Illawarra Steelmaking Industry
Page: 12612
Urgent Motion
Mr MARKHAM (Wollongong—Parliamentary Secretary) [4.27 p.m.]: I move:
That this House:
(1) notes the importance of BHP to the Illawarra economy with its 12,000 workers;
(2) expresses concern about the proposed merger of BHP and British company Billiton;
(3) notes that steelmaking would be "spun off" as a separate entity and that BHP Billiton has only given an undertaking that there will be no job losses until next year;
(4) calls on BHP Billiton to immediately give job guarantees and make a long-term commitment on jobs; and
(5) supports steel and coal unions representing the workers and families of the Illawarra in their campaign to end outsourcing.
BHP Steel has been in the Illawarra region since 1935 after it took over Australia Iron and Steel. The 66-year partnership between BHP Steel and the region is now on tenterhooks after the announcement earlier this month that BHP and British-based Billiton would create a global mining company worth $57 billion. The front page of the Illawarra Mercury said it all: "For Sale: BHP Quits Steel". BHP announced on 19 March that steel would not be part of the new BHP Billiton. In effect, it was saying that it would sell off its steelmaking operations at Port Kembla. That puts at risk the pay packets of 12,000 Illawarra people working directly and indirectly for BHP Steel. There are 6,000 jobs at risk at the steelworks alone, 1,100 at coated steel, 1,400 in the four mines that BHP owns in the Illawarra, and 400 in the transport sector. So 8,800 jobs are directly affected by the decision. If one takes into account the 2,500 permanent on-site contractors at BHP, and the 700 off-site contractors, that amounts to 12,000 jobs—12,000 families left in doubt about their future.
The only undertaking so far from BHP is that there will be no job losses to next year—to next year! The new BHP steel company is to be spun out into a separate company to be known as BHP Steel. This effectively puts BHP steel up for sale. That means boots and all: the steel division and its assets, which includes the Port Kembla plant. BHP welcomed the news, saying that the new company would be full of optimism and excitement. The spun-out shares in the "new" BHP Steel will be offered to current investors before being listed on Australian Stock Exchange. Make no mistake, "spun-out" is simply a fancy name for selling off something that is no longer needed or wanted.
BHP has also admitted that it is considering all options, including—wait for it—a sale to another steel maker or a straight stock exchange float. It is little wonder that the unions are concerned for the viability of the Illawarra's biggest industry. That is why we should take this opportunity to put aside any plans for outsourcing. We need to focus on the long-term issue of job security. Last week I joined with five State and two Federal colleagues to call for an end to the outsourcing of 800 jobs at BHP Port Kembla. As most honourable members will know, Port Kembla Steelworks have been entrenched in an eight-month industrial dispute over plans to outsource maintenance and security jobs.
This is a critical time for the future of steelmaking in Australia. We must face up to it in an atmosphere free of confrontation and disputation. The relationship between management and the unions must be good. It is as simple as that, and the simple way to achieve it is to end outsourcing. Six State members and the two Federal members issued a joint press release. That is unique, I assure honourable members, but every one of us was concerned for the families of workers in the steel industry and associated industries. The press release, under the heading "Call on BHP to End Outsourcing Dispute" stated:
Enormous uncertainty has been created in the Illawarra community following BHP's decision to divest the Steel Division.
Steelworkers, their Unions and Management will face some very difficult challenges to ensure the industry is sustainable and continues to be one of the economic foundations of the regional economy.
It is time for BHP to call an end to their controversial outsourcing initiatives. BHP Port Kembla Management must review their position on this divisive issue and immediately resolve the current dispute with steel unions.
There is a strong desire in the community for a resolution to the outsourcing dispute. This is a crucial time for the industry and its future must be faced in an atmosphere free of confrontation and disputation.
The steel unions have publicly stated that all parties should be concentrating on the fundamental issues that the divestment decision has brought to the fore. We support this view.
