10 March 2021




SUBJECTS: Greensill; steel manufacturing; Australian jobs.

ED HUSIC, SHADOW MINISTER FOR INDUSTRY AND INNOVATION: Good morning. Steel workers from Whyalla to Portland need to know and have the assurance that they've got a Government that's on their side. I am deeply concerned by reports today, impacting potentially on thousands of workers from Whyalla through to Portland, Government inaction that could potentially have an impact on those workers livelihoods. In the last 24 hours we've seen that administrators have been appointed to the supply finance group Greensill that is potentially impacting on the operators of Whyalla Steel Works, Sanjeev Gupta's operations over there in Whyalla. 

This is of deep concern to Labor. We have been raising for some time, our concerns around whether or not this is a sustainable arrangement to be in place in terms of the supply chain financing concerns that we've had around this. 

On top of this, we've also seen that workers in Portland Victoria, 150 jobs potentially could go because the Morrison Government has failed to encourage its own Snowy Hydro to mandate the use of Aussie steel on wind farm project where we're seeing imported steel being used at the expense of local manufacturers that could provide that work. So we see a range of impacts that are being potentially felt by steel workers across two states. 

In relation to Greensill, what we've also been concerned about, again Labor has raised these concerns written to the ACCC this and in spite of all this found Lex Greensill, can go and have meetings set up by Julie Bishop at Davos with former Finance Minister Mathias Cormann, encouraging similar sort of arrangements to potentially be embraced to pay 150,000 Australian Commonwealth public servants. A move that would have drawn and had drawn at the time concern of the Finance Department who likened these arrangements to payday lending. 

We've now seen the concerns of the market and in particular the viability of this scheme being brought into question. Again, the Morrison Government has failed to act quickly to address those concerns. Now the issue is potentially how widespread these types of arrangements exist and whether or not it might have an impact on other firms and other jobs. So if Greensill can get time with Ministers in the Morrison Government and get, as its reported, time with the Prime Minister himself what we want to know is whether or not the Prime Minister has spent the time to think about what can be done to protect steel worker jobs. What can be done to ensure the viability longer term of those jobs.

We're not saying that the appointment of the administrator means bad things, but it potentially could. We need to know that steel workers will be looked after, should anything happen. We also need to ensure that we've got a Government that's on the side of manufacturing workers. This has been a question that we've seen and had for quite some time with the Coalition Government. They have pummelling manufacturing over the years, driven out car manufacturing, cobbled together manufacturing plans after getting rid of them just because Labor had brought them in. It's not good enough to have the sort of foot dragging that we've seen out of the Morrison Government.

Now some of that indolence, some of that delay, has caught up here. That's now generating concerns about the viability of some of these businesses that are providing thousands of jobs to manufacturing workers. Again, we cannot afford to see delay and inaction impact on good jobs, particularly for steel workers in this country.

JOURNALIST: How do you know about the meetings at Davos? Can you tell us anything about the timing like when what year was the meetings between Bishop and Cormann at Davos?

HUSIC: Well, the meetings were actually reported on in July 2020. It detailed how Greensill Capital managed to get a meeting set up with Senator Cormann via their Asia Pacific Chairperson Ms Bishop. There was a proposition being put forward for a sort of wages on demand scheme that the Department of Finance likened to payday lending. In fact, if I can draw on the words if you don't mind. They say, for example, that it was economically similar to payday lending and further expect that the financing and administration costs are met by the employer, not the employee and at the end of each pay cycle, the employer would be responsible for repayment direct to the lender. 

So it has been detailed in terms of that meeting, it shows the depth of contact that has existed between Greensill and the Government. I liken it to the Liberal mate’s club that have been very easy at setting up those contacts and using their networks to get meetings with decision makers in Government. I do wonder whether or not that closeness has prevented earlier and more timely action by the Morrison Government to deal with this issue. 

My big concern now is that the question marks around this and obviously the calling in of administrators puts a big question mark on the operations of Australian based businesses, that employing a lot of steel workers. And again, I make the point, just because the administrators have been brought in does not signal a bad decision in itself. But potentially it could, and we shouldn't have to have that question mark hanging over those jobs if the Morrison government acted sooner.

JOURNLIST: So what do you believe the Morrison Government should be doing to act? What do you want them to be doing?

HUSIC: In this case here in terms of steel worker jobs, we want to know, one - that it's even on the Morrison Government's radar. Two - what's the plan B? If these things should occur, what is their plan B to support workers through this. There is a bigger, longer term issue and if I can put it this way. The Morrison Government, the Coalition, their heart isn't in manufacturing. Now one of the first things that they did on assuming office was to get rid of manufacturing plans that had been put in place, that if they had been in place still, would have created a much stronger manufacturing environment in this country. They then saw and we saw the impact of that neglect through the pandemic, when people started to question why, when we've been so reliant on imports, we haven't got manufacturing capability and capacity here to supply and meet the needs of Australians. Then after that, they cobbled together a plan that in many respects reflects what we had had in place when we were in Government.

On top of that, of this $1.5 billion program that they've got, they even acknowledged straight off the budget, only three per cent would be spent in the first financial year, this year. So they're slow off the mark in terms of supporting manufacturing, they've actually worked counter to manufacturing. Right now, in a long way to answering your question, we do need to see some level of activity and energy by them that says, we will make sure that we stand up for these jobs and we'll also make decisions that proactively support those jobs. For example, getting Snowy Hydro, instead of using imported steel to be using locally made wind farms that use components that are manufactured by Keppel Prince in Portland Victoria, that will save 150 jobs in that case as well. We do need to see a lot more energy and activity by this Government. And we do need to see evidence of a plan B should in a terrible event, things go wrong, do happen.

