will be absolutely devastating. It is estimated that in 2006-07 there were approximately 91,000 employees across the entire Australian steel industry chain. Do you know what the problem with that is? Only 15,000 to 17,000 of them are employed by the two companies that will qualify for assistance under this steel package. So 91,000 employees across Australia are employed in this industry, but only 15,000 to 17,000 of those employees are employed by the two companies that will potentially qualify for compensation under this steel package. So when the Labor Party stand up in this place and say, 'We are the party that looks after the little person, we are the party that stands up for employees in Australia, we are the party that stands up for the workers,' that is nothing more and nothing less than hypocritical rhetoric. What does it say to the approximately 75,000 workers in the steel industry in Australia who are quite likely to lose their jobs? They will not qualify for any compensation under the steel industry transformation plan, but what they will qualify for is a lot of pain under the carbon tax legislation. And the Australian Labor Party have the audacity to say to the people of Australia that they are the party that stands up for the workers in this country! That is a mantle that the Australian Labor Party, when they got into bed with the Australian Greens in 2010, well and truly gave away. They vacated that space.

If you want to look at the impact of the carbon tax on the steel industry, you need only look at the devaluation in the shares of OneSteel and BlueScope Steel since the government announced its carbon tax legislation. The figures do not lie. On 23 February 2011 the share price for OneSteel was $2.86—and then the government announced its carbon tax. And since then, right up until today, 8 November 2011, the share price of OneSteel has absolutely plummeted, and that is almost solely due to the fact of the carbon tax. It has gone from $2.86 on 23 February 2011 to 96c today. And that is only OneSteel. If you look at BlueScope Steel, on 23 February 2011 they were trading at $2.20. And what was the one policy announcement that this government made? Despite their election promise to the Australian people, despite the fact that they promised that there would be no carbon tax under a Labor government, they announced the imposition of a carbon tax. And what did the share price of BlueScope Steel do?

Brett Mason (Queensland, Liberal Party, Shadow Minister for Universities and Research) Share this | Link to this | Hansard source

Tell us.

Michaelia Cash (WA, Liberal Party, Shadow Parliamentary Secretary for Immigration) Share this | Link to this | Hansard source

Senator Mason, just like OneSteel it has plummeted. It was trading at $2.20 on 23 February 2011, but today it is trading at 74c. That is what you get when the majority of senators in this place on the government side are former trade unionists. That is what you get when the absolute closest that the people in the current government have ever come to a business is to ensure that that businesses is closed down. This is a government that just does not understand the reality of business. In particular, they do not understand the reality of small business and the fact that an announcement like the carbon tax—the pushing through of legislation that is going to increase the price of electricity, wages and almost everything that a small business touches—has an effect on a small business's bottom line.

Those of us on this side of the chamber know that the margins in small business are very small. If you move those margins, what you effectively do to that business is shut it down. Despite the fact that we are standing here tonight debating the Steel Transformation Plan Bill, none of those thousands of businesses—the thousands of steel fabricators all over Australia, many of them longstanding businesses operated by the mums and dads of Australia—will actually qualify for any compensation under this bill. What that says to those business owners is that they will have a decision to make, and the decision, as we know—because it has already been made by so many small businesses in Australia—is not going to be a very nice one. The decision will ultimately be to close their doors. And when they close their doors we all know what happens. They lay off employees—it is as simple as that. They lay off employees, and the mums and dads of Australia, who are already battling under the higher cost of living, will not have jobs and they will have no income.

That can all be put down to the Australian Labor Party, who promised the people of Australia prior to the 2010 election that they would not do this to them. They went to the election saying to the people of Australia, 'We will not impose a carbon tax on you.' And what that meant was: 'We will not impose a policy that is going to increase your electricity costs. We will not impose a policy that is going to directly increase your costs of living. We will not impose a policy that is going to see businesses in this country go offshore. We will not impose a policy that, in pushing businesses offshore, is going to see the closure of businesses in Australia and the loss of jobs by so many mums and dads across the many states of Australia.' But that is exactly what the Australian Labor Party did. Given the Labor government's betrayal of the people of Australia, it is patently true that Labor's continual claim that it alone is the party that looks after the workers is just more dishonest Labor rhetoric.

David Bushby (Tasmania, Liberal Party) Share this | Link to this | Hansard source

I also rise to contribute to the debate on the Steel Transformation Plan Bill. What a classic piece of doublespeak the title of that bill is. It makes me think that we are living in George Orwell's 1984, in which the ministry of peace conducted wars. The fact is that this Steel Transformation Plan is more like a steel snow job plan. It is really designed to cover up the dramatic effect that the government's toxic carbon tax will have on the steel industry—along with just about any other industry you can point a finger at in the country—and the need for some sort of pretence at doing something to keep the doors of the steel industry open.

