SUBJECTS: RAIL INDUSTRY, FUTURE OF MANUFACTURING, ENERGY PRICES.

E&OE TRANSCRIPT
RADIO INTERVIEW
ABC RADIO CAPRICORNIA
TUESDAY, 4 JULY 2017

SUBJECTS: RAIL INDUSTRY, FUTURE OF MANUFACTURING, ENERGY PRICES.

INTERVIEWER: Labor Senator Kim Carr, Shadow Minister for Innovation, Industry, Science and Research, and a Senator from Victoria, addressed Rockhampton rail workers yesterday. And he will meet with leaders of heavy industry in Gladstone.

Mr Carr actually has some history in the region. He attended  high school in Gladstone in the 1960s, his father was a boilermaker so he was probably there for part of the construction [indistinct].

He explained to me his message to Aurizon workers, who are being made redundant by the decision to shut down Rockhampton’s railworks.

SENATOR KIM CARR: Well we are saying that there is no need to have this situation. We can produce the necessary jobs in this country in the rail industry. After all, we have been producing trains in regional Queensland for 150 years.

INTERVIEWER: Aurizon have said that their stopping what they’re doing here.  They’re shifting it other places which are more convenient for them and fits more in line with whatever their strategic objectives are. So while jobs have been lost here, there have been jobs created at Sarina.

 

CARR: There is also the casualisation of jobs. There is also a change in the way in which work is performed. The real issue here is whether or not those yards are able to produce trains in the way that they have been able to in the past.

Now we are finding this happening right across the country. This is not a problem unique to this one city. What we know is that around this country governments have made decisions to purchase offshore rather than to build Australian. In particular Liberal governments – we have seen in NSW, and of course the Newman Government in this state.

INTERVIEWER: I don’t think that’s a fair assessment would it be. I think all Australians, all governments would have been buying things from countries overseas.

CARR: Victoria now has a policy of 100 per cent Australian steel in the rail projects being built. There’s $35 billion worth of capital projects being undertaken over the next 10 years in Victoria, with a really heavy emphasis on building in Australia.

In South Australia, the Labor government has a really heavy emphasis on local procurement. But in NSW, under a Liberal government, we’ve seen trains being purchased in Korea, and in Queensland, under the previous Newman government, we saw trains being purchased in India.

INTERVIEWER: So in Victoria and South Australia nothing that the government buys comes from overseas?

CARR: No, what they’ve done is change procurement policy to ensure that a majority of their work is built locally – not every single nut and screw.

INTERVIEWER: So there are situations in which every government, of all persuasions, buys stuff from overseas?

CARR: They have a policy to buy Australian, and in the case of steel, 100 per cent Australian steel. We need to find a mechanism by which local companies are able to tender for that work, and so that the companies have the ability to physically do the work.

We need to have that work maintained in Australia, and that skills are developed and secured her for the long term.

We’ve seen what happened in Canberra with the automotive industry. We don’t need to see it happen in the rail industry. We don’t need to see …

INTERVIEWER: But the automotive industry only survived through several governments of different political persuasions because of huge subsidies by taxpayers …

CARR: By a fraction of the amount spent by other governments around the world! And now what will it cost us in terms of social security? What will it cost us in terms of social distress? What will it cost us in terms of social dislocation as we lose those jobs, which should be maintained in Australia?

INTERVIEWER: Senator Carr also had more to say about the future of blue-collar workers – there’s a lot of those in this region – and he also talked about energy prices.

CARR: There’s a question here about whether or not we accept the market fundamentalism or fatalism that says we can’t do anything about [the loss of manufacturing jobs]. I don’t take that view. We know that we that governments can work with industry, with our universities and our research agencies, work with people to develop new capabilities and new industries, to get the best technologies for high-skill, high-wage jobs for this country. We can learn from international experience …

INTERVIEWER:  That doesn’t explain the harsh realities that we’re seeing in basic manufacturing, which employs a lot of people. Manufacturing is human effort, it’s tools and it’s materials, those three combined. The market fundamentalists would say it can be done practically anywhere on earth where labour costs are cheaper. So manufacturing is not disappearing, it’s just going outside the country.

CARR: Let’s look at what happens in Germany. Let’s take this away from Australia and talk about a country that is high-wage, an advanced technological society, a federation like Australia. The government in Germany – a conservative government in coalition with the Social Democrats – is talking about six per cent growth in high-end manufacturing. In blue-collar jobs. In Europe they don’t take this attitude that we have to have a race to the bottom. They say that with the right policies we can develop the right investment strategies to ensure that we are able to build jobs for the future.

