Radio National Breakfast with Fran Kelly

E&OE TRANSCRIPT
Interview on Radio National Breakfast with Fran Kelly
06/04/2016

Subjects: Potential closure of Arrium steelworks in Whyalla, the ABCC

Fran Kelly: The troubled miner and steel maker Arrium, struggling under heavy debt, remains under the threat of voluntary administration, with hundreds, if not thousands of jobs in the balance. Hundreds of people marched through the South Australian steel town of Whyalla yesterday, highlighting the perilous state of the steel industry and the possible job implications. Yesterday the Australian Workers Union representative for Whyalla, Scott McDine told us here on RN Breakfast that he wants the Federal Government to step up and provide more support to the ailing steel industry.

[Excerpt]

Scott McDine: They don’t actually prop up any industry and they don’t actually engage. They don’t have a procurement plan; they don’t have an industry plan. They don’t – they have China dumping onto our market, leave steel makers around the word are all struggling to cope with the soft demand from China and surplus production, which is also driven by China. We need to do what other countries do around the world and act in our national interest.

[End of excerpt]

Fran Kelly: That’s the AWU representative for Whyalla, Scott McDine speaking on RN Breakfast yesterday. Well the Minister for Industry, Innovation and Science, Christopher Pyne says the Federal Government is pulling many levers to try and support Arrium and the Australian steel industry. Minister, welcome back to Breakfast.

Christopher Pyne: Good morning Fran, it's nice to be back.

Fran Kelly: Minister, if Arrium falls over, more than a thousand jobs will be lost in Whyalla, and people fear up to 4000 jobs indirectly lost in the flow-on effect, which would be catastrophic for Whyalla, wouldn't it?

Christopher Pyne: Absolutely, and that's why we're working tirelessly with the banks, with Arrium, even with the State Government here in South Australia to stop that from happening, and the AMWU representative on your program yesterday was not only unfair, he was also extremely misleading about the role of the Federal Government. Because since I've been Industry Minister, I have toughened up our stance on anti-dumping; in fact I introduced new fines on Chinese, Malaysian and Taiwanese steel makers only in the last month for circumvention of the anti-dumping rules, established an inquiry into Chinese steel which will report to me very soon, and I've moved our position on anti-dumping from what's been regarded internationally as a very relaxed and supported free trade agreement position to a fair trade and free trade position.

More importantly, Malcolm Turnbull and I announced a month ago that we would bring forward the purchase of 72,000 tonnes of steel for the Tarcoola Adelaide rail line, which is worth $80 million to Arrium, which is a massive shot in the arm for that business. So the idea that we've been standing by and doing nothing is utterly false. In fact, the South Australian Government, who've been working with us, they are the ones who are yet to announce what they will do in terms of a financial package for Arrium, although I'm sure they will do something, and I want to congratulate them for their role. But the idea that the Federal Government's been doing nothing while the State Government's been doing things to support Arrium is completely false.

Fran Kelly: Can we talk about procurement policies? Because I remember in the Gillard Government there was a major conversation, talk about industry plan and procurement policies, and you've just told us the Turnbull Government has committed to buying 72,000 tonnes I think you said of steel from Whyalla for that rail line. But according the union, less than 50 cents in taxpayer dollars spent on steel went to Australian steel producers over recent years. With all the infrastructure being planned and built, do you plan to change the policy so we do better than this? Is that on the books?

Christopher Pyne: Well the Commonwealth Government does have an industry procurement policy for Australia, including the steel industry and the aluminium industry and every other kind of industry, but ...

Fran Kelly: Is it better than 50 cents on the taxpayer dollar?

Christopher Pyne: Well of course it is, but the problem is that the Government gives its money to the states to construct things like road and rail and railings on roads and ports et cetera, because we are actually the people who have the bulldozers and the pickers and all the other things that are needed for construction. We give our money to the states and territories to do projects, which we agree with them, then they make the decisions, because obviously they're sovereign governments. Now the South Australian and Victorian Government have moved to a much better position on government procurement, but you still need to have competition in the market, because there is only one steel construction business in Australia that makes construction steel, that's Whyalla. There's one that makes flat steel, that's Port Kembla. If you say that 100 per cent of all construction must be from those two businesses, then you've effectively created a monopoly, and the taxpayer can be charged any price by those businesses for that steel. So that would obviously be quite irresponsible.

Fran Kelly: Yeah, sure, but you want to have some lever in there to make sure that as much as possible ...

Christopher Pyne: [Talks over] And there is.

Fran Kelly: ... so that you keep the pressure on the industry to be competitive, and I guess you've got global prices to compare them to, but you know, that's the - that's going to be the most practical and more straightforward and immediate way of changing the finances, isn't it? To buy more of their steel.

