tag:theconversation.com,2011:/id/topics/arrium-26402/articlesArrium – The Conversation2016-06-21T01:34:57Ztag:theconversation.com,2011:article/612162016-06-21T01:34:57Z2016-06-21T01:34:57ZAn Arrium bailout shows how the myth of manufacturing and growth lives on<p>Reality is always a victim in election campaigns. The case to save the Arrium steel business (and the Port Kembla plant) is still that this will protect jobs. The real purpose is to secure votes.</p>
<p>Labor announced last week it would provide a $100 million bailout for Arrium if elected. The Coalition in response has offered $49.2 million to help save 2700 South Australian jobs.</p>
<p>The larger point behind this is the direction of Australia’s industry policy, which has become a pseudonym for manufacturing policy. The primary case to support manufacturing is that it creates jobs. The fact is, it doesn’t anymore. </p>
<p>With automation (for example robots assembling manufactured products rather than workers), employment in manufacturing has shrunk. In the US where the output from manufacturing has continued to climb, employment continues to shrink.</p>
<p>Australia had had the longest run of growth of any global economy until the global financial crisis. This was because successive governments made the economy more productive by reducing tariffs, which increased the costs of imports and cutting subsidies to business. This experience now appears to have slipped from political memory.</p>
<p>The loudest voice for manufacturing is unions. But the share of the workforce which is unionised has <a href="http://www.smh.com.au/national/trade-union-membership-hits-record-low-20151027-gkjlpu.html">shrunk</a> from around 40% in the 1980s to 15%. And most unionised employment is in services – education, health, financial services. Nevertheless, the voice of manufacturing unions is evidently louder. It shapes Labor policy.</p>
<p>We have paid very dearly to sustain uncompetitive manufacturing in Australia. The motor industry is the best example. In the late 1970s, encouraging Australians to buy Australian-made cars required high tariffs (over 100%) to price imported cars out of reach. Consumers and voters paid dearly for this. The justification was this created employment – it did until technology reduced the need for human labour input.</p>
<p>Our steel industry was established with similar intentions. The economics of steel globally is that it is a labour-intensive industry where developing countries can produce it much more cheaply than industrialised economies. Steel industries in Europe, the US and Australia have persistently pressed governments to limit imports of cheaper steel and press for a variety of measures which increase the cost of imports. </p>
<p>But it means building and manufacturing costs are higher. Just as higher tariffs made automobiles more expensive, higher cost steel increases the costs of infrastructure and building, so paying for the buildings and using infrastructure costs consumers more.</p>
<p>The context in which this needs to be seen therefore is what actions create jobs and greater prosperity for Australians.</p>
<p>In Australia, manufacturing is one of the smallest contributing sectors to economic growth. Services generate around 60 percent of economic output and 80 percent of employment. Over the last decade, <a href="http://www.industry.gov.au/Office-of-the-Chief-Economist/Publications/Documents/AIR2015.pdf">the pattern of change</a> in output and employment in the Australian economy has been clear. Manufacturing’s share of Gross Domestic Product (GDP) fell 2% and that of services increased by 2%. </p>
<p>In South Australia the share of GDP contributed by manufacturing will largely be auto manufacturing and steel production. There, the longer term pattern is clear.</p>
<p>Between 1993-94 and 2013-14, the share of output of services to the economy in South Australia rose by 5 percent (to 68.6% of State Domestic Product (SDP)). Manufacturing’s share dropped 3.9% (to 7.6% of SDP). The pattern for the national economy is similar. Manufacturing’s contribution to national GDP fell 3.9% and the contribution of services to GDP rose 5%. This is the pattern among all industrialised economies. </p>
<p>The question about jobs at Arrium and in the auto industry is not what is necessary to maintain them, but what can be done to assist workers to move to other employment. This may not be as much a problem as is implied in general debate. </p>
<p>The OECD recently reviewed management of job loss in several OECD countries including Australia. It found for Australia that 70% of people who lost jobs found new employment within a year and 80% within in two years. This was a higher rate than in most other OECD economies. The report commended Australia for work policies which facilitate such an outcome.</p>
<p>The challenge we face in Australia in these increasingly uncertain times is how do we make our economy more competitive to increase economic growth and jobs. There is a risk that the result of the election will impede the action necessary to address that challenge. This would be a dismal result.</p><img src="https://counter.theconversation.com/content/61216/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Alan Oxley receives funding from business and government indirectly from the APEC Study Centre at RMIT University Melbourne in his capacity as Chairman and as Principal of ITS Global, consultants on global issues.</span></em></p>The mantra of propping up manufacturing to save jobs is no substitute for a property industry policy focused on growth.Alan Oxley, Chair, APEC Study Centre, expertise international trade law, economics, Asian regional development, RMIT UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/594682016-06-15T20:16:41Z2016-06-15T20:16:41ZState of the states: South Australia’s economy is the laggard of a nation in transition<figure><img src="https://images.theconversation.com/files/125641/original/image-20160608-15041-1xwldq1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">South Australia is proving to be a key point of interest for the electoral contest – not least because of the rise of Nick Xenophon's new party.</span> <span class="attribution"><span class="source">AAP/Julian Smith</span></span></figcaption></figure><p><em>Ahead of polling day on July 2, our <a href="https://theconversation.com/au/topics/state-of-the-states-2016">State of the states series</a> takes stock of the key issues, seats and policies affecting the vote in each of Australia’s states and territories.</em></p>
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<p>Not for the first time, there is something incongruous about South Australian politics.</p>
<p>The 2013 federal election saw a change of government, yet only one seat changed hands in SA (<a href="http://www.abc.net.au/news/federal-election-2016/guide/hind/">Hindmarsh</a>). Skip forward three years and the Turnbull government looks set to be returned – albeit by a whisker. Yet SA is proving to be a key point of interest for the electoral contest, not least because of the X-factor – the Nick Xenophon effect.</p>
<p><a href="http://www.abc.net.au/news/2016-05-30/one-in-five-south-australian-to-vote-nick-xenophon-team/7458606">Polling suggests</a> Nick Xenophon Team (NXT) candidates in SA lower house seats could attract more than 20% of first preferences. This would bring a range of seats into play, and ultimately could be a wrecking ball against the major parties.</p>
<h2>Key seats</h2>
<p>On election night, the results in three key SA seats will be worth keeping an eye out for.</p>
<p>In Hindmarsh, Liberal incumbent Matt Williams has to hold off a challenge from Steve Georganas, who held the seat from 2004 to 2013. If Labor fancies any chance of returning to office, then this is a key target.</p>
<p>Unexpectedly, the normally safe Liberal seat of <a href="http://www.abc.net.au/news/federal-election-2016/guide/mayo/">Mayo</a> is in play. NXT candidate Rebekha Sharkie is a former staffer to the incumbent MP – the SA Liberals’ falling star, Jamie Briggs. A large NXT vote could see Briggs lose his seat. </p>
<p>In <a href="http://www.abc.net.au/news/federal-election-2016/guide/boot/">Boothby</a>, retiring Liberal MP Andrew Southcott is hoping to hand over the reins to conservative newspaper columnist Nicolle Flint. The NXT vote in Boothby is unclear; Labor candidate Mark Ward might sense a slim chance of stealing the seat, held on a 7.1% margin. </p>
<p>While the lower house tends to dominate attention, the Senate race looks fascinating. Simon Birmingham has <a href="http://www.adelaidenow.com.au/news/national/federal-election/federal-election-