That’s what I’m about. Now we can’t do that if we keep pushing up the price of energy, and if we keep working on the assumption that manufacturing is someone else’s problem and we’re happy to see these jobs go offshore. Governments have to stand by their own people. They have to stand by the capabilities of their own people and ensure that the prosperity of this nation is properly shared. It means working with our universities, our research agencies, to get the technologies and the new knowledge applied in industry and to make sure that we have the investment to build the jobs for the future.

INTERVIEWER: How do we then inspire this new level of technology? Because if we go along this path that you’ve raised, with Germany, we operate in a global market. A lot of the machinery you see out there, the hi-tech stuff, comes from Germany. Are you suggesting that a path forward is for Australia to compete with Germany for the hi-tech stuff?

CARR: Of course it is. I know that in the energy industries, for instance, in the development of new technologies for renewables, we are able to develop Australian-made goods and services that are used in our industries. We know that we’re able to develop the right machinery for our mining industry.

We have innovative capacities. We have extraordinary talents in this country. Why aren’t we using them more effectively? So we can have jobs in Australian for Australians, using our resources? Take rail, for instance. This country is going to purchase $45 billion of rolling stock in the next few years. Why can’t that be made in Australia?

INTERVIEWER: It can certainly can, and it has been in the past. But the issue is that it’s far cheaper to buy it overseas.

CARR: But it’s not good equipment, it’s full of faults. We’re finding that it doesn’t suit our needs. If we had a policy framework in which governments led, we could build our trains in Australia. We could make sure they used Australian steel. We could make sure we had the skills necessary to ensure that prosperity was spread for all our people.

INTERVIEWER: So do you think governments should mandate that those items being used at the Adani coal mine, for example, be manufactured locally?

CARR: We should ensure that we have a national rail industry plan, so that we build our rolling stock, the rails on which they travel, the signalling equipment they use, in Australia.

INTERVIEWER: So you are saying we should mandate it? It’s one thing to have a plan but  

CARR: Governments can ensure through procurement policy that we maximise our opportunities for Australian businesses, and we can make sure that there is a good use of public money to build Australia’s capabilities. What we’ve found instead is a preference within governments to buy things cheaply, which ends up costing us more in the long run.

INTERVIEWER: It’s not just governments, it’s consumers. You couldn’t go to a workshop anywhere here in central Queensland and not find tools that once would have been made in Australia but are now made in China for one fiftieth of the price.

CARR: Maybe not one fiftieth. What you’ll find, though, is that there’s got to be an attitude: I wear the badge Made in Australia with pride. I wear it because I think it’s important for people to ask for the Australian-made product.

It’s simply not the case that our wages are necessarily the determining factor. Our wages as a percentage of production costs are relatively small. But there is an attitude about increasing levels of profit, and an attitude that you can always get it cheaper overseas. That is not necessarily the case 

We have the capability in this country to build products in Australia, and when you talk about government contracts I am of the view that we should make sure we are purchasing Australian.

INTERVIEWER: Let’s talk about energy prices. What are you advocating there?

CARR: The Government has understood very late in the piece how serious this is. We know that manufacturers in particular are facing price increases in their energy contracts of up to three times, and we’re finding that increasing numbers of our manufacturers can’t even get contracts.

So we’ve seen in recent times companies announcing  that they can’t continue because of the price of energy. We can’t have that. A country like this which has such an extraordinary wealth in terms of energy can’t be facing a situation where we’re exporting energy, where Australian gas is cheaper on the spot market in Japan than it is in Australia.

INTERVIEWER: That is true, but you’ve also got a supply shortage, and part of the reason for the shortage is that states like Victoria, where you’re from, are refusing to develop coal-seam gas reserves and are instead relying on Queensland to supply all the gas. Hence there’s a shortage, because some of it’s going to the most valuable market. Should Victoria be changing their policy?

CARR: There’s no doubt that in rural areas there’s been a very strong move to protect prime agricultural land, and it’s difficult to question that in NSW and Victoria. But that’s not the reason we’re doing that. What we’ve found is that the resources company are sending gas overseas. They can get more money sending it overseas …

INTERVIEWER: What’s wrong with that? Their businesses have spent extraordinary amounts of money developing these resources.

CARR: That’s why we say there needs to be a national interest test …

INTERVIEWER: So you’d like to see the Government control where gas businesses …

CARR: These are public assets. They belong to the Australian people and there is a national responsibility for the Government to ensure that our economy is able to do the things that are necessary to preserve living standards in this country, rather than for individuals to make profits in the way that they have.

INTERVIEWER: If you’re prepared to mandate where existing gas businesses sell their gas, why don’t you also mandate the gas tenements in places that haven’t been developed in NSW and Victoria?

CARR: What we do know is that there needs to be more exploration for gas. There’s plenty of gas in this country. The question is not a shortage of gas. The question is where the gas ends up. We need to be able to find ways in which the gas, particularly in the north of the country, can get to the south of the country.


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