Steel and Aluminium Exports

Hansard ID: HANSARD-1323879322-149074

Hansard session: Fifty-Eighth Parliament, First Session (58-1)

Steel and Aluminium Exports

Mr CLAYTON BARR (Cessnock) (17:01:05):

I move:

That this House:

(1)Notes that a trade war with increasing tariffs and quotas is in no‑one's interest.

(2)Notes that in 2023-24, New South Wales' total steel and aluminium exports to the United States were worth $511 million, representing 16 per cent of New South Wales' total steel and aluminium exports.

(3)Notes that Australian steel and aluminium products compete with the rest of the world with no tariffs and quotas.

(4)Calls on all governments to act quickly on preventing foreign dumping of steel and aluminium products that could cost Aussie jobs.

I hope that the House can stand united on the importance of our various economies and industries having a free trade approach to meeting the demands of communities across the world, and the fact that our businesses are and have been competing on the global front for decades. Those that are doing and continuing to do well today have done so on their own two feet. They have created a fantastic product at a desirable price. A bunch of businesses are no longer with us today because they have not been able to make that transition to the global free trade market. On that last point, I speak about the incredible industrial hub of the Hunter, which is matched only by Western Sydney and the Illawarra. I know we will hear from the members in those areas soon, but the Hunter has been an incredible industrial community for decades.

Indeed, when I reflect on my time at Marist Brothers in Maitland, an all-boys school, about two-thirds of students left school by the end of year 10 and got trades. Most of them were in industry and manufacturing, and they became tradespeople in their own right. Many of them do it extremely well. That is the history of the Hunter Valley. A lot of those jobs and industries no longer exist, which is sad and disappointing. The most significant disappearance of one of those industries was BHP Steel. More recently in my time as the member representing that wonderful community, we lost Hydro Aluminium at Kurri Kurri. A whole bunch of global pressures in place at the time meant that Hydro Aluminium had to make a decision about its closure and departure from the market. At that particular time massive amounts of aluminium were being dumped into the global market, which basically meant that a hardworking, multi-decade business known as Hydro Aluminium, which originally started as Alkini Aluminium, could not compete in that environment. It could not get through that difficult period.

Because Hydro Aluminium could not ride out the amount of aluminium dumping on the market at that time, 500 people in the Cessnock electorate lost their jobs. Around 20 or 30 per cent of those workers would never find work again. Even the local tyre shop lost about a million dollars a year worth of business. The local bowling club lost 20 or 30 per cent of its trade and turnover. The flow-on effect of our workers losing their jobs was significant—in the coffee shops, the hairdressers, the supermarkets and the bike shops. The flow-on effect on that particular occasion, with that particular business and that particular aluminium manufacturing industry was because of the dumping of aluminium products. That is the risk that we face right now with regard to potential tariffs in different parts of the world.

I speak about another tariff imposed more recently in the Hunter, which was on our wine industry. That had a really significant effect on our ability to manufacture and export wines to different countries. Again, that was because of trade tariffs. Tariffs can be really damaging to not only the community on which they are imposed but also communities globally that have set up business models that rely on exports or imports that do not have tariffs attached to them. For example, a significant portion of the Australian steel imported into the United States, one of our wonderful trade partners, goes into US defence markets. As our defence ally, the US uses Australian steel to prop up its wonderful businesses and industry that manufacture important defence products and to create brilliant, permanent, full-time jobs in the US.

Of course, that then brings us to the concept of the AUKUS deal, which Australia and Britain and the United States have entered into together. Australia is relying on the US and Britain to manufacture the submarines that we will ultimately benefit from. I hope the House will note that tariffs can be dangerous. We need good businesses to stand on their own two feet and operate in a global market. A number of businesses are doing that. One of the risks facing Australia at the moment is that tariffs imposed may well lead to foreign dumping of steel and aluminium, which could have a significant flow-on effect to many businesses in our community.

