While Opposition Leader Bill Shorten has been making every post a winner lately, politically and in policy terms, he came up short yesterday when he travelled to the Illawarra to announce a “six-point plan” for the steel industry.
As a former head of the Australian Workers Union, Shorten is no stranger to steel plants; it’s a sector he’s been closely involved in. And Labor has enthusiastically seized on the public perception that the government has no interest in manufacturing, drove the car industry out of the country, and is staunchly free market in its view of Australian industry. But somewhere between Labor’s instinct to protect manufacturing (which now employs just 7.4% of Australian workers), its unenthusiastic support for so-called “free trade agreements” and the rush to capitalise on the travails of Arrium, it crafted a “plan” held together with sticky tape and Clag.
Last week, Shorten spoke about “requiring Australian content” in government-funded infrastructure. Having presumably realised that such “requirements” would breach trade agreements (the worst reason not to do something protectionist, but anyway), yesterday he switched to “maximising” Australian steel content in infrastructure projects. Pressed on how he would “maximise” local steel, we got old-style Shorten, not the recent, more cut-through version:
“We will ask our agencies when they allocate contracts to start recording what the Australian content is because I think that you can’t improve something until you start measuring it. In terms of maximising, I can guarantee you, and through you all of the steel families and all of the small businesses in steel, I understand that the Australian steel industry has a sustainable future.”
The accompanying fact sheet didn’t shed much more light, except that it would involve “a regular reporting system … to track the use of Australian steel in federally-funded projects.” So, more paperwork for procurement agencies, and a guarantee that Shorten understands the steel industry is sustainable. It might as well have been The Thick Of It Down Under.
There’d also be “new steel procurement regulations that require projects receiving government funding to use steel that meets Australian standards and certification requirements”. The safety of imported steel is one of the biggest weapons in the arsenal of local steel manufacturers. Problem is, there’s an entirely new system of independent certification that the steel industry body itself has established since 2013. The Australian Steel Institute explains:
“… self-inspection and certification for structural steelwork (self-certification) demonstrably does not work … The lack of rigour in current Australian compliance regimes (compared with our equivalents overseas like the USA, Canada, UK etc.) covering the supply of structural steel (along with many other construction products), has led to an unacceptable degree of unsuitable and often faulty steelwork for major development projects in Australia.”
The new system it has set up to address this, the National Structural Steelwork Compliance Scheme, is based on Australian Standards, requires certification and testing documents by the manufacturer, independent certification by Steelwork Compliance Australia and risk categorisation. The first certifications were made last year.
No mention of that from Labor, which would like to exploit the perception that steel from countries like China and Vietnam goes into buildings unchecked for compliance with local standards, while good, honest Aussie steel is left stockpiled at the factory.
Inevitably, too, the six points include yet more “strengthening” of anti-dumping laws, that noxious mechanism that isn’t even as efficient at protectionism as old-fashioned tariffs. Labor and the government are in a bidding war on anti-dumping — the government strengthened the anti-dumping system in November but is now also promising to “consider ways to improve the efficiency of investigations and possible additional measures” for the Anti-Dumping Commission.
Anti-dumping is now essentially built into the business models of both Arrium and Bluescope, so reliant are they on trying to stop cheap imports. Then again, everyone’s turning to anti-dumping as their preferred tool in the de facto steel war underway: the Americans are doing it to us; the Chinese have done it to the Europeans, the South Koreans and the Japanese; the Europeans are thinking of doing it back to the Chinese; the Indians are about to do it to the Chinese; and the Mexicans are investigating also doing it to the Chinese. That’s because, in a world notionally committed to free trade, the fiction of “dumping” remains an accepted fig leaf for rank protectionism — and the costs are silently borne by consumers and businesses.
Shorten also wants to create a “Steel Supplier Advocate”, more or less re-establishing a position that existed when Labor was last in government. Industry Minister Christopher Pyne immediately sought to trump that, too, declaring that he was the “Steel Advocate” — a perhaps unfortunate claim given how screwed the local steel industry now is.
What drives this on all sides is a mentality reflected by Senator Kim Carr’s statement at yesterday’s announcement that “we’ve got to be much more than just a quarry and a beach”. Well, we are, Senator: professional services industries now employ nearly 9% of us; our tech sector is growing rapidly, even if it mostly employs males; our education sector is a major export earner despite the best efforts of both parties to wreck the vocational training sector; our health and caring services employ 13% of the entire workforce. Growth in all those areas has easily offset the loss of jobs from manufacturing and especially heavy manufacturing.
Ten years ago, policymakers couldn’t accept the idea of an Australia without a car industry, but we now consider the looming reality of that with relative equanimity. Hopefully it won’t take as long to accept that an Australia without a steel industry is no more problematic an idea, if it can’t compete on the international trade battlefield.