Christopher Pyne: Well most- absolutely, the states and territories should definitely do that, and while I'm using the lever that I've got, things like the anti-dumping rules, so I'm requiring that Chinese, Malaysian, Taiwanese, South Korean steel not injure local businesses through unfair competition. And I have been making the decisions that will impose extra duties on those businesses that have been trying to do that. And this is a worldwide problem, Fran, because China has been massively oversupplying the industry and we, I believe, China will get that massive oversupply under control in the years ahead and so that’s why Malcolm spent the weekend, Malcolm Turnbull spent the weekend talking to the banks to make sure that they didn’t act precipitately against Arrium because Arrium, obviously the problem with Arrium is nothing to do with federal or state government procurement decisions, it’s that they have $2 billion of debt that the management have got themselves into.

Fran Kelly: Of course. It’s 17 to 8, our guest is the Federal Industry Minister Christopher Pyne, Minister there’s a few issues to get through, another one close to your heart, the future of the submarines program; you said this week it’s very like an announcement will be made on who builds these 12 subs before the election. Can you confirm that voters in South Australia will know before the election who will build the 12 submarines and where they will be built?

Christopher Pyne: Well, Fran, obviously for South Australia but also for Australia, this is a $50 billion contract to award the 12 submarines. We have committed to the 12 submarines of course and the Defence White Paper which is a very important step and as a South Australian I’ve been working very hard which is why I delivered this Centre for Defence Industry Capability to South Australia as part of the Defence White Paper.

Fran Kelly: Sure but people have been waiting a long time for this announcement and there’s talk this morning it will be a two part announcement, there will be a pledge before the election to build the subs locally, but the international partner will not be named until after the poll. Is that what the Government’s working towards and is that good enough?

Christopher Pyne: Well, Fran, obviously when the election was going to be likely in September, then there was plenty of time for the competitive evaluation process to be completed, if the Senate continues to block the Australian Building and Construction Commission and the Registered Organisations Commissions bills and we’re going to give them a chance to pass those on 18 April, then there could well be a double dissolution in July. That makes the timeframe much shorter, that’s a practical consideration but I am confident and Marise Payne and Malcolm, Defence are all working as hard as they can to get this decision done in as short a timeframe as possible. No one is wasting their- no one is wasting any time and I believe that we will get a great announcement for Australian industry and for defence capability as soon as possible.

Fran Kelly: Do you understand and do you believe that if all the Government can do because of the timing before the election is to make a promise to build the subs in South Australia without saying who’s won the tender, why- you’d have problems with people believing you because the Tony Abbott made the same commitment before the last election and then the Abbott Government walked away form it, why would voters trust you?

Christopher Pyne: Well I’m not going to be drawn into the weeds on the issue of parsing the decision but I mean the important thing for Australia and South Australians is that there is a local ship build and the second thing that’s important is who does the ship build so the decision to be made at the appropriate time and announced by the Prime Minister and the Defence Minister at the appropriate time but it’s hard for me because I’m on the National Security Committee to be drawn too far into the weeds publicly on those kinds of matters.

Fran Kelly: It’s hard for you because of course you’re the senior South Australian Government Minister too.

Christopher Pyne: It is tricky, it is tricky.

Fran Kelly: Minister you are also Leader of the House, will the House of Reps sit for the full three weeks when the special sitting kicks in as you reminded us on 18 April?

Christopher Pyne: Well we’re sitting on 3 May- 2 May I should say for the Budget that’s been brought forward a week. We’ve passed in the House of Representatives the Australian Building and Construction Commission bills and the Registered Organisations Commission bills so the action on those two bills is in the Senate. I don’t think we’ve made a decision yet about how many days the House of Representatives needs to sit, obviously we will now introduce on 18 April that- a bill to change the Road Safety Remuneration Tribunal decision to put it off until 1 January because owner-drivers of trucks are being destroyed by the trade, the Transport Workers Union, Labor Party’s policies on that. That’s something we need to do that week.

Fran Kelly: But I would have thought there was no shortage of work for the House of Reps to do, if you’re going to go to the cost of bringing everybody back, wouldn’t you sit everyday? Why wouldn’t you?

Christopher Pyne: Well, look that’s a decision…

Fran Kelly: Except for the perception you’re running for cover.

Christopher Pyne: Well look absolute rubbish, Fran, the purpose of the- that decision’s something that we will make over the course of the next few days I assume, but the House of Representatives doesn’t always sit when the Senate sits, the Senate doesn’t always sit when the House of Representatives sits and never has been the case and the purpose of this Parliament, bringing them all back…

Fran Kelly: But you’re bringing them all back this time.

Christopher Pyne: Yes but the Parliament is being brought back because the Senate will not pass the Australian Building and Construction Commission bill and the Registered Organisations Commissions bills to clean up the building and construction industry. The House of Representatives has done that job, we’ve passed it. So it’s the Senate that are failing to see the need to build up- to reform building and construction in Australia, not the House of Representatives.

Fran Kelly: Christopher Pyne thank you very much for joining us.

Christopher Pyne: It’s a pleasure thanks Fran.

Fran Kelly: Christopher Pyne is the Federal Minister for Industry, Innovation and Science. It’s 12 minutes to 8 on Breakfast.

[ends]