Mr MARK COURE (Oatley) (17:08:12):

In support of the motion, I speak on an issue that affects Australian jobs, industry and economic stability, and the impact of trade wars and tariffs on our steel and aluminium sectors. As we know and have heard from the member for Cessnock, a trade war is a lose-lose situation. Where is Kevin Rudd? That is the question Australians are asking as Donald Trump moves forward with tariffs that could cripple steel and aluminium exports. Those tariffs threaten an industry worth over $511 million to New South Wales alone, representing thousands of Australian jobs in manufacturing, supply chains and exports, yet our ambassador has been missing in action. Yesterday the Prime Minister was umming and aahing during question time on this issue—no confidence whatsoever. This pressing issue threatens Australian jobs; it threatens our manufacturing sector and our global trade standing. But there has been silence from our ambassador to the United States, Kevin Rudd, in the face of new tariffs on Australian steel and aluminium.

When nations impose tariffs and quotas, they do not hurt only their trading partners; they hurt their own businesses, workers and consumers. They disrupt supply chains, as we heard before, increase costs and put hardworking Australians at risk. Let us be clear: New South Wales is a major player in the steel and aluminium trade. In the 2023-24 financial year, New South Wales exported over $511 million worth of steel and aluminium to the United States, making up 16 per cent of our total steel and aluminium exports. Those exports represent thousands of direct and indirect Australian jobs in steel production, transport and logistics—downstream industries that rely on a strong manufacturing sector. The real issue is fair competition. Australian steel and aluminium products are among the best in the world—high quality, high grade, reliable and produced under strong environmental work standards—yet we face an unfair playing field. While our exports are hit with tariffs and quotas, some countries flood the global market with artificially cheap steel and aluminium, often backed by government subsidies.

That is not fair trade; it is economic dumping, as we heard from the member for Cessnock. It puts our workers and our local manufacturing at a massive disadvantage. History has shown us the devastating impact of trade wars. When the United States has imposed steel and aluminium tariffs before, they have disrupted global markets and led to job losses in multiple industries in Australia and around the world. Tariffs may seem like a way to protect domestic jobs but, in reality, they often drive up costs for local businesses and weaken economies. Australia must not be caught in the crossfire of those trade conflicts. That is why this House must send a strong message, and I thank the member for Cessnock. We reject trade wars and protectionist policies that harm Australian exporters. Instead, we must push for fair and open trade agreements that protect Australian jobs, ensure competition, and allow Australian steel and aluminium to compete on merit, not on—

Ms Kate Washington:

Imagine if we made trains here.

Mr MARK COURE:

We will get to that too. We must take action here at home.

The ASSISTANT SPEAKER (Mr Jason Li):

Government members will come to order.

Mr MARK COURE:

We call on all levels of government to defend Australian industry, to work with international partners to ensure that Australian products are not hit with unfair tariffs and quotas, and to invest in local manufacturing. The motion is necessary, but we must back it with real policy shifts. NSW Labor must be proactive, not reactive, in protecting Australian jobs. Our workers and industries deserve more than empty promises. I support the motion.

Ms ANNA WATSON (Shellharbour) (17:12:59):

Only the member for Oatley could come into this place and say what he has just said. I will give a little bit of a history lesson before I start. I remember former Premier Gladys Berejiklian standing in this place and saying, "We don't do manufacturing very well in New South Wales". She went to Germany and came back saying, "We don't do it very well in this State".

Mr Mark Coure:

Not true—we built ferries and we built buses. Don't lie; just apologise.

The ASSISTANT SPEAKER (Mr Jason Li):

The nice bipartisanship we had in this debate seems to have broken down.

Ms ANNA WATSON:

Before I start, I put on record that Port Kembla produces the strongest steel in the world. I support the motion and assure my community in the Illawarra that the Minns Labor Government is well and truly in their corner. Should we be negatively impacted by tariffs placed on our exports, we will not stand by and say nothing. I will speak mainly about the impact of the increase in tariffs on steel, as it is highly relevant to my community in the Illawarra, but I also assure workers and their families who rely on other exports that I will always be on their side when it comes to unfair tariffs. This debate is very important to the people whom I represent in this House, as the electorate of Shellharbour is just south of Port Kembla, one of Australia's most significant locations for steel manufacturing.

