STEEL INDUSTRY PROTECTION BILL 2016

25 August 2016

In Committee, Labor Amendments


The Hon. ADAM SEARLE ( 11:04 ): By leave: I move Opposition amendment No. 1 on sheet C2016‑062 and Opposition amendments Nos 3 to 6 on sheet 2016-054D in globo.

No. 1 Definition of  excluded steel 

Page 2, clause 3, paragraph (a) of the definition of excluded steel , lines 10–12. Omit all words on those lines. Insert instead:

(a) any kind of steel that is not manufactured at any location in Australia and, in relation to a particular public works project, could not be manufactured in Australia for the purposes of that project:

(i) at a reasonable cost, or

(ii) within a reasonable time, or

No. 3 Percentage of Australian steel to be used

Page 3, clause 4, line 2. Omit “all steel”. Insert instead “at least 90 percent of the steel”.

No. 4 Percentage of Australian steel to be used

Page 3, clause 5, line 6. Omit “any steel”. Insert instead “at least 90 percent of the steel”.

No. 5 Percentage of Australian steel to be used

Page 3, clause 6 (1) (a), line 12. Omit “any steel”. Insert instead “at least 90 percent of the steel”.

No. 6 NSW Steel Industry Advocate

Page 4. Insert after line 17:

9 NSW Steel Industry Advocate

(1) The Governor may appoint a NSW Steel Industry Advocate.

(2) The principal office of the Advocate is to be located within the Illawarra region.

(3) The Advocate may be removed from office by the Governor on the address of both Houses of Parlia ment.

(4) The office of Advocate is a full-time office and the holder of the office is required to hold it on that basis, except to the extent permitted by the Minister.

(5) The office of Advocate is a statutory office and the provisions of the Government Sector Employment Act 2013 relating to the employment of Public Service employees do not apply to that office (except as provided by this section).

(6) The Advocate holds office for such term not exceeding 5 years as may be specified in the ins trument of appointment, but is eligible (if otherwise qualified) for re  appointment.

(7) The office of Advocate becomes vacant if the holder:

(a) dies, or

(b) completes a term of office and is not re-appointed, or

(c) resigns the office by instrument in writing addressed to the Governor, or

(d) becomes bankrupt, applies to take the benefit of any law for the relief of bankrupt or insolvent debtors, compounds with his or her creditors or makes an assignment of his or her remuneration for their benefit, or

(e) becomes a mentally incapacitated person, or

(f) is convicted in New South Wales of an offence that is punishable by imprisonment for 12 months or more or is convicted elsewhere than in New South Wales of an offence that, if committed in New South Wales, would be an offence so punishable, or

(g) is removed from office under subsection (3).

(8) The following provisions of or made under the Government Sector Employment Act 2013 relating to the employment of Public Service senior executives apply to the Advocate (but, in the application of those provisions, a reference to the employer of any such executive is to be read as a reference to the Minister):

(a) provisions relating to the band in which an executive is to be employed,

(b) provisions relating to the contract of employment of an executive,

(c) provisions relating to the remuneration, employment benefits and allowances of an executive.

10 Functions of NSW Steel Industry Advocate

(1) The NSW Steel Industry Advocate has the following fu nctions:

(a) to monitor compliance with the requirements of this Act,

(b) to monitor whether steel (other than excluded steel) required by this Act to be used in the construction of relevant public works is manufactured to appropriate Australian Standard s,

(c) to conduct a review of the steel manufacturing and fabrication sector with particular focus on the following:

(i) the supply chain capabilities of the sector;

(ii) the co-ordination by the sector of research and development and innovation;

(iii) the investment in the sector of plant and equipment;

(d) to prepare reports in accordance with this Act.

(2) The Advocate may, in connection with the exercise of the functions of the Advocate under this Act, make such inquiries and undertake such investigations as the Advocate considers necessary.

(3) The Advocate may, by notice in writing, request that any person provide, or require any public authority to provide, the Advocate with information (including documents) relevant to the exercise of th e functions of the Advocate under this Act.

11 NSW Steel Industry Advocate required to report to Parliament

(1) The NSW Steel Industry Advocate is required to prepare, at least once every 12  months, a report setting out a State infrastructure plan that i dentifies future relevant public works, and the steel requirements of those works, and to furnish the report to the Presiding Officer of each House of Parliament.

(2) The Advocate is required to prepare, at least once every 2 years, a report on the procur ement policies of the State, and whether those policies adequately take into account all costs and benefits related to steel procurement (including costs and benefits related to transport, insurance, maintenance and repair, the environment, employment and regional development), and to furnish the report to the Presiding Officer of each House of Parliament.

(3) The Advocate may, at any time, make a report on any other matter arising in connection with the exercise of the functions of the Advocate and furnish the report to the Presiding Officer of each House of Parliament.

(4) A copy of a report furnished to the Presiding Officer of a House of Parliament under this section is to be laid before that House within 15 sitting days of that House after it is received by the Presiding Officer.

