Topics: $49 million loan to Arrium, energy prices, Labor’s plan to bring back an electricity tax
I'm delighted to be here in Port Pirie with Rowan Ramsey, Member for Grey, who was the architect and the author of the Upper Spencer Gulf $20 million jobs and investment program.
In addition to that, no person in Australia drove harder for the $49 million Commonwealth loan to assist with the beneficiation plant for Arrium.
The reason we're here is firstly to address the conference about the Upper Spencer Gulf but also the need for microeconomic reform to help Australia continue the more than 25 years of economic growth which sets us apart uniquely in the developed world.
In addition to that, we visited Nyrstar this morning to see an example of a world class firm with world class investment right here in Port Pirie, the Spencer Gulf and South Australia.
This is a tremendous vote of confidence in the future of the region.
We're also visiting Whyalla and the Arrium steel plant to meet with the management, to meet with the unions and the workers, and to meet with the Mayor and many of the business leaders.
And Arrium can be successful, but there has to be a partnership between the workers and the management – in the way Nyrstar provides that example right here in Port Pirie.
There has to be cooperation with the State, and to give a compliment to the state, we are working well with them.
And obviously the Commonwealth is providing the loan and we will look at what other proposals come out of the current process that the administrators have.
Yeah, I'd just welcome Greg here, but I think it very important, this conference in itself, it is possibly the most important regional conference when it comes to industrialisation and mining in South Australia.
And to have Greg here to open it – we actually had Ian Macfarlane last year, so things can move on quickly.
But it is good, and of course when Greg got appointed the Minister for Industry, I rang him up and said look, we've got to talk about Arrium, and he said it's my number one point of business, this is the first issue I'm dealing with.
So within three days, or four days, of him being appointed, the $49 million loan was in place.
And of course we keep talking to Mark Mentha, Arrium about what it is that we can sensibly do in this space to make sure that this industry survives.
As I say to people, if steel was to vacate Whyalla, we would be facing – I think I would have 5000 people on Newstart within 12 months.
People can do the sums on that, that is substantial cost to the nation, and we need to get our head around the fact that this industry absolutely does need to survive, firstly in a sense of our security, our ability to supply our major contractors, and then of course as a local employer.
So just fantastic to have him here.
Minister, just on that, are you confident that $49 million with be enough to find Arrium a buyer, or can we read into your comments about further discussions with them that you may need to tip in something else?
Look, I obviously won't pre-empt any commercial negotiations that the administrators have internationally, but they're on the search for buyers.
What are buyers looking for? They're looking for an operation that can be world class, that can be competitive.
The lesson of Dulux and Nyrstar and BlueScope is long standing firms can be incredibly competitive.
The lesson of the three major car manufacturers is they won't stay unless they are competitive.
So the first thing is, be competitive, and that's got to be a partnership between everyone involved.
The Commonwealth has already said that we are deeply committed to this through the $49 million loan.
I won't pre-empt either the commercial negotiations or any further steps at this point – we will just listen very carefully to the needs, but help to bring everybody towards what we hope will be a genuine, long term, competitive solution.
Minister, how important is it for the workers to take a realistic pay cut?
Look, I won't refer to any particular negotiations between the administrators and the workers. I think it wouldn't be right for me to intervene there.
But the key thing that has to happen, the lesson of Nyrstar, the lesson of BlueScope, the lesson of Dulux, is a partnership between workers and management.
Indeed, the whole distinction between workers and management is these days a fiction – that everybody's in the one boat, and it either floats beautifully or the outcome is unthinkable, and it happens in a way that affects everybody, as Rowan says.
I think we can get there, but there has to be a total commitment on all sides.
Minister, one of the issues that's being raised by some of the peak manufacturers in SA at the moment is the cost of energy, in particular the spot market.
Has that been raised with you by any of the big manufacturers here, and what do you make of the spot price spikes we've seen in South Australia?
Yes, absolutely it's been raised, and indeed for six years I have been warning about this.
This is why we fought against Bill Shorten's carbon tax.
Mr Shorten wants to bring back a new electricity tax, not just on the nation but in particular on South Australia and South Australian manufacturing jobs.
I cannot imagine how he could explain to these firms and these workers that he wants to drive up the cost of electricity.
We removed that tax because it didn't do the job, but also it drove up the cost of electricity. And if he brings it back, it will drive it up again.
My colleague Josh Frydenberg is going to work very constructively with all of the states and territories on national electricity market reform.
And I hope that this Friday, two days from now, is the real moment where we will say that the path to electricity market reform began.
Just on that point, Nick Xenophon's speaking at this conference later today, we understand he's going to be calling for a stationary energy emissions trading scheme at a national level – if not, between South Australia and Victoria.
Is that a good idea? I mean, you've got a very good knowledge of this, given your portfolios. Do we need to do something to encourage more gas generation in Australia?
Well my message to Mr Shorten and to anybody else is that now is not the time for a new carbon tax, no matter what you call it.
We have a system that's reducing emissions. We will be three-quarters of a billion tonnes below the emissions levels over an eight year period that Labor predicted when they left office.
So we're doing that without a new electricity tax.
And we're not able to introduce an electricity tax, and we will fight any proposals for an electricity tax.
He makes the point that Malcolm Turnbull supported this back in 2009 when he co-commissioned Frontier Economics to look at just such a scheme?
We have a system that's working, they're reducing emissions without an electricity tax, and we're not about to bring in an electricity tax. Mr Shorten does want one. Okay, thank you very much.