Just a few months ago the Premier visited the Illawarra with our Federal colleagues to announce a centre of excellence for manufacturing. We are looking at new technologies, new jobs, new opportunities and new hope for those thousands of employees who are looking to a Labor government—and, let us face it, we are the party of the worker—to provide those opportunities and to ensure those stable, long-term prospects. Tariffs do not help that situation. Those jobs are sustainable in the long term as they are not protected by inbound tariffs on imported steel. It is only fair that our steel industry is not put at risk by tariffs on steel destined for overseas markets. New South Wales businesses such as BlueScope Steel in Port Kembla export to the most competitive markets around the globe and are extremely successful in doing so. As a strong trading region, New South Wales does not want tariffs propping up industries. Our businesses operate on their merits and are therefore highly efficient. The Government supports free trade.

The Port Kembla Steelworks is only 15 minutes from Shellharbour and Dapto, and residents and businesses in my electorate would be adversely impacted by any threat to steel exports caused by tariffs on products or material produced at Port Kembla and destined for our export markets. Significant investment is already being undertaken to ensure that steel manufacturing at Port Kembla is viable well into the future, including the relining of blast furnace No. 6, and we must ensure that tariffs do not interfere with the viability of the export of steel from Port Kembla or anywhere else in Australia. I support Premier Minns's call for all governments to work together to ensure that our strong manufacturing industries get a fair go when it comes to export opportunities. The community knows that under the Minns Labor Government, unlike the former Government led by those opposite, New South Wales trade policy is in safe hands.

The Government and our Minister for Industry and Trade stand ready to assist the Federal Government on that important issue. A trade war is not in the interests of workers in the Illawarra and their families. Another relevant threat to our local steel industry is the risk of overseas interests dumping cheap steel into Australia as part of a trade war. I reiterate that Port Kembla produces the strongest steel in the world, and the Government does not want to see the dumping of cheap goods into Australia, which would damage our industries in the long term. That has also been raised with the Commonwealth Government and we will help as much as possible. I am honoured to represent a community that has had local steel manufacturing for nearly 100 years, and I hope that steel will continue to be manufactured in the Illawarra for another 100 years. The Government understands that tariffs hurt everyone, and I support the motion.

Mr DAVID LAYZELL (Upper Hunter) (17:18:03):

It is a pleasure to speak on this topic, which is very important to all of Australia and particularly to the industrial powerhouse that is the Hunter Valley. What President Trump is doing in the United States is piquing our interest. Certainly a trade war is in no-one's interest, but it cannot be a surprise that President Trump is doing what he thinks is the best thing for the United States. Therefore, in some ways, the proposed tariffs on steel and aluminium cannot be a surprise. Those materials are base products and are very energy intensive. For far too long, countries all around the world have used our coal to produce products at a much lower rate, and we are now struggling to compete in that market. President Trump is making moves to protect his market and those jobs; we should look at our country and see what is best for us.

The United States is our third largest trading partner. We export $33 billion in goods to the United States and import $65 billion in goods from the United States, meaning that there is a trade surplus. There could be no greater reason for President Trump to give us an exemption on those tariffs than that trade surplus. Australia is not a threat to the American economy, and that trade surplus proves it. If anything, NSW Labor is probably more of a threat to the New South Wales economy in many ways.

The United States is a significant investor in Australia, with investment standing at $1.17 trillion in 2023. The United States is also by far Australia's largest foreign investment destination, with our investment standing at $1.2 trillion last year. That two-way investment has more than tripled since the free trade agreement came into force, and it is a really important part of our relationship. Australia is still an important market for visitors from the United States, and the relationship between our two countries remains strong—not just in the tourist sector, but also in the defence sector. We are working together on projects of significance for both countries. When I worked on the F-35 Joint Strike Fighter program at Williamtown, I noted that the Americans saw that base and the one in the Northern Territory as an important part of their own defence network.

Of course, the tariffs have a huge impact on Tomago Aluminium, which has 1,000 local staff and involves many contractors and businesses. I remember visiting Tomago Aluminium as a youngster, and many of my school friends eventually went on to work there. It is a big industry that supports many businesses around the area.

Ms Kate Washington:

In the Port Stephens electorate.