The reality is that the only reason that there is any need for the Steel Transformation Plan is to try and limit the damage that we know the government's carbon tax will inflict on the steel industry. Indeed, Senator Thistlethwaite, earlier today in the debate on this very bill, made a statement which I do not mean to misquote him on, but I think he said that the effect on the steel industry will be devastating. He used the word 'devastating' and he made it quite clear that the effect on the steel industry will be devastating and that was why the government needed to introduce this plan. He is right. If there were not a carbon tax, there would not be a need for a Steel Transformation Plan, a steel snow job plan, or whatever you want to call it, because there would not be the devastating impact that the government's carbon tax will impose on the steel industry.

Senator Cash has very eloquently outlined the impact that this has already had on shareholders' assessment of the value of these two companies, and I will also look at that in a minute if I have time. It has been absolutely dramatic. We have seen a 66½ per cent fall in the share price of OneSteel since February of this year and a 66½ per cent fall in the share price of BlueScope Steel, a two-third slashing of the price. That is real money we are talking about. We are talking about $2½ billion slashed off the share price of OneSteel and over $2½ billion slashed off the price of BlueScope Steel. There is one reason, and one reason only, that that has occurred—the carbon tax.

You can look at the fall over the course of the year. It is quite clear that once the government set up its interparty committee on climate change and started talking about a carbon tax, the share price went into freefall, and it has continued on that line right up until the current time, when the share price is now roughly one-third what it was at the beginning at the year. Even Minister Combet, the Minister for Climate Change and Energy Efficiency, admitted that the establishment of the Steel Transformation Plan was driven purely by the carbon tax when he said that the negotiation of the Steel Transformation Plan came out of the discussions with steel companies which took place for months over the carbon price issue. The fact is that this is the 19th bill of the clean energy package. It may be not be described that way, but it is as necessary a part of the clean energy package as any one of the other 18 bills is. The impact that is being addressed by these bills, in part, arises directly out of the fact that the government has chosen, in breach of its solemn promise to the Australian people, to introduce the clean energy package and thereby its toxic carbon tax.

To the great shame of the Australian Labor Party, we have today, through the passage of those 18 bills, witnessed the biggest and most duplicitous betrayal of the Australian voting public this nation has ever experienced. Make no mistake, there is no chance that the ALP would have won enough seats at the last election to be in a position to sell their soul to the Greens if they had not promised that there would be no carbon tax under a government led by Prime Minister Gillard. The Prime Minister may be many things, but she is not a dunce. She knew in the lead-up to the election that the outcome would be close. She knew that the Australian people did not want a carbon tax. She knew that when the Leader of the Opposition challenged her to rule out a carbon tax in the days leading up to the last election she had no choice but to do so if she wanted to have any chance to hang onto power. And she knew that after the election, if she managed to hold onto power, she could, to paraphrase Mr Garrett, the member for Kingsford Smith, just change it all—and that is what she did.

In total disregard of the solemn promise that she made in order to trick enough of the Australian population into voting Labor, the Prime Minister immediately cast away any pretence of keeping that promise in order to do a dirty deal with the Greens to hang onto power. The national interest did not come into the decision. What is in the best interest of Australians did not come into the decision. A sense of integrity or wanting to keep good the promise made to the Australian people did not come into the decision. The only thing that mattered was holding onto power and, to paraphrase ex-Labor minister Graham Richardson, she did whatever it took to do so.

The fact is that the experts—the shareholders, the financial advisers and the financial analysts—agree that this is going to be absolutely devastating for the steel industry, which has a strong and proud record in Australia as an employer over many decades of tens of thousands if not hundreds of thousands of Australians. The steel industry is one that has enjoyed the confidence of shareholders for decades if not over a century, I think, in some cases. It has a long and proud history and has enjoyed strong investment, particularly in recent years, since the introduction of the superannuation guarantee charge, from superannuation companies. The reality is that there is a large amount of Australian superannuation holders' money in OneSteel and in BlueScope Steel.