(5) The Advocate may include in a report a recommendation that the report be made public immediately.

(6) If a report includes a recommendation by the Advocate that the report be made public immediately, a Presiding Of ficer of a House of Parliament may make it public whether or not that House is in session and whether or not the report has been laid before that House.

(7) If such a report is made public by a Presiding Officer of a House of Parliament before it is laid b efore that House, it attracts the same privileges and immunities as if it had been laid before that House.

(8) A Presiding Officer need not inquire whether all or any conditions precedent have been satisfied regarding a report purported to have been made and furnished in accordance with this Act.

12 Staff of NSW Steel Industry Advocate and delegation

(1) Persons may be employed in the Public Service under the Government Sector Employment Act 2013 to enable the NSW Steel Industry Advocate to exercise his or her functions.

(2) The Advocate may arrange for the use of the services of any staff or facilities of a NSW Government agency and may, subject to the regulations, engage such consultants or contractors as are necessary for the purposes of this Act.

(3) The Advocate may delegate the exercise of any function of the Advocate (other than this power of delegation) to any person referred to in this section.

The package of amendments together achieve a number of objectives. The first amendment, dealing with an amendment to the definition of “excluded steel” as it stands in the bill, addresses some of the alleged criticisms of the bill in its current form that have been advanced by members of the Government. The amendment seeks to make sure that included in the definition of excluded steel is any kind of steel not manufactured in any location in Australia but also, in relation to a particular project, steel that could not be manufactured for the purposes of that project at a reasonable cost within a reasonable time. I know that the Government advanced niche steel needs and certain requirements for certain projects as being a reason that the bill in its current form is not practicable. This amendment addresses that issue comprehensively.

The package of amendments includes a review of the State’s infrastructure plan, which will provide indicative future demand for Australian-made steel and infrastructure projects and will set up a known pipeline of projects so that Australian steel producers can plan for the demand. Our package of amendments also provides for what I describe as a strong cop on the beat—a steel industry advocate to be appointed to ensure that new Australian standards and certification for Australian-made steel use are monitored and complied with—to be based in the Illawarra region of this State.

Our amendments will stop different classifications of steel and low-quality imported steel from being used in publicly funded State infrastructure as far as is practicable, and the steel industry advocate will also be tasked with undertaking a major New South Wales steel and fabrication sector review focusing on the supply chain capability of the sector, coordination of innovation, research and development and investment in plant and equipment. There has been substantial criticism that the steel and fabrication sector is highly fragmented, its supply chain capability is compromised and its investment in plant and equipment is declining. We think there is further scope for the State to review the steel and fabrication sector regarding its supply chain capability and to improve these matters, and these are addressed in detail in the amendments.

The BIS Shrapnel report that I referred to in my second reading contribution and that Mr Shoebridge also referred to has indicated that a local content policy achieving a 90 percent local steel content for publicly funded projects would provide a substantial net benefit to the economy, which is why we proposed the 90 percent figure as opposed to mandating an across-the-board 100 percent use. Ideally, 100 percent would be achieved, and that is why we say “at least 90 percent” in the amendments: because we recognise that this should be the start of the journey which we can build upon, but we want to make sure that the policy framework we are putting in place can be properly bedded down to meet the objectives for which it has been designed.

The Opposition believes that the amendments together will greatly strengthen certainty in the sector and provide a platform for investment growth, and even expansion not only in steelmaking but also throughout the supply chain. I am not referring only to the steel industry but also to those other industries and suppliers that support it. The benefits to the manufacturing sector will fan out from Port Kembla across west and south-west Sydney, the Hunter, and the rest of the great State of New South Wales. The Opposition recognises that although the focus is on steel production and steel use, many individual businesses and industries depend on a strong steel sector for their viability. 

The ripples across the economy from the failure of our steel manufacturing capability would do irreparable social and economic damage. It is important when we make public investment decisions that we focus not only on the best up-front price but also on real value for money. That is why when the Opposition announced its steel plan it said that we must look not only at the up-front purchase price but also at the true cost of a project across its life to establish whether or not to go ahead would be penny wise and pound foolish. We should not pay a cheaper up-front price for a product and then spend millions of dollars patching and repairing it earlier than would otherwise have been required. Rather, we should invest a little more up front and get longer durability and real value for money. 

Given the important public policy objectives that flow from the hundreds of millions of dollars, or, indeed, billions of dollars of investment of public moneys by the State Government and local councils, we must ensure that it is not only economically efficient but also socially efficient. That is why the Opposition welcomes the bill and has constructively engaged with it. Unlike the Government, the Opposition has consulted with industry, the regional communities that depend on this valuable industry, the trade unions representing the workforces, the captains of industry, and the people who live in the regions who depend upon a strong, thriving steel sector for their way of life and longevity. The Australian Labor Party has long been committed to the steel industry and to those communities. That will not change today, and that is why I have moved this positive suite of amendments. I invite members to join with the Opposition in ensuring that this bill is as effective as it can be. The nongovernment parties in this place appear to support a strong, thriving steel sector.