Legislative Council

GREENS BILL: Steel Industry Protection Bill passes 2nd reading

November 2nd, 2016

On the 2nd of November 2016, Mark spoke to his Steel Industry Protection Bill 2016 and brought it to a vote at the second reading. The Bill successfully passed the second reading.

The Hon. M.C. PARNELL: In summing up the second reading debate, I would like
to thank the Hon. Rob Lucas, the Hon. Kelly Vincent, the Hon. John Darley and the Hon. Tung Ngo.
I thank the Hon. Kelly Vincent for her brief—

The Hon. K.L. Vincent: Succinct.

The Hon. M.C. PARNELL: —succinct contribution of support. I also acknowledge that the
Hon. John Darley has given this some thought. Perhaps when we come back in two weeks' time
there might be some aspects of the bill that he is able to support. I will just make a few brief
observations about the Liberal Party position. I appreciate that in a spirit of cooperation they are
allowing the bill to go through the second reading, and we will debate the detail of the Liberal
amendments and any others when we come back in two weeks' time.

The Hon. Rob Lucas did refer to potential legal difficulties, and he made the point that he is
not privy to any latest legal advice. I am always willing to provide the Liberal Party with legal advice,
and I do not charge. One thing I did notice, and it has occupied me as well, is the idea that there are
international trade agreements that people are nervous a bill like this might infringe. I will make one
brief point: treaties that Australia signs, by virtue of a very peculiar law we have in South Australia,
do not have as much force as people might think.

Members might recall that, I think three times now, I have tried to repeal the Administrative
Decisions (Effect of International Instruments) Act, unsuccessfully. Maybe I should be grateful that I
have been unsuccessful because that is the bill that says no state ministers or public servants can
be held to account for failing to comply with an international treaty, unless of course it has been
implemented into domestic legislation. I put that in as an extra point.

Certainly, I think the flavour of this debate is one around governments trying to pretend that
they are in favour of free trade whilst at the same time wanting to protect local industries, as the
Hon. Rob Lucas and the Hon. Tung Ngo and others have said is also their agenda. The Hon. Rob
Lucas referred to the federal Liberal government and the state Labor government being in step in
terms of local procurement policies.

It was, in fact, very timely. I do not know if members have caught up with the news today,
but the Arrium steelworks at Whyalla has just announced that it is putting an extra shift onto its steel
rolling mill, and that will result in the creation of 44 new jobs. According to the steelworks' executive
general manager, Mr Theuns Victor, there are a number of factors contributing to the greater demand
for steel. These include a strong pipeline of rail work stemming from this year's federal budget,
changes in government planning and procurement policies, support from the steelworks' current
customer base and a new customer on the order book.

That is great news for the people of Whyalla and for the 44 workers. Maybe they are previous
workers who were laid off who will get their jobs back; maybe they will be new workers. Someone
might be tempted to think that, clearly, we do not need a bill like the one before us because we have
some people re-employed without it, and I think that is the debate we are going to have in two weeks'
time about whether we can rely on policies which can change as the wind changes or whether the
best protection we can offer workers is the guaranteed local procurement in legislation.

As to the amendments that the Liberal Party has tabled and that we will debate in two weeks'
time, I guess the question they pose is whether it will be sufficient to shame governments for poor
performance and for not complying with local procurement policies or whether we need to mandate
and punish non-performance and non-compliance with local procurement policies. I guess that is at
the heart of those amendments, but we will deal with those in two weeks' time.

The Hon. Rob Lucas referred to the potential question about the scope of projects that are
caught and, yes, that is tricky because not everything is a straightforward government build, by a
government department, paid for with government money. There are more convoluted ways that
public infrastructure is provided. I will point out that to the best of my ability I have included definitions
of designated public works and the definition of public authority, which includes an ability to use
regulations to catch some of these other circumstances. Even if it is not a direct payment out of
consolidated revenue by a government department or a minister, we can use regulations to catch
other types of projects, and I think that may or may not be the best we can do. I am open to sensible
amendments on those grounds.

The Hon. Rob Lucas mentioned that it may well cost more to buy Australian steel, and I
guess to a certain extent that is the point, just like it costs more to build submarines in Australia than
to buy them off the shelf from somewhere else, but from a public policy point of view people see that
there are benefits from doing things locally. I point out that my bill does not include open slather
where a local steel producer can charge what they want and the government must buy their steel.
There is a 20 per cent price buffer built in, and on my calculations, that should be more than enough
to ensure that 90 per cent of steel used in infrastructure projects is Australian steel.

The Hon. John Darley made the point again in relation to international trade agreements that
we are entering that area where there is a fear of retaliation by other countries when nations or states
try to implement local procurement policies. I guess we will have a bit more of a debate on that when
we come back, but it just seems that this area is so full of backdoor methods that countries use. We
have even heard the Hon. Tung Ngo refer to antidumping tariffs, so there are other methods which
effectively can be seen as protectionist or local procurement policies but they are done through the
back door. My bill does it through the front door.

The Hon. Tung Ngo's contribution reinforced that this government supports procurement, but
he says that they prefer to leverage their industry participation policies. Again, the question is whether
those policies are enough or whether they need to be mandated. I thank members for their
contribution. I am pleased that this bill will be read a second time tonight. We have two weeks to
consider the Liberal amendments, and I suggest that if other members have amendments they think
could prove improve this bill, we could have those tabled in the next two weeks. I look forward on
Wednesday week to continuing the debate on this bill.

Bill read a second time.

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