It is signed "Stephen Martin, Colin Hollis, Ian McManus, David Campbell, Colin Markham, Marianne Saliba, Matt Brown and Wayne Smith". Some have speculated that the new company will be stripped bare. When one takes into consideration the fact that BHP has $3.5 billion in assets and annual sales of $5 billion, it makes a nice little package. That means job cuts, to make it more attractive to overseas investors. The question has been asked: Will the new BHP Steel be ripe for an overseas takeover? Once it is listed as a separate company on the Stock Exchange it will become an immediate target for an overseas takeover. On Wednesday of last week Graham Roberts, the National President of the Australian Workers, Union said:
It would be an absolute disaster if an overseas company bought out BHP Steel.
BHP produces only 1 per cent of the world's steel and, as one analyst put it, it could be a case of a minnow being swallowed by a whale. It would also impact adversely on the region. Since 1986 BHP has spent between $500,000 and $750,000 each and every day in capital investment in Port Kembla. Now on its own, BHP will have to find this money to keep itself internationally competitive. The company also uses or employs local small businesses. Honourable members should be in no doubt that this will create problems, because if BHP suffers, small business in the region will also suffer. The jobs of 1,400 coalminers are under threat. The new BHP may regard the region's mines as being of only marginal importance. The majority of coal mined from the four mines at Appin, West Cliff, Elouera and Tower is for BHP Steel. Some claim that the new company will be more interested in sourcing from open-cut style mines in Queensland.
What we hear from the work force—especially in regard to the outsourcing of 800 specialist jobs of tradespeople and security people who have had a long-term commitment and loyalty to BHP—is, "Why have we worked our guts out for so long when they are just going to toss us on the scrap heap?" Outsourcing is the big problem and they have to get that right. We have all got to work together to make BHP Steel work in the Illawarra because this country cannot afford not to have the capacity to manufacture steel, particularly in the Illawarra and in Wollongong. The motion I have moved today must receive the full support of this House so that we can send a strong message to BHP Steel and to the new corporation that we are not prepared to have jobs go down the gurgler in the Illawarra. In correspondence to local members who requested information Mike Archer said:
The positives that should provide us all with comfort:
- we have some of the best people in the industry;
- we enjoy a competitive advantage over most of the world's steel producers with our access to first class raw materials, including Illawarra coal;
- we have first class plant and equipment;
- we have strong brand names through the Coated Product's businesses and we have a solid core of marvellous customers in Australia and abroad who we believe will remain loyal to us while ever we continue to provide them with excellent products and service; they are the key to our future sustainability. No one should be doing anything that affects our customer's businesses adversely.
That is the very point. For the past eight months there has been a campaign of industrial disputation over outsourcing. The unions have made it clear they are not going to cop this. I assure honourable members that the workers, after hearing the announcement last week, do not know where they are going. BHP is not conversing with the work force in the way it should. BHP has said that it will spend millions of dollars in plant and equipment. I have no problem with that; I hope it does. However, I fear that the intention is to upgrade the plant to a standard where it will be regarded as a viable option to buy. If BHP is to sell off its steelmaking process in Wollongong, how does it propose to split it up? That is the question that needs to be answered by BHP.
Mr SOURIS (Upper Hunter—Leader of the National Party) [4.37 p.m.]: I move:
That the motion be amended by the addition of the following paragraphs:
(6) notes the failure of the Carr Government's outsourcing, privatisation and State development policy; and
(7) notes further the Government's failure to ensure the aluminium smelter project at Lithgow proceeded.
The reason the Opposition has sought to amend the motion to include those two paragraphs is to highlight the hypocrisy of the Carr Government. It is hypocritical of the Carr Government to talk about outsourcing when it is involved in outsourcing up to its eyeballs. The Carr Government wrote the manual on outsourcing. Ask the railway workers and the people in my electorate in the Hunter who thought they had jobs with the Government how they feel about the preparation for the coming privatisation of FreightCorp.
Mr Campbell: What about the workers in the Central West of New South Wales you sacked when you were in government? What about the Tallawarra power station workers that you sacked when you were in government?
Mr SOURIS: You will get your chance. You were looking like a pretty good member once upon a time, but you are not getting anywhere. The Carr Government was hypocritical in the way it dealt with the power generation industry, when it reduced employment by outsourcing in preparation for privatisation. That policy is alive and well and on the agenda. What about the Carr Government's involvement in reducing the level of employment in the electricity distribution industry in preparation for mergers, economic rationalism and potential privatisation?
