Transcript - Sky News - Business Now with Ross Greenwood

The Hon Alex Hawke MP
Shadow Minister for Industry and Innovation
Manager of Opposition Business in the House of Representatives
Federal Member for Mitchell

TRANSCRIPT

Sky News Business Now with Ross Greenwood

E&OE

ROSS GREENWOOD: Well, the parlour state of the Australian industry is best seen right now in metals processing. The Whyalla steelworks only survives because of government funding and therefore your taxpayer dollars. Mount Isa’s copper smelter is exactly the same. And Nyrstar’s smelters in Port Pirie and in Tasmania, same story again. Alcoa's Worsley aluminium refinery, it's been shut. Now there are reports suggesting that Tomago aluminium refinery in New South Wales is about to close. In every situation though the story is similar. Energy prices are too high and domestic demand is too low. I spoke earlier with Alex Hawke, the Shadow Minister for Industry and Innovation.

ALEX HAWKE:  Well, you're right, Ross. This is the fourth major bailout now facing the government and it should be a real warning sign to them in one year. You know, Glencore, Nurse Star, Whyalla, and now Tomago. Their Future Made in Australia programme is really starting to become a future bailed out in Australia. And we have great concerns about that. Every single business is saying the same thing in heavy industry and metal smelting in Australia, that energy cost is driving this process for their boards, for their companies, and that's leading them to make the decisions they're needing to make. And so, when the government goes in and bails them out, it's an unsustainable process in the long run. And the question's got to be asked, you know, why won't the government do something about energy prices for industrial users and when will it do something about that to make it sustainable?

ROSS GREENWOOD:  There's one rather cynical way you could look at this and that is that if the biggest electricity user in New South Wales goes broke, it means there's more electricity for everybody else. But that's not the way in which Australia, as an industry, as a home for industry, should we be looking at it?

ALEX HAWKE:  No, well, it's enormously important to Australia. Heavy metals are refining the alumina sector, aluminium production, and these things really matter. And so the idea that we would save electricity is, of course, I think, a dud proposition. Sovereignty is telling government at the same time that we've got this, that we must have sustainable industry sectors in our own country, given the challenges in global security, but also global trade. And this is what's vital. So, you know, we've seen the government has a list. They've got a list that they've produced for themselves. I've got it here. We've got it. It's a cabinet document. And it's a two-page list of facilities at risk in Australia. This is the document, what it says itself, and the handling strategy that the government's got. It's redacted, so there’s none of them on it but if you can see this here, it's two full pages of industries in Australia, industrial facilities that are at risk at the moment. And that's a very serious warning sign to the government about how energy price is driving the process of making industry in Australia totally uncompetitive.

ROSS GREENWOOD:  So this government, though, is highly sensitive to job loss, which is the reason why it's stepped in at REX, the reason why it's stepped in at Whyalla, at Mount Isa, at Nyrstar. And so the whole point about this is you can't simply have industry being propped up by taxpayer dollars forever. Those industries have got to stand on their own two feet.

ALEX HAWKE:  And that's right, Ross. You've been a strong voice about this, but it's plain economics. The government needs to do this right now, and we support them doing the bailouts at the moment. The problem we've got is they're doing nothing about the underlying cost structure. In fact, their climate targets, arguably, will make this process even worse in relation to costs for businesses in Australia. And there's only so long that the taxpayer can be asked to bail out multinational companies effectively. And that's what's going on here. And all of them now understand the bailout process. There's a process of conversation with government about it. How long can the taxpayer fund this? And the answer is not too long.

ROSS GREENWOOD:  OK, then there's one other part about this. He's just done a deal, the Prime Minister, with the US President, about rare earth metals. And the point is that that is now going to be subsidised to be actually creating a new industry. And yet you've got other industries, which are literally on life support, you're trying to prop up a new industry to be created at the same time. So there's some sort of, as you'll say, disconnect here, I would have thought.

ALEX HAWKE:  Oh major disconnect, especially about what is needed in the economy. We can't lose this heavy industrial capability for our defence. We can't lose it for our sustainability as a society. Heavy industry is needed. And as soon as we forget that, the means of production, if we lose them, we will be extremely vulnerable. And the government knows this. I believe they do know it. But then, at the same time, through their energy and climate policy, they have no sympathy for these businesses, with their red and green tape, with their industrial environment in Australia. You know, the unions are merciless with these businesses at the same time as they're having significant trouble. And then, at the same time, we've got the government saying, on energy cost, well, there's no solution on the horizon. Now, given we've got energy abundance, we really have to rethink this equation and make it sustainable for business to be able to manufacture in Australia.

ROSS GREENWOOD:  Alex Hawke, the Shadow Industry Minister. Many thanks for your time today.

ALEX HAWKE:  Thanks, Ross.

ENDS