Are Government Actions Enough to Boost Confidence?

14 Sep 11

The following is a transcript from Senator Kim Carr's closing address to the Australian Steel Industry Convention.

First, as far as this Government is concerned, Australia must be in the business of making things, and Australian steel has to be part of that.

Second, we deal with the world as it is. Not the way it was. Not the way it should be. The way it is.

Third, the Government is not in the business of calling “game over”. There are a million people in manufacturing, and there has been for the better part of fifty years.

Given how tough things have been, many would have been pleasantly surprised to read in the latest National Accounts that manufacturing in general is actually growing in this country. Metal products rose 14 per cent for the quarter and 16 per cent in the year to June. That is a testament to the resilience and creativity of Australian manufacturing. That’s why I’m confident that we will emerge from what is now the biggest social change we’ve seen in two generations in a stronger position.

We take the view that we want a balanced economy, that employs people in high-skill, high-wage, quality jobs. That’s not just for economic reasons, but because it reflects the sort of society we want to be. We are in the business of transforming this economy, firm by firm, region by region. We want to work with you to achieve that outcome.

Manufacturing has a great future, but it won’t be like the manufacturing of the past. It will be manufacturing of a different type, employing new technologies and new industrial processes.This is how we will maintain prosperity and living standards for our people. Everyone here knows there are disputed claims about the level of local content in resources projects.

My position is, whatever the level is, it’s not good enough. We have many world-class engineering companies in this country. My position is, there’s not enough of them. While there is more we can do to improve local content for Australian steel, it has to be recognised that there’s a two-way street. We have the right to expect the companies who profit from our resources will give local industry a fair go.

Local industry also has to be internationally competitive. Commercial relationships have to be made on mutual self- interest – not on compulsion. No-one here is interested in excuses. So what are the obstacles to achieving our objectives?

We have a record high dollar that has accentuated our problems of cost and scale. Pessimism and negativity breeds pessimism and negativity. In seeking to attract investment, we need to be confident about the future.

I’m not claiming there are easy answers. I am saying that we can work together to build on our successes.

The Government has not been idle in dealing with the challenges that are now attracting a lot of attention. From our first day on the job, we’ve been committed to this task.

We’ve increased support for science and innovation by 43 per cent, and we raised the budget for universities and the CSIRO to new record levels.

We established a genuine R&D Tax Incentive, estimated to be worth $1.8 billion next year to industry.

We built the $50 million Buy Australia at Home and Abroad package to get work for local firms.

We tightened the EPBS and the Tariff Concession System. We applied AIP requirements to the Government’s own procurement. We appointed a Supplier Advocate to work with steel - a post now held by Dennis O’Neill - and many other industries.

We have also increased funding support for the Industry Capability Network and the Supplier Access to Major Projects Scheme. We put in place the national Enterprise Connect business advisory network, which has already worked with some 500 metal and metal fabrication firms to improve their efficiency and competitiveness.

We established a Steel Industry Innovation Council which has put the industry at the centre of government deliberations on policies like anti dumping and trade policy.

We ensured the Steel Institute is on that council, chaired by the Secretary of the Department, so you have a voice at the table. That’s before you take the carbon price package into account.

There’s $300 million to transform the steel industry and $200 million for food and foundries. Tony Abbott told you there’s no way on God’s earth that you can have a solar-powered steel mill or wind-powered manufacturing plant. But turn that problem around, and you see the potential. You can’t have wind turbines without steel. You can’t have solar plants without steel. You can’t upgrade farms, factories and homes without steel.

There are real opportunities on the table, and if we don’t claim them, other countries will. Furthermore, you can’t have over $20 billion in industry assistance to transform our economy without the carbon package. If you want to have the co-investment arrangements the Government has put on the table, you need to support that package.

I also make this claim. Our researchers belong in the front-line of the challenge – from our universities, from the CRCs, and from science agencies like ANSTO. Look at the CSIRO, which has been working with BlueScope and OneSteel on a low-carbon breakthrough program for five years. CSIRO’s integrated steel-making process is one of the few known technologies which can deliver a substantial cut in carbon emissions at minimal cost to smelters. There is no competing technology which will be market-worthy before 2040. The estimated value of that knowledge over the next twenty years is $42 billion, assuming just 10% global market penetration.

That is the potential we can unlock in this country. So where do we go from here? We need to get people around the table to find practical ways of getting more work for more firms. That is what the new Resources Sector Supplier Advisory Forum, makes possible, with the extra weight of the new Resources Sector Supplier Envoy Peter Beattie.

We want to use whatever leverage we have with project proponents to increase opportunities for Australian industry.If people are concerned that Australian firms are being locked out of bidding for opportunities I want to repeat that we will follow it up. That’s a serious commitment. As the Prime Minister said, we are looking at how we can toughen the accountability and extent of the AIP arrangements. But we are also looking at a cultural change around these issues. We need to establish AIP as a way of doing business - not just a priority for government – that benefits both the project proponents and the local suppliers.