Do not suggest that those plans are not still on the drawing board. I refer also to the Carr Government's non-existent State development policy for the Lithgow aluminium smelter, despite glamorous promises given during its election campaign. The Carr Government completely hoodwinked the electors of New South Wales, particularly those of the Bathurst electorate. It is incredible that the justification for this motion is based on outsourcing and the failure of the Carr Government to offer any government guarantee or job loss guarantee to the targets of its own economic rationalism and privatisation program.
I too express my concern for the families affected by this BHP-Billiton merger. I know many people in the Illawarra and Wollongong areas who are directly or indirectly involved in the steelmaking industry. I hope that steelmaking continues to be enhanced and increases its standing in order to find more export markets. Once upon a time that was the expected purpose of State development policy and government. I question the role that the Carr Government has played in assisting BHP's steelmaking in the Illawarra over its past six years in government. It has done absolutely nothing. What is the use of five or six State members and a couple of Federal members? Independence and balance are needed. State Labor members of that region have provided nothing but succour and support to a grossly militant union that has potentially destroyed more jobs in the Illawarra than that being referred to now.
The Carr Government has watched jobs go down the tube in the coal and steelmaking industries because of its blind pursuit of a left-wing militant union organisation. Labor believes in sticking firm to the brotherhood in the Illawarra in its eight-month fight against the bosses. I am sure that the people of the Illawarra are comforted to know that the five Labor members of Parliament are standing side by side singing the Internationale under a red banner. Will that save their jobs, stop the outsourcing, keep the coal industry going and ensure that the steel industry has a good future? What will it telegraph to the world and to potential markets? The signal will be that the Illawarra still believes in the revolution, in overthrowing the management bosses, and in the workers' co-operative. It signals a belief in the old days, which has helped to destroy the industry that Labor pretends to support. Those Labor members are fakes, they have failed in their mission and do not deserve to represent their electors. They have done nothing about the Carr Government's outsourcing policy.
Those members may intend to try to stop the privatisation of FreightCorp but they do not have the clout; they do not have two bob's worth of influence in the Carr Government. The Carr Government's blind pursuit of the ideology of economic rationalism is alive and well; it is being given support and succour by the five Labor members in the Illawarra. They have the hide to say they care, that they have been working hard in the past six years, standing alongside the militancy and blindness of the union movement. With the blind pursuit of economic rationalism by the Carr Government and the blind pursuit of the international Labor movement by the Left, Labor believes it will bring salvation to industries in the Illawarra. The points I have made indicate the failure of the Carr Government to provide a climate conducive to investment, employment, growth, prosperity and job security. These five Labor members have failed the tests of government and leadership. They have failed to properly represent their electorates and stand condemned.
Mr CAMPBELL (Keira) [4.46 p.m.]: I support the motion as originally moved by the honourable member for Wollongong. Although I could spend considerable time demolishing the comments of the previous speaker, I would like to remind him of a former Minister in the Greiner Government named Neil Pickard—they panic at the sound of his name—who closed coalmines and the Tallawarra power station. The Leader of the National Party should talk to the families of the Illawarra about that. To outline the Carr Government's support for industry in the Illawarra we should look at the joint approach by State members from the Illawarra, the unions, coal company managements and the Port Kembla coal terminal and at the way they have worked together on a number of occasions to put together a package to stabilise the coal industry and to stabilise the coal terminal as a business. This has been achieved through co-operation and working together.
The outsourcing dispute has lasted eight months and now the farcical situation has been reached in which the Industrial Relations Commission has directed the company not to send emails, write letters or talk to staff or unions. That is the ideological bent of the present BHP management. It does not talk sense or understand the importance of working together. The outsourcing dispute arises because BHP does not want to run steel but wants to become an international player in resources. It wants to sell the steelworks in Port Kembla. BHP-Billiton wants to become involved in minerals, not steelmaking. I have said in the media and during discussion that if the spin-off is done properly, if it is not a trade sale but is a proper float that is handled sensibly with open and honest communication with employees, in the long term the steel industry in Port Kembla and the Illawarra regional economy will be better served by a company that wants to run a steel business rather than by BHP, which does not. I note that the shadow Treasurer was in the region about 10 days ago trying to talk up manufacturing. I expect his contribution will be about how employers and employees can work together.
