Interview with Melinda James - ABC Radio Illawarra

BlueScope Steel, Illawarra industry

JOURNALIST: Firstly I just wanted to kind of get you to characterise how you see this meeting, it’s been described as an economic summit, as crisis talks, what is it?

IAN MACFARLANE: Well this is a meeting to plan the future of the Illawarra region, it’s part of a transition that’s going on in this region that’s been going on for some time. If we look back over the decades there has been a downsizing in the workforce at the steel mills, there’s been new industries come to the region and there’s been the university which is an absolute Australia-class, world-class university. So there are opportunities to bring new jobs to the region, we do need to manage the transition that will go on as part of the efficiency drive by BlueScope in the steelworks here, but it is a meeting about the future, about ensuring that Illawarra has a place in the economic development of Australia.

JOURNALIST: Ok so this meeting is not so much about saving the steelworks, ensuring its survival or keeping as many jobs at the steelworks as possible, this is really about preparing for mass job losses?

IAN MACFARLANE: No, it’s about keeping the steelworks, but accepting that in keeping the steelworks there will be 500 job losses and that’s the proposal that BlueScope have put to the workers, they’ve bluntly said it’s 500 or 5000 jobs, if we can’t shed jobs and be more efficient and be more competitive in the way they produce steel then there isn’t a future for the steel industry so we’re here to manage that 500 job transition and we know the pain that those people will go through, we’ve seen it in other areas, in other industries in Australia. But the long term goal is to keep the steelworks going and get it competitive but at the same time build up new industries in the Illawarra that can provide long term jobs as well, because the workforce here will continue to grow- this is an area people like to live in.

JOURNALIST: So I guess there are two issues here, two roles potentially for the Federal Government to play, and one is in, I guess ensuring that the steelworks, within reason I suppose, has all the support it needs to continue. It looks like it’s not actually asking, BlueScope isn’t asking much of the Federal Government here, it’s more some kind of relief from State Government taxes and the burden of some State Government levies. What’s BlueScope asking of you the Federal Government that can assist them into the future?

IAN MACFARLANE: Well BlueScope were part of the big ask from industry in Australia to get rid of the Carbon Tax, and we’ve done that so we’ve made BlueScope on an equal footing to its competitors in countries that didn’t have a Carbon Tax, we’ve also exempted BlueScope from the Renewable Energy Target even though we increased that target to 23 percent of electricity consumption by 2020, we were able to do so in such a way that major consumers in industries that competed internationally were exempted and BlueScope was one of those. We’ve got rid of red tape and green tape so the Commonwealth, as you say, has already done a very significant amount for BlueScope, and the ask now is on the State Government, BlueScope aren’t actually asking the Commonwealth for anything at the moment.

JOURNALIST: Ok, and, I mean, in your view, there’s nothing more that the Commonwealth can offer? You’re not considering tariffs, that’s correct isn’t it?

IAN MACFARLANE: Well we are working on the anti-dumping laws in Australia and we have significantly boosted anti-dumping laws in Australia since we’ve come into Government. We’ve put more resources into my department which handles anti-dumping claims, and into the Anti-Dumping Commission which makes the final decision. We have sped up the process so it’s now the fastest process in the world and the laws are as stringent, if not more stringent than most countries that we trade with. We are looking at a second tranche of anti-dumping legislation by the end of the year and I would assume that the Parliament will support that, and as I say, we’ll look at further resources into the Anti-Dumping Commission if we need to because no one denies that people are trying to dump steel all over the world and we’ve had instances here in Australia where steel has been dumped and we’ve imposed penalties against that, so we are looking at making sure that the trade is fair, the dollar’s devaluing and that’s good for the local industry as well because it makes imported steel more expensive and locally produced steel more valuable when we export it.

JOURNALIST: So in terms of assisting the operation of BlueScope into the future, you know, to the extent that the Government can, can I just confirm though that tariffs are off the table, you’re of the belief that changing procurement policy would really just be a drop in the ocean because the Federal Government isn’t a massive user of steel anyway in projects, so it’s really all about toughening anti-dumping legislation, is about as much as the Federal Government can do?

IAN MACFARLANE: Well I mean procurement is an area we’ll look at but again it’s a State Government area. If we were to ensure that all the steel in the warships that we’re going to build over the next 20 years was Australian steel, or where it was the right quality was Australian steel, we’re talking about less than 5000 tonnes of steel a year so that’s not going to make a big difference, but as I say Melinda, I’m not ruling anything out, I am down here to listen to what everyone has to say, we’ve invited the unions, the council, local business people, the university et cetera and of course BlueScope and local parliamentarians as well because we want to hear all the ideas. There is no simple solution to what’s happening here in the Illawarra and we need to make sure we grab this opportunity to give the region a strong future.   

JOURNALIST: And so I suppose one of the things you might be considering in terms of looking ahead at what the regional economy faces, last time we went through massive job losses at BlueScope about a thousand jobs a few years ago now, there were investment funds, there were innovation funds, with significant investment from the Federal Government in terms of building other industries and diversifying the economy, is that something that we can possibly expect from the Federal Government?

IAN MACFARLANE: Well I’m certainly prepared to consider that and if we look at what we’ve done in tandem with the New South Wales Government and the infrastructure that New South Wales has invested in down here, in particular by way of roads, yes we are running innovation and investment funds in areas like Geelong and South Australia and North Melbourne as a result of the closure of the car industry, so that’s something that we’re prepared to look at. That scheme, when it ran last time, was under-subscribed, I’m not sure why, we’d have to see why that scheme wasn’t successful last time it was run here where it’s been successful where this Government has run a scheme elsewhere. We will look at options in terms of assisting innovative businesses to establish here in the region, we’ve got the entrepreneurs’ grants that are a million dollars, up to a million dollars for businesses to develop new products and that’s why we’re involving the university, I mean, one area they excel in is 3D printing and manufacturing of the future, so they will create products that’ll employ people in jobs in the future. So we will look right across the board and having science in the Industry portfolio and being able to use science to set industry policy will be very much in focus down here in the Illawarra over the next months.    

JOURNALIST: So I mean it really is the Illawarra saying goodbye, it’s the inevitable decline really of manufacturing, of kind of 20th Century manufacturing, and the focus will all be on high tech is that right?

IAN MACFARLANE: Well I don’t think it is the inevitable decline, I mean, there is every opportunity to make the steel industry in the Illawarra competitive and that’s a cooperative effort between the workers and the company itself and they are sorting that out, but along with that I want to see a broadening of the manufacturing base just as I’m seeing in every other part of Australia. And if you look at what’s happening in Melbourne or Adelaide or Brisbane or Perth, there is a move to a higher technology, higher value product that can be sold all over the world that provides jobs, both skilled and unskilled, for people to work in. And that is really the focus of what we need to do in industry policy in Australia as a whole and the Illawarra as part of that.