Topics: Visit to BlueScope steel, naval shipbuilding program, anti-dumping, Arrium
Look I'm really delighted to be here at the BlueScope facility with Mark and the team.
This is a great Australian story of innovation in action and of a business turnaround and it's a turnaround that came about because the workers and the management, the union and the company, all of the people who are from this plant and the Hastings plant which is only three kilometres from my own office and other facilities around the country got together and they said we need to be a world-class competitive business.
They innovated, they took the steps, the made the changes and we've seen the turnaround from a $300 million loss to a $310 million profit. What a great Australian story. So I am very optimistic about the future of BlueScope.
At a national level, we're taking steps through anti-dumping to protect against unfair steps, what we want is a level playing field for Australian industry and only in the last two weeks the Assistant Minister Craig Laundy made a significant decision in relation to ensuring that there was a step to prevent unfair dumping in the Australian industry, that's on top of significant reforms we've made with anti-dumping at the international level.
The Prime Minister recently went to the G20 meeting in China and helped form a plan to deal with excess capacity in the international steel trade. That's only good news for Australian jobs so this firm has made a dramatic turnaround.
At the national level, we're taking steps to ensure that there's a level playing field, at the international level we're taking steps to ensure that there's a level playing field and then through the Australian defence industry program, there's almost $90 billion of opportunities for Australian steel through the shipbuilding program.
Labor never commissioned an Australian built ship.
We have commissioned over 50 Australian build ships and submarines with enormous opportunities for BlueScope and for the Australian steel industry so there have been great challenges but this plan, this firm is an example of innovation in action, innovation is sure about new firms but it's especially about great Australian firms of longstanding history such as BlueScope and what we also see in Dulux and other firms so well done to everybody, I am deeply optimistic about the long term future of the Australian steel industry so long as it continues to be competitive and this is an example of world-class competition in action.
So how much steel exactly is going from this plant into the Australian commissioned naval ships?
So obviously the contracts are still to be struck but we have made the commitment that the 19 pacific patrol boats, which will be built in Western Australia will be done with Australian steel and I know from talking with Mark that he believes that BlueScope is the best placed firm of any, anywhere in the world to provide that steel.
So there are enormous opportunities, there will be a competitive process but my belief, my expectation is that the Australian steel industry will be a big winner and will be underpinned in a very significant way by the naval building process.
So the supply contracts aren't locked in yet?
Well we've already made the commitment that the patrol boats will be built with Australian steel, the others are further down the track so those contracts haven't been let but our expectation is that these boats will be built overwhelmingly with Australian steel.
This is the first visit for almost a year from a federal minister or the Prime Minister to the steelworks which has caused a lot of friction within the community feeling neglected. Is there a reason why you've come now when no one came for the last 12 months?
Well this is my third visit to an Australian steel plant in only eight weeks in the job so I've been in the job eight weeks so I've visited the Hastings steel plant, a BlueScope plant within my own electorate, I've visited the Arrium plant at Whyalla and I've visited obviously the steelworks here in the Illawarra.
So I set out to visit the three major plants within the first two months in the role and we've achieved that, so it's not the visit though that is the key thing, it's the message of genuine support and optimism for the Australian steel industry.
The only way in a competitive world that our businesses can thrive and be successful is if they innovate and they're world-class competitive in their own right.
I've got to say that I think Zincalume Colorbond are without doubt the best coated steel products in the world and that comes down to the ingenuity of the workers, the genius of the process and the foresight of the firm.
You said BlueScope would have a place as long as it remains competitive, do you see that competition being entirely on BlueScope's shoulders or does the Government have a role to play in the system now?
We do have a role absolutely no question about that that's why we want to have a more competitive tax environment, we have an enterprise tax plan which is about ensuring that our taxation arrangements are more in line with global taxation arrangements, why we're putting in place an approach in terms of anti-dumping which is reforming that system, which has made real decisions, and why we're looking at an international approach to oversupply in the steel sector and on top of that you add the naval shipbuilding program, an $89 billion program that's an incredible opportunity for Australian steel.
What about financial assistance, you're providing $50 million to Arrium, is that going to be enough to keep it afloat?
Well I think the point with Arrium is we have already delivered a $49.2 million loan, within three days of coming into the job, I was really thrilled to be able to complete that process so during the election campaign we made the commitment for a loan to Arrium to complete the beneficiation or the improvement plan for their iron ore product.
That should deliver about $200 million of cash flow improvement over the coming five years and so that's an enormous step forward immediately.
We've also said that EFIC and the Clean Energy Finance Corporation would be made available to deal with any new purchases but the time to do that is with purchases.
I've got to say that Bill Shorten's throw away of $100 million today would simply line the pockets of the big banks, it wouldn't help the workers. It was the worst possible intervention at the worst possible time at the moment that a sale is being contemplated.
And Bill Shorten is lining the pockets of the big banks, rather than helping the workers. The time for any further action is after a sale so you are directly assisting the workers.
And in terms of that assistance, is the Export Finance Insurance Corporation the best mechanism to provide it?
Well, we've provided a letter of support to the administrators and that sets out two options, one is the Clean Energy Finance Corporation for any action taken to improve their energy efficiency or their energy production and then secondly, there's the Export Finance Insurance Corporation.
There's a great model nearby, across the Spencer Gulf on the eastern side in Port Pirie. We worked with the South Australian Government to support Nyrstar. So, Nystar is turning their lead plant into a multi-metals recycling and recovery plant.
Through the Export Finance and Insurance Corporation, we were able to assist with a very significant loan underpinned by the South Australian Government. That has seen a half a billion dollar investment which is leading to a dramatic turnaround in that business.
That same model is equally appropriate for across the Spencer Gulf on the western side in Whyalla and the right time to deliver the next phase is after a sale, whereas the Shorten plan simply lines the pockets of the big banks. It won't help the workers. By contrast we'll help the workers.
We've already provided the contract for the Adelaide to Tarcoola rail line which is seeing steel leaving that plant right now and we provided the $49 million which will see an upgrade in the quality of iron ore and a $200 million cash flow improvement.
Minister, there have been some criticism of the Government's anti-dumping measures and the fact that some people say it doesn't go far enough. Will the Government be looking to further tighten those and make it harder for your Asian suppliers, to really undercut Australian steelmakers?
So our job is to provide a level playing field for Australian steel. We've made significant changes but we are ready to take further steps to ensure that our anti-dumping regime can respond quickly, that it is world's best, to ensure that Australian firms have a level playing field.
So I can't ask about wind turbines?
You can ask whatever you want.
As a former environment minister, you must be hoping to see more still going in to wind turbines. There's a lot of steel currently going into it.
Well, we've put in place a renewable energy target which is going to see all up about 6000 megawatts of new renewable energy. That's about $12 billion of investment. A significant proportion of that is likely to come from steel.
I know talking to Mark today that there's a significant opportunity for BlueScope and in particular for here in the Illawarra coming from the Renewable Energy Target.
What we've seen is that Labor put in place a phantom credit scheme where they gave away money for renewable energy that was never created. That crashed the sector.
We've stabilised it, we're seeing a $12 billion investment in Australian renewables and much of that will come in the form of Australian steel.
Again, what we're doing with anti-dumping, what we're doing on the international front, what we're doing with the ship building program and what we're doing with the Renewable Energy Target, these things together all underpin the future for Australian steel and at the end of the day, I've got to say, I am deeply impressed by the partnership here in the Illawarra and I'm deeply, deeply impressed by just the sheer innovation in action of the workforce, the management, the firm and everybody involved, so thank you very much.