JOURNALIST: What should that plan B be?

HUSIC: Well again, they're sitting in those decision maker roles. They should be telling us and telling the Australian public and importantly, steel workers, what will happen? And can I just point out…

JOURNALIST: But what would your plan be?

HUSIC: Well, let me just come back to your initial question and then I'll come back to your second one if I may. In terms of what they should be doing, they could be taking proactive decisions to encourage Snowy Hydro to embed more Aussie made steel and use more of the work of Australian workers in their work. So that's one thing they could do. In the case of Whyalla and what's at stake here, it's not just the steel workers. It's also the people that are doing the iron ore extraction as well, the miners. Also coal miners out in Tahmoor and the supply chain that feeds in to Whyalla. There are also a lot of suppliers and contractors that are used in this process as well. They're going to want to know what's going to be done in case the administrator calls in all the checks and it puts pressure on steelmaking in Australia in particular with this firm in Whyalla. 

In answering your question, it is well, what will the Government do if this happens? What discussions are they having to ensure that things are okay? I will be completely upfront with you, I understand that the businesses themselves, talking to people in the know, they’re good solid businesses, right. So there's a lot of prospect there for them to be able to stand on their feet. But there is an issue about confidence. That confidence can be strengthened by the Government saying, this is an issue for us, we are going to work with the businesses and we are going to make decisions that ensure that the jobs of people affected by the events of the last 24 hours won't be impacted on negatively.

JOURNALIST: And just on the second part, what would your plan be? 

HUSIC: I think people get a high level, if I may say, that manufacturing is in our DNA. A lot of our people and a lot of our supporters owe their livelihoods to manufacturing. It's why we took decisions when in Government to ensure that the manufacturing environment strengthened by investment in manufacturing in particular focusing on the key sectors. The Government, the Coalition, first thing they did is tear that apart. We've been arguing, for example, and particularly in Anthony Albanese, Budget Reply speech, there are a number of things we can do in terms of rail manufacturing, defence and boosting skills that are in high demand in manufacturing, that we invest in this. So we've made those cases as well, to strengthen the broader environment. 

With respect to the two cases, be in terms of what's happening in Whyalla and what’s happening in Portland, as indicated a few moments ago. I think the Government should explain to us why they cannot put in place measures to encourage the greater use of Australian steel, in, for example, projects that will ultimately benefit the Snowy Hydro. One. 

In terms of Whyalla, our big thing would be, we'd be on the front foot, talking with the firms that are affected, seeing what likely scenarios might emerge as a result of what we've heard the administrators being brought in the last 24 hours, and what practical support could be given to ensure the viability of those firms as they try to navigate their way out of very turbulent times that have been brought on, as we've seen in the last few weeks with Greensill?

JOURNALIST: When has the Labor Party in the past raised your concerns with supply chain financing? Just on that letter to the ACCC too, when was that sent and what reply did you get?

HUSIC: My predecessor Brendan O'Connor, actually wrote to the ACCC in 2021. I'm more than happy to supply you both with copies of that letter. He wrote in actually, if I may correct myself in the capacity, not as Shadow Minister for Industry, but Shadow Minister for Small Business. He had raised the whole issue of supply chain financing and had raised the concerns that had been raised with us about the way that operates and in particular any negative impacts on smaller firms. It also reduces the onus on bigger businesses to actually pay their bills on time, instead of using a finance mechanism like this, referred to in part as reverse factoring. That doesn't really represent a good deal for small businesses. So we raised that with the ACCC. 

I understand the ACCC since then has taken some steps. But again, an active Government, with its ear to the ground, knowing this is an issue would act on behalf of Australian businesses that have got these concerns. Not in the interest of the Liberal mate’s club that can get side meetings with Davos through Liberal Party network connections. 

Australians are tired of seeing that stuff happen and particularly when it happens at their expense. What's happening now is where there have been questions raised about the way this all operates and the potential impact on business. We've seen nothing but inaction from the Government. Now people are rightly calling, well hang on if something had been done sooner on this, we may not have necessarily had the concerns raised now about the impact on jobs.

JOURNALIST: How do regulators protect against this instance, going forward? 

HUSIC: If you don't mind, I might leave that to the regulators to be able to go through detail about how to best manage it. But the reality is the concerns have existed for a while. A Government with its ear to the ground would have picked up on this and acted on it. Again, I raise the question who knows what might have been. I know it's a bit of crying over spilled milk and I'm the first to acknowledge it. 

But really, when you look back on it, you think if these concerns were raised, why didn't the Government act sooner when they could have. I'm genuinely concerned and as I said, it doesn't necessarily mean that because the administrators have come in that these impacts have happened and we want these businesses to operate very strongly. We want steel worker jobs protected. But we do need a Government that works actively.

I genuinely also am concerned that the Government's more interested in the political equivalent of dress ups when it comes to manufacturing. I love putting the hard hat on and the High-Vis on, but they don't necessarily take the steps to protect the people that actually wear that gear. We need to see more of that.

JOURNALIST: Apologies if I misheard, but did you say Brendan O’Connor wrote the letter in 2021?

HUSIC: Yes, 2021, 27 January. 

JOURNALIST: So, have the Labor Party raised this issue of reverse factoring beforehand or was that the first time?

HUSIC: Well, if you don't mind, I would like to be able to chase those details up with earlier instances. But I was made aware of this activity in terms of raising these and representing these concerns to the ACCC which I would suggest are pretty relevant in light of recent events. Ok, thank you for your time.