In recent days we have heard stories about how the government would like to ensure that workers' superannuation and retirement incomes are protected into the future and that they are able to have a good solid nest egg when they retire, and that is why they are increasing the amount of the SGC from nine to 12 per cent progressively over the next few years. It is not going to be much use to increase their SG contributions by three per cent if you are making decisions which slash 66 per cent off the value of the shares that they hold in those companies. Make no mistake, a large percentage of Australian superannuants have shareholdings, through their trust funds, in companies just like these and in other companies outside the steel industry whose share prices will be similarly affected—to the same extent, less, maybe even more—by the decision that has been put into effect through the passing of the legislation earlier today.

The other thing about this transformation plan is that only two Australian firms—BlueScope Steel and OneSteel—qualify for assistance. This is because of the definition of 'eligible corporation' which is contained in section 4 of the bill. In other words, the plan provides a rerun of the mining tax renegotiation debacle, where the government has gone off and talked to the top end of town, done a dirty deal with the top end of town and looked after them, but paid no heed whatsoever to middle-size companies or small companies.

Senator Cash highlighted very effectively the impact that the carbon tax will have on small businesses right across the country, particularly those that are involved in the steel industry. If I had more time I would talk about how the bill could only run for one year, whereas the carbon tax has been put in at least until 2050, on the basis of the government's own document, but the reality is that the vast majority of companies involved in the steel industry, other than these two companies, receive no assistance whatsoever despite the fact that they are also energy intensive in the same way that BlueScope Steel and OneSteel are. Their costs will also dramatically increase and their ability to be competitive on an international scale or with imports will also be vastly reduced as a result of this tax.

I understand that there are other senators who wish to speak so I will conclude my comments. I think this is an appalling bill that should never have been needed to be brought forward.

Michael Ronaldson (Victoria, Liberal Party, Shadow Minister for Veterans' Affairs) Share this | Link to this | Hansard source

I congratulate Senator Bushby on his speech on the Steel Transformation Plan Bill, and I also congratulate him on his contribution to Movember. The money he will be raising is for a very good cause.

I just say that the political fix is in, with this bill. I will not go over the other comments that my colleagues have made tonight, but they have put a very strong case that this bill is just about shoring up three or four Labor seats which should not need shoring up. Because of this diabolical and toxic carbon tax, those opposite are required to put in $300 million of taxpayer funds to sort out three or four Labor seats.

I find it absolutely intriguing that on 10 October this year Minister Combet, the Minister for Climate Change and Energy Efficiency, admitted that the establishment of the Steel Transformation Plan had been driven purely by the carbon tax. He said, 'The negotiation of the Steel Transformation Plan did come out of the discussions we have had with the steel companies for months now over the carbon price issue.' But what did we hear from the apologists for the Labor Party tonight? Senator Milne, the power sharer—the new powerbroker in the ALP—was pleading the case tonight that it was unrelated. Well, I am sorry, Senator Milne, Minister Combet said that it was. Why would you come in here and say it was unrelated when Minister Combet has said that the plan was directly related to carbon pricing? I will tell you why: you have taken this power sharing to heart. In fact, you have been upfront about the power sharing.

All we heard from the Australian Labor Party this afternoon, after your speeches, was that this carbon tax was their idea. They were trying to get some ownership of this toxic tax. They have been dragged kicking and screaming into this. If you speak privately to many on the other side you will find out that they know this is a dirty deal for the Australian community. They will tell you in private—I will never betray confidences—that this is a deal done with the Greens that will spell the demise of the Australian Labor Party.

Senator Jacinta Collins interjecting—

You should be able to see that, Parliamentary Secretary. You of all people, with your philosophical background in the Australian Labor Party, should know that you have been completely and utterly seduced by the philosophical Left. The philosophical Left have got you, and they have got the rest of the Labor Right, and they have dragged you, kicking and screaming, into a deal that will destroy you.

I can tell the Parliamentary Secretary for School Education and Workplace Relations—through you, Acting Deputy President Crossin—that I would fight and kick to protect the Australian Labor Party before I would do anything to protect the Australian Greens. The Australian Greens are hell-bent on destroying what we stand for—both socially and economically. The desire of the Australian Greens is to have a world political party that will completely change the way this country operates—and any other country they happen to get control of.

This is a very, very bad day for the Australian people. It is an equally bad day for that once-proud Australian Labor Party. And this is not power sharing at all. This is a deal that will destroy the Labor Party. If the members of the Labor Party cannot see what has been done then I think that is even sadder.