Mr DAVID LAYZELL:

The Port Stephens electorate—that is right. It is in the Hunter. One of our great exports is the beef that comes from the Hunter. It is an important part of our relationship with the United States. The United States is currently going through a rebuild of its herd, and we are now topping our numbers. We can supply the lean beef that America needs to feed its people. They take the premium cuts and sell them around the world. We do the same, but we are an important part of their food network. That is the relationship that we want to rely on as we go forward and negotiate better deals with the United States to ensure that we can continue to trade without tariffs.

Dr HUGH McDERMOTT (Prospect) (17:23:10):

I speak in support of the member for Cessnock's motion and thank him for bringing forward this debate on a very important issue to New South Wales and the whole of Australia. Government members listen to the members on the other side of the Chamber, who are now in opposition, speaking about things they did when they were in government. What a joke they are! They are nothing more than economic vandals. In Western Sydney we have the largest industrial manufacturing base in the Southern Hemisphere, despite 12 years of the former Government's policies. That 12 years saw thousands of jobs shed from manufacturing throughout New South Wales and billions of dollars sent to contracts overseas. It is absolutely appalling.

Let us consider some of the examples. Who can forget the intercity rail fleet? Billions of dollars went to South Korea. The light rail went to France and Spain. Ferries went to China and Indonesia. Buses went to Germany and Malaysia. Those were all products that could be made here in New South Wales. Let us look at the intercity fleet in more detail: $2.3 billion was sent overseas and awarded to an offshore company. In 2023 the light rail was awarded to a Spanish company, and look at how well that went. So good! There was a $300 million investment to build rail lines from Sydney to Melbourne, Brisbane and Canberra. The project is three years late and has blown out by $1 billion—and the trains did not fit the tracks. We had absolute incompetence from the former Government for 12 years.

The whole approach of the Minns Government is completely the opposite. We are looking at local manufacturing. We are looking at our trade partners overseas and taking that role seriously. Who can forget that in its dying days the former Government also slashed $200 million from the trade portfolio? Opposition members have no right to sit here and smile. I am looking at the member for Oatley. He is smiling as he thinks of the thousands of jobs he destroyed as a Minister in that Government. He should apologise, resign from Parliament and go the way of the rest of them. All they were good at was destroying jobs in New South Wales, one after the other. Let us look at some of the top companies in Western Sydney. There are so many in Western Sydney, and that is where the money and the contracts should be going.

Mr Kevin Anderson:

You want to talk about resigning from Parliament?

Dr HUGH McDERMOTT:

The member for Tamworth is another failed Minister who will spend the rest of his career in opposition. Let us consider Precision Oxycut and Allthread Industries, with sites in Smithfield and Newcastle operating since the '70s. It is the largest steel profiling company in New South Wales, employs more than 105 people, and produces more than 150 tonnes of steel plates per day. It has grown to be a leading manufacturer across Australia and the Asia-Pacific region. Hycast Metals is another outstanding Australian company that manufactures stainless steel castings. It is a world-class supplier of precision investment castings to projects like the Dubai International Airport terminal and the Central Police Station in Hong Kong—it supplied more than 8,200 aluminium bricks to that project alone.

BlueScope Steel down the coast and at Badgerys Creek produces 80,000 new steel house frames and more than 24,000 tonnes of steel per year, creating more than 300 jobs. Vulcan has been around since the '90s. It produces a whole range of steel and aluminium products that are shipped overseas. Those are the types of companies that government contracts should go to, contrary to the failed policies produced by the previous Government. The Minns Labor Government in New South Wales cares about manufacturing and tariffs. It talks to the Federal Government. The outstanding Prime Minister in Canberra is talking directly with Trump. The ambassador, who members opposite like to have a go at, is also doing the same.

We do not care about politics when it comes between us and the United States because we are trade partners and good friends. We have been friends since before World War II, and we will continue to be close friends for many years to come. This is just like the Super Bowl. Opposition members are the Chiefs and Government members are the Phillies. The Opposition is going to be treated just the same by the electorate in two years time—it will go down in a big way.

Mr MATT CROSS (Davidson) (17:28:16):

I speak in support of the motion by the member for Cessnock. The people in the gallery are here to hear about free trade, of course. Welcome. The announcement today by United States President Donald Trump of a 25 per cent tariff on steel and aluminium around the world, which includes Australia, is extremely devastating. It is especially devastating for Australian jobs and for the Australian economy.

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