Wollongong will benefit in the long run if a dedicated steel company is prepared to make steel there. However, that has to be done sensitively. Following the announcement by BHP, the employees and their families, the contractors and their families, the small businesses that rely on the industry and their families, are concerned about their future. Paul Anderson and Don Argus have made contradictory comments, which add confusion to their concern. However, there are some positives in announcements by BHP about capital expenditure in the region.
Yesterday BHP committed to invest $94 million in the sinter plant emissions project, something that does not add to production but is an environmental program. The test of BHP's commitment to the steel industry, to the Illawarra, to the State, and to Australia, will be the way in which it maintains that capital investment and capital expenditure as it goes through the process. It will be difficult for our region and difficult for individuals to cope with that process. BHP needs to be open, honest and sincere with people rather than giving a direction to its employees not to talk. In the long run if the steel industry is operated by a dedicated steel business in our region we will have a stronger future. I send a challenge to those setting up that company that it needs to demonstrate confidence and it must ensure that its corporate headquarters—lock, stock and barrel, including the managing director's desk and the boardroom table—is located in Port Kembla. [Time expired.]
Mr O'DOHERTY (Hornsby) [4.51 p.m.]: I thank the honourable member for Keira for mentioning that recently I was in the Illawarra for discussions with industry representatives. The day had a positive result, because we talked about the great capacity within Wollongong and the wider Illawarra area to attract internationally competitive manufacturing and the industry's capacity to attract export dollars. That is the future of the region. I said to the media representatives outside the civic centre that the necessity is to get new technology to work with existing expertise that has built up over the years in Wollongong. That expertise has been built up because it has been working with the internationally competitive BHP steel division.
There is no question about it. We agree that steel and the future of that region are integrally connected. However, we disagree because members opposite are confused about how to achieve those things. Industry representatives in the Illawarra told us that they have not seen the benefit to their manufacturing operations of the so-called Illawarra Fund. Apparently $10 million has been spent by the Government, but they have not seen the benefit of that.
Mr Markham: They have.
Mr O'DOHERTY: No, they have not. They sat across the table from me and told me that when they sought funding to go to a trade fair in Melbourne to promote the capacity of the industry in Wollongong—and its flexibility, cost effectiveness and international expertise—they could not get money from the Illawarra Fund. They were told to go away and come back next year. They are now planning to attend with funding from the Australian industry group and its representatives. There has been some expenditure, but it was associated with tourism. We do not quibble with that, because it is as important to promote tourism in the Illawarra as it is in other parts of New South Wales.
If the Carr Government thinks that tourism alone will save the Illawarra, it is letting that region down badly. I admit that there is another prong to their strategy, and that is the call centres. When the Carr Government thinks about technology in country areas it thinks about call centres. The two prongs of the Carr Government's approach to saving the Illawarra are tourism and call centres. However, that approach does nothing to build the expertise of the region or to integrate the sale of the industry's capacity in the Illawarra, both in Australia and internationally.
We needed trade missions, jointly funded by industry and the Government. Industry will come to the party with a contribution if the Government promotes overseas trade missions to sell the expertise of the area. The honourable member for Keira said that if the new player comes in to run steel in Port Kembla, and was committed to the steel industry, that would be good for the Illawarra. We all agree that the future of steel and the future of the Illawarra are linked, because their pasts are linked. There is no doubt about that. The support required by companies that are available for contracting out, exporting, and so on, is linked to the presence of a large international steel player in the area. We do not disagree with that. On the other hand, the Labor Party said that it is committed to stopping contracting out. I could not work out whether the Government is more concerned about the potential sale of the steel division or about contracting out.
Mr Markham: It is one and the same.