Senator Cash and others have referred to the share price of these two companies—the only two companies that will share the $300 million. As Senator Cash quite rightly said, on today's valuation BlueScope is at 73c and OneSteel is at 94c. Do you think the shareholders in those two companies are celebrating this deal today? What did the market do today? It voted with its feet in relation to this deal and said that $300 million would not in any way compensate for the enormous damage that has been done to our companies. The market said it is a bad deal. The market always speaks the truth and it shows 94c versus $2.86 and 73c versus $2.30. The market never lies. The market knows today that these two companies will be utterly devastated by the carbon tax and the market knows full well that $300 million will not compensate for that loss. If it did, I can tell you now that the share price would be back at $2.86 and at $2.20, and the fact that it is not means the market has factored in the damage of this toxic carbon tax and factored in the fact that this is a bum deal. It is a bum deal for the companies concerned, it is a bum deal for the shareholders concerned and it is a bum deal for the Australian people.

What galls me most is that this deal was done on the back of a lie. And if there is one person in this country who should be trusted during an election campaign, surely that one person has to be the Prime Minister of this country. The one person who gives a solemn vow to the Australian people and should be believed is the Prime Minister of this country. The second person who should be believed in this country is the Treasurer. Both of them went to the Australian people and promised with their hands on their hearts that there would not be a carbon tax—'There will not be a carbon tax under a government I lead.' Wayne Swan: 'We're not going to respond to this hysterical proposition that we'll introduce a carbon tax.' Well, we know what happened.

How members on the other side can go back to their electorates and say to them that they have got a deal out of this beggars belief. Indeed, on the other side of this chamber there are people who were elected on the back of a lie. I have no reason to believe that they knew that the lie was being told at the time. I acknowledge that. But I also seek acknowledgement that the only way that this matter can be clarified is for the Australian people to have the opportunity to vote on it. That is what we have been demanding for the last 12 months: to go back to the Australian people and say to them, 'You have a choice about this carbon tax.'

The bottom line is that if we lost the election that would be an imprimatur for the carbon tax. But if we won the election it would be an imprimatur for us to get rid of it, to take this toxic tax away. What I have not heard is the Australian Labor Party acknowledging that, if we win the election on the back of a referendum on the carbon tax, they are obligated to vote with us to vote this tax down. I do not know why there is not one person from the Labor Party that is prepared to stand up and say that that is what will happen.

David Bushby (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Where was Conroy?

Michael Ronaldson (Victoria, Liberal Party, Shadow Minister for Veterans' Affairs) Share this | Link to this | Hansard source

Of course, the deputy leader was not here, and he says it is a conspiracy theory. I do not think it is a conspiracy theory from what I hear coming out of the cabinet at this stage—talk about a leaky boat. Senator Conroy was not here for a good reason, and you can look around and see the looks on the faces of those who know this is wrong. You can see them saying to themselves: 'I wish I was anyway else but here. I wish I could swap places with the deputy leader, Senator Conroy, who was not here.'

I will finish on this note. There is a unique opportunity for the Labor Party to finally lock it in now, so we can spend the next two years not debating this fact but going through on the back of reality—one member of the Australian Labor Party could stand up and say, 'If we go to the polls and we lose, we will vote with you to get rid of this toxic tax.' It is your call. It is your obligation, and we demand you do so—as do the Australian people.

Eric Abetz (Tasmania, Liberal Party, Shadow Minister for Employment and Workplace Relations) Share this | Link to this | Hansard source

The Steel Transformation Plan Bill 2011 represents the emergency surgery necessitated by an act of gross violence—in this case, gross economic violence, perpetrated by a government in lockstep with the Australian Greens, a government hopelessly out of its depth and hopelessly incompetent. Put very simply: but for the carbon tax we would not need this compensation package. That was revealed to the Australian people by Mr Combet himself, the Minister for Climate Change and Energy Efficiency, on 10 October 2011 when he admitted that the establishment of this so-called Steel Transformation Plan had been driven purely by the carbon tax.

As with all things Labor, this bill has an Orwellian title. It is called the Steel Transformation Plan Bill. Well, the steel industry has already been transformed, courtesy of this Labor government. The steel industry has been transformed because of the threat of the carbon tax which this parliament today voted to enact—might I add, against the express promise to the Australian people by those sitting with the Australian Labor Party.

