Ministers for the Department of Industry, Science,
Energy and Resources

18 February 2014

Subject: Alcoa, industry investment

E&OE

JOURNALIST: Minister, thanks for your time. What is the government going to do to help these 980 affected workers?

IAN MACFARLANE: Well David, the first thing I need to say is that obviously the government is very mindful of the impact that this decision has had in Geelong. It’s a decision, which was to a degree expected and comes on the back of recognition two years ago that the smelter was struggling to be competitive.

The carbon tax hasn’t helped that, but rather than dwell on that, can I just say that while our hearts do go out to the people of Geelong and particularly the workers in the smelter, that we are working towards, and have been for some time, a package to assist the transition of industry in Victoria. I have already had a preliminary discussion with the Prime Minister and I’ve been talking to Sarah Henderson MP in terms of what’s needed in the area this morning.

We will be considering the expansion of our Victorian panel, which is looking at the impact particularly of the changes in the auto industry down there, but now with this on top of that. We will also be looking at whether or not there is enough money available in that fund and whether or not we need to do something particularly for the Geelong community in the region.

JOURNALIST: So we could be seeing an enhanced assistance package, given today’s announcement, then the one you were contemplating, even just last week?

IAN MACFARLANE: Well that’s correct. I mean what we really need to do is get an assessment. I’m at the moment trying to arrange to meet with the Mayor of Geelong tomorrow afternoon. I’m currently in Queensland but I’m flying to Melbourne tonight. I’m hoping that we will be able to touch base and if we can’t have that face to face meeting I will be speaking with him on the phone, but it would be better if we could just sit down and basically work this issue through.

Look, this is part of the change that is going on in industry in Australia. We’ve seen this coming for some time. We saw a previous government who ran around, throwing cash at issues, applying band-aids which are now falling off, and we need to have a measured, strategic approach to the transition that has got to go on, not only in Victoria but also in South Australia. In fact, it is going on to a degree everywhere in Australia. Let’s remember that around 350,000 people a year on average are made redundant in industry. We need to enhance the transition that those people are already making plus the added jobs that are being lost in the auto industry and Alcoa, to move industry forward in Australia.

JOURNALIST: But for a town like Geelong, Ford is going to close down in a couple of years, Alcoa is now going to close down this year. The Shell refinery is up for sale as well. The impact on a town like Geelong is quite significant. What can government do to help a town in that situation?

IAN MACFARLANE: Well no-one denies the impact on Geelong and we were very mindful of it when the panel met in Melbourne just three or four weeks ago and we did take submissions from businesses in Geelong about how they may be able to expand. As I say, we’re prepared to look at that, we’re prepared to look at the money that may be left over after the round of funding that we’ll soon announce in relation to the Ford fund that was established. So we are looking at how we can progress business in Geelong but we need to make sure those businesses are long term businesses.

So there is some work to be done, we acknowledge that. Fortunately, some of that work is already being done and so we do have a bit of a head start on this issue. But there is no doubt that Geelong is the epicentre at the moment, of the transition that’s going on in industry in Australia. We’re mindful of that and we will be looking at ways we can establish new industries, or expand existing industries that are already in that area. Also of course, will look at how we can improve infrastructure in the region to open up opportunities in the to and fro of commuting and the transport of freight and componentry between Geelong and Melbourne.

So all of those options are on the table, we’ll work through them and my priority at the moment is to look at whether or not we need to add a person to the panel which is already looking at these issues and whether the Mayor and his council are able to add some extra insight into what we should be doing. All those options are in train and I can assure the people of Geelong that the Commonwealth Government, our Tony Abbott government, is very focused on the issues that are occurring in Geelong, not only today, but that have been coming for some time.

JOURNALIST: Looking at the causes of this, you did mention at the outset the carbon tax, and you know you may be right, this has put pressure on Alcoa, but they have closed obviously with the knowledge that the carbon tax is likely to be gone after July. So was it really a big factor here?

IAN MACFARLANE: Well, the biggest component in making aluminium is electricity and the carbon tax has a huge impact in that regard. But look, everyone accepts there are a range of issues in terms of Australian competitiveness. Obviously the dollar is into play in this matter. What we need to do is find out how we can keep those industries that we’ve got viable.

We saw a very interesting example of that in the media this morning. Bell Bay, again an aluminium smelter that has moved to a new workplace arrangement to ensure that job security is maintained. We really need to look at all the aspects. No-one can rule out the carbon tax but the reality is that this decision has been made for a range of reasons; lets now get on with … (interrupted)

JOURNALIST: What about workplace conditions, were they a factor at all?

IAN MACFARLANE:  Well look, that’s up for the company to say but if you look at what other smelters in other parts of Australia have done to move away from the rigidity of some workplace agreements, where workers at Bell Bay have basically said, job security is far more important to us than a dollar here or an award condition there, and that refinery, which is just as old as this one, is going to continue to operate.

JOURNALIST: All right, Industry Minister Ian Macfarlane we will have to leave it there, thanks for joining us.

IAN MACFARLANE: Thanks David.

Media contacts: Mr Macfarlane's office 02 6277 7070