Mr O'DOHERTY: The honourable member for Wollongong says that it is one and the same, but what is he doing? He is talking down the price and the capacity for someone else to come in and buy the steel division, because the Government wants to lumber it with work practices from two centuries ago. The Government wants to encumber industry with old industrial relations practices, yet it wants some internationally competitive player to come in and invest money in the region. It cannot have it both ways. The contributions by the two Government members were short on references to commitment by the Carr Government to the issues that they raised.
The two questions raised by the honourable member for Wollongong were: What is the Carr Government doing about it and what would Kim Beazley do about it? It is all very well for the five members of that region to get together and issue a press release, but what is Kim Beazley's proposal? Does he have one? No, he has not. I add this final question: What has the honourable member for Wollongong said to his Premier about support for the Newcastle steelmaking operation, Austeel, which is supposed to create 20,000 jobs—jobs which it obviously would take out of the Illawarra? [Time expired.]
Mr McMANUS (Heathcote—Parliamentary Secretary) [4.56 p.m.]: Honesty, sincerity, discussion, negotiation—that is what this is all about. This is not about economic rationalism; it is not about what the Labor Party or the Liberal Party is doing; it is about a company in the Illawarra which, for the past 20 years, has not negotiated with its staff or with its community. This is about a greedy company which has continually drained the Illawarra of profits and at the same time torn apart the union movement in the Illawarra and the community. I hark back to the mid-1980s and to the sincerity of BHP.
Mr O'Doherty: It is really about people like you.
Mr McMANUS: I am not a crazy left-winger. In the Illawarra 10,000 people lost employment simply because BHP decided to downsize. In the Newcastle area, 6,000 people lost their jobs for the same reason. Was there any negotiation, was there any sincerity, was there any honesty in what they did? BHP decided that it would not communicate. Today this is all about the union movement, the local members and the Illawarra community. In particular this is about the community. People have families and mortgages and they want a future in the Illawarra.
The so-called Big Australian is creating discourse and discomfort in the community and it has a responsibility to ensure that the community is appeased. It has a responsibility to make sure that the workers' representatives—the unions in this country—are appeased. Over the past 20 years we have seen the union movement negotiate its way through the processes, particularly strong militant unions such as that which works with BHP. The Illawarra has a very viable, environmentally sensitive steelmaking process. I am sure that until its closure Newcastle had the same. Essentially we are asking that BHP not merge with its counterpart in Britain. We are asking for the right to be able to say to our people that their jobs, their homes and their future will be secure.
With outsourcing that will not happen. There is no security because BHP will not give any guarantee of security. It is a time of uncertainty when the community, the union movement and staff are unable to discuss issues with management. BHP can resolve this problem simply. It can end outsourcing and make a long-term commitment to the steelworkers of the Illawarra region. BHP can indicate that it has a future in the Illawarra and that it is prepared to spend $94 million on a sinter plant which, as the honourable member for Keira said, is an environmental issue. For once BHP should show some spirit and guts. BHP should talk to the community, the union movement and its staff and tell them that it has a commitment to steelmaking in the Illawarra and in this country.
BHP should be prepared to say that it will not outsource and that it will ensure the positions of its staff for the long-term future, not for 12 months. It is a joke that a company the size of BHP tells its staff that they may have jobs for 12 months. That is an insult to a community that has worked for BHP to create the annual profits it relishes. The figures show record profits in steelmaking for BHP. Yet it does not have the intestinal fortitude to give a commitment to its staff and to the people of the Illawarra region. It is time for BHP to say that there will be no outsourcing. Give us jobs, give us credibility and give us fair play.
Mr MARKHAM (Wollongong—Parliamentary Secretary) [5.01 p.m.], in reply: Opposition members who spoke about the trade union movement in the Illawarra are totally out of touch with the steel industry plant and the number of days lost through industrial disputation over the past eight years. Lost days are not even recorded now because the figure is so low. Last Tuesday, after I learnt about the merger, I rang BHP to arrange a meeting between the State and Federal local members and BHP management to talk through all the issues, not only the outsourcing issue. BHP management said it would not talk to us about outsourcing because the New South Wales Industrial Relations Commission [IRC] had told it not to. I told Lance Hockridge that the IRC does not gag me. I have been talking about it and I will continue to talk about it because it affects people I know. They are concerned about the future of not only their jobs but also their families. If Opposition members are not concerned and do not believe that we should come out and fight, they are on the wrong track.