The steel industry in this nation was in fact transformed with the announcement of the carbon tax. Hundreds of millions of dollars were struck off the share value of these big steel companies, great employers, great historic institutions in the Australian economic landscape. They were devastated by this announcement. People from time to time say: 'But what does it matter? It's a big steel company; why does it really matter?' You know why it really matters? Because superannuation companies, for example, invest, and invest heavily, in these sorts of companies, and what do superannuation companies do? They pay dividends to superannuants and the self-funded retirees of Australia. So when you mug industries like the steel industry and take away their financial viability, you take away income from the superannuants and the self-funded retirees of this country. That is why this sort of economic recklessness needs to be exposed and why we oppose this sort of so-called 'transformation'. It really is Orwellian to call the mugging of an industry a 'transformation'. I suppose if you are in a bad accident you can say that your body has been transformed. Most people would say that you have been badly injured. That is what Labor, in lock-step with the Australian Greens, have done to the steel industry, and that is why they have now decided to provide a bandaid measure of some $300 million.

Concetta Fierravanti-Wells (NSW, Liberal Party, Shadow Minister for Ageing) Share this | Link to this | Hansard source

Bandaids are not good for bullet wounds.

Eric Abetz (Tasmania, Liberal Party, Shadow Minister for Employment and Workplace Relations) Share this | Link to this | Hansard source

As Senator Fierravanti-Wells interjected so very aptly just then, 'Bandaids are not good for bullet wounds.' They might cover up the damage, they might make the victim feel a little bit better, but that does not overcome the inherent damage or the inherent wound that has been inflicted. Let us make no mistake, the steel industry is only one of the industries to suffer.

In Europe the once proud aluminium smelting sector has moved, and in Europe they only have about one-tenth the carbon price that Australia is going to have foisted upon it. They have not moved to solar, they have not moved to wind power, they have moved to Africa. Does anybody actually believe that the environmental standards in Africa are better than they were in Europe prior to a carbon price in Europe, modest as it is? Of course not.

Similarly, we had the example in Australia earlier this week of Coogee Chemicals, a company that was willing to invest $1 billion in a world-class methanol plant, with 150 jobs and over $14 billion worth of exports to be earned by our country. Where have they gone? They have decided not to build in Australia. They have decided to build in China, where they admit the carbon footprint, the carbon dioxide emissions of that plant will now be four times what would have been emitted in a pre-carbon-tax Australia. That is why the legislation that was passed earlier today not only is so damaging to jobs and the economy but, perversely, is also going to damage the world environment.

This steel transformation bill is in fact the last of the 19 bills that make up the totality of this package. It is interesting to note that the people who were in the galleries earlier today are not here now to see through the steel transformation bill. They have no concern for the steelworkers. The Greens were bragging for a week that there was going to be an early vote and people should come to Canberra to the gallery and celebrate. They were out there asking everybody to come. During the debate, because some of the Labor contributions were so boring, especially that of Senator Wong, I spun around and I counted 100 empty seats in the gallery. What is more, half of the seats were filled by departmental officials whose jobs were on the line. This great popular movement in support of the carbon tax fell flat. The opinion polls have not deceived in relation to public support. Of course, we know that the opinion polls were telling Labor before the last election that a carbon tax would be immediate death. What did Labor do? They promised no carbon tax. A solemn promise.

Just before I came into the chamber I was doing some talkback radio on 2SM. Every single caller was feeling betrayed, not by the Australian Greens but by the Australian Labor Party. It is a party that once proudly stood for the working man, for a manufacturing sector in this country, and was genuinely concerned about ensuring that the cost of living did not get out of hand and about genuine job security. What we have instead now is a Labor Party that has sold its soul, its philosophical soul and policy soul, to the Australian Greens in a bid to stave off the death that it would have otherwise faced at the last election. By deceiving the Australian people, by doing a dirty deal with the Australian Greens, it may have staved off its execution for a period of three years.

The people of Australia will come to judge the Australian Labor Party as they judged it in 1996 after Mr Keating's promise of l-a-w law tax cuts. People in a democracy believe in the conventions of a democracy. They believe and require that their leaders should tell the truth. They believe that there is such an important commodity as integrity. That is why even a great President such as George Bush Sr, who was in stratospheric heights in the opinion polls in the United States, fell from glory because he had made a solemn promise, 'Read my lips: no new taxes.' At stratospheric heights in the opinion polls he increased the taxes and suffered the consequences. So it happened to Paul Keating when he promised l-a-w law tax cuts and then immediately revoked them after the election. I somehow think that we will get the trifecta at the next election. I am not saying that with any hubris or arrogance, I am just saying that that is the course of history and people will judge their leaders according to their promises and their delivery on those promises. That is why Mr Howard did the right thing when he changed his mind in relation to the goods and services tax. He said to the Australian people, 'Re-elect me and I will introduce a GST.' He gave the people the opportunity to have a say, an opportunity that has been denied the Australian people in relation to this carbon tax.

Debate interrupted.