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Committee: Building and Construction Industry (Improving Productivity) Bill 2013, Building and Construction Industry (Consequential and Transitional Provisions) Bill 2013

Estimates & Committees
Lee Rhiannon 30 Nov 2016

Tuesday, 29 November 

Senator RHIANNON (New South Wales) (21:26): I move Greens amendment on sheet 7984:

(1) Clause 34 , page 29 (after line 19) , after subclause ( 2 ), insert:

(2A) Without limiting subsection (1), the Building Code must include provisions ensuring that no less than 90% of the steel (other than excluded steel) used in a particular building work is manufactured in a blast furnace or an electric arc furnace located in Australia.

(2B) For subsection (2A), excluded steel means:

(a) any kind of steel that is not manufactured at any location in Australia and could not be manufactured in Australia for the purposes of a particular building work:

(i) at a cost ( a reasonable cost ) that does not exceed 20 percent of the base cost of the steel if manufactured in Australia; and

(ii) within a reasonable time; or

(b) any item made in Australia that is required to be made from a special kind of steel that is not manufactured in Australia and could not be manufactured in Australia at a reasonable cost; or

(c) any steel not manufactured in Australia for which the unit price would be 20 percent higher than the relevant price for steel specified by MEPS International Ltd or another global steel price prescribed by the regulations.

The Australian steel industry is on an knife edge. In Whyalla the steelworks are under administration. In Port Kembla the steelworks are somewhat healthier but, coming from that state, I know the fear the locals have, and I share them, that one morning you could wake up and the headline in the Illawarra Mercury could well be that BlueScope has closed its doors. That is why the amendment we are moving here is responsible. The wise thing would be for people committed to jobs growth to our regional areas and particularly to our steel industry—giving the steel industry in Australia of future—would support this.

There has been a great deal of work on this issue. I would certainly congratulate the South Coast Labor Council and the Australian Workers Union from the Illawarra because they have set out a very clear case around steel procurement and why this is a responsible way to go. We have just finished some debate on the issue of the future of the steel industry. Part of the problem with the former amendment was its reliance on standards. It might sound good in words and look okay on paper, but nothing really happens—it is not enforced; it is abused time and time again. Whereas if you have clear procurement requirement that a certain amount of steel has to be used in projects in which the government is involved must be sourced locally, then you really have a very easy solution to ensure that there is an ongoing market for steel produced in this country.

Costings show that mandating local steel in New South Wales alone will increase the annual construction budget by less than $34 million in return for maintaining 10,000 jobs—5000 of them in the Illawarra—and $10 billion in economic activity. This is comprehensive research that has been undertaken over a long time. This proposal for local steel procurement is not a radical idea. Today we were talking with BlueScope Steel about their very successful operations in the United States, where there is a Buy American program, which they acknowledge is not impacting on their local operations. It counters the false barrier which is often thrown up about the future of the steel industry when it is linked to procurement—'Oh, well, it is not compliant with trade agreements.' There are so many states in America with a steel industry that can operate under this Buy American campaign, and there is no way that they are not compliant with international trade agreements. The BlueScope people acknowledged in this meeting that, if there was a problem, they would have been jumped on and other companies would have been jumped on long before, but that is not the case because it has been worked out. I want to give emphasis to this because this argument we have heard, disappointingly, from Senator Xenophon, who has shifted his position considerably—not that I do not acknowledge that there has been some progress around the procurement issue tonight—but we should still be going to what this amendment sets out.

As I said, it is not a radical proposal. China and the US have reserved the right in trade agreements to exercise local procurement strategies over imports. So they are actually getting some balance back between trade agreements and their local industry. The extraordinary thing is that when successive Australian governments have negotiated trade agreements they have not looked after our steel industry the way China and the US have looked after theirs. Across the United States laws requiring domestic steel to be used in government infrastructure are already in place. As I said, they have done this in a number of states. The bill that was passed in the New South Wales parliament on the combined votes of the Greens, the Labor Party, the Christian Democratic Party and the Shooters, Fishers and Farmers Party was based on some of the developments in the United States. So there is a movement here. It is possible. In the New South Wales situation, the bill has been passed, is now on its way and is waiting for debate in the lower house. We really should be catching up with these new trends.

We know that current production measures emit a lot of greenhouse gas emission—I totally acknowledge that. Nonetheless, we need steel to combat climate change. We need steel for so many things. We need steel for wind turbines. There are so many aspects to the renewable energy revolution that is occurring. Again, it is about getting the balance right and moving away from reliance on thermal coal as the energy source for the steel industry. We acknowledge that the issue with coke and coal remains a challenge, but there is fantastic research going on in this area. A lot of it—I am very proud to say—is coming out of the University of Wollongong Innovation Campus. Australia could lead the world in transitioning to a jobs-rich renewable-energy future and lead the world in developing clean steel production methods.

There is a real question here for Senator Xenophon and the whole Nick Xenophon Team. I am very concerned to hear the shift that has gone on in this debate. Ahead of the election, Senator Xenophon vowed to make the survival and future of Arrium in Whyalla a key election issue. He warned that, if re-elected, he and any parliamentary colleagues from his team:

… unashamedly use our votes to hold out for Arrium to get the help it needs.

He went on to say:

… Whyalla will turn into Australia’s biggest ghost town without Arrium operating and thriving. The cost of assistance now would be a fraction of the cost of the welfare bill and loss in tax revenue if Arrium falls over.

My colleague the Australian Greens parliamentary leader, Senator Richard Di Natale, has outlined this serious contradiction that we are now seeing arise within the Xenophon team.

Also very relevant to our considerations here is that Senator Xenophon outlined the policy below during the election campaign:

An overhaul of government procurement laws to ensure that Australian steel (and other locally manufactured products) is used in taxpayer funded infrastructure projects (whether federal, state or local where commonwealth money is involved) taking into account the social and economic benefits of local procurement. This would in-effect be a 'buy Australian policy' given the enormous flow-on benefits to the economy.

That was what the three senators from the Xenophon team took to the election. It is a very good position that we should be building on, working to get into the legislation that we are debating here in parliament and, hopefully, getting supported.

Having worked very closely with Senator Xenophon, I am deeply troubled by the shift that we see here. It was only a few months ago that those words were written. It was only a few months ago that the commitment to this was spelled out so clearly to South Australia in the federal election. And we can see the results. I am not saying that it was just around the steel procurement, but to go to four MPs in the whole parliament and three senators from one is a huge achievement. People have elected the Xenophon team on the basis of a range of promises and commitments. I would believe, knowing how serious the trouble is that the Whyalla steelworks is in, that that would have been a very significant promise when it was made.

These amendments the Greens are proposing will achieve what the Xenophon team set out in their policy document. I would argue that it is now time for the Xenophon team to match their rhetoric, to match the words that they went to the election with—this is very serious—and to support the Greens amendments. I would argue that it is not inconsistent with what they are doing with the government and with Senator Carr. There are steps that we can take in getting to a good position on a whole range of issues. We know there are complexities around the procurement issue, but I do not see contradictions. That is why I would argue the Xenophon team are contradicting what they have been supporting.

I urge all senators here today to get behind these Greens amendments. They are a way to protect local jobs and, most importantly, ensure that Australia has a steel industry now and into the future. Right now, what is happening in Whyalla and Port Kembla is very worrying. The steel industry is in a precarious position. It is bringing great uncertainty to local communities, which is something that we should address—and we can address it with this amendment. It is also bringing uncertainty to the future of the steel industry and has wide implications for our economy. So I recommend the Greens amendments to senators.

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