Lance Hockridge gave us a good hearing for 1½ hours. We went through all the issues. As he was not able to elaborate on outsourcing because of the gag, we discussed the future of BHP steelworks in Wollongong. We had a good discussion and BHP management outlined a number of points which provided some light at the end of the tunnel for the survival of the steelworks in Wollongong. As I said to BHP management, many people will view the upgrades as a move towards making the plant more viable for selling off. The unions in this country at various levels have indicated that they will not cop steelmaking leaving this country, and no-one in this House should either. We have to do everything we can to make sure it stays here. The Opposition's Federal colleagues should be doing something as well. I have not heard one word from little Johnnie Howard on this issue.
Mr Souris: I have not heard from Kim Beazley.
Mr MARKHAM: Have a look at the Illawarra Mercury. The Opposition said that BHP has never received any assistance. As the honourable member for Keira alluded to, BHP is the principal consortium owner of the coal loader at Port Kembla. That consortium has had various discussions with Treasury and the Premier's Department and the Government has bailed it out three times in the last five years to try to keep the coal loader viable. The consortium wanted to run it privately but all of a sudden it asked the Government for money. On three occasions, after getting money from the State Labor Government, the consortium turned around and made adverse announcements. I remember four years ago, three or four days after the Government agreed to provide money for the coal loader, Tahmoor colliery management sacked 69 miners. That was its commitment!
Recently the same thing happened again when the ink was hardly dry on an agreement between the Government and the consortium—the principal owner being BHP. The workers took a package. As part of that package a considerable number of jobs went to save the jobs of others. The consortium that runs that coal loader, of which BHP is the principal, has not delivered in the Illawarra. We want BHP Steel to do everything it can to make sure it stays in the Illawarra and in Wollongong. It provides an economic benefit to my town, to this State and to Australia. The workers and their families are now suffering. If the Illawarra loses BHP Steel, each and every one of us in this country will know exactly what that feels like.
Question—That the amendment be agreed to—put.
The House divided.
Ayes, 36
Mr Armstrong
Mr Barr
Mr Brogden
Mrs Chikarovski
Mr Collins
Mr Debnam
Mr George
Mr Glachan
Mr Hartcher
Mr Hazzard
Ms Hodgkinson
Mr Humpherson
Dr Kernohan | Mr Kerr
Mr Maguire
Mr McGrane
Mr Merton
Mr O'Doherty
Mr O'Farrell
Mr Oakeshott
Mr D. L. Page
Mr Piccoli
Mr Richardson
Mr Rozzoli
Ms Seaton
Mrs Skinner | Mr Slack-Smith
Mr Souris
Mr Stoner
Mr Tink
Mr Torbay
Mr J. H. Turner
Mr R. W. Turner
Mr Webb
Tellers,
Mr Fraser
Mr R. H. L. Smith |
Noes, 49
Ms Allan
Mr Amery
Ms Andrews
Mr Aquilina
Mr Ashton
Mr Bartlett
Ms Beamer
Mr Brown
Miss Burton
Mr Campbell
Mr Collier
Mr Crittenden
Mr Debus
Mr Face
Mr Gaudry
Mr Gibson
Mr Greene | Mrs Grusovin
Ms Harrison
Mr Hickey
Mr Iemma
Mr Knowles
Mrs Lo Po'
Mr Lynch
Mr Markham
Mr Martin
Mr McManus
Ms Meagher
Ms Megarrity
Mr Mills
Mr Moss
Mr Nagle
Mr Newell
Ms Nori | Mr Orkopoulos
Mr E. T. Page
Mr Price
Dr Refshauge
Ms Saliba
Mr Scully
Mr W. D. Smith
Mr Tripodi
Mr Watkins
Mr West
Mr Whelan
Mr Woods
Mr Yeadon
Tellers,
Mr Anderson
Mr Thompson |
Question resolved in the negative.
Amendment negatived.
Motion agreed to.
Pursuant to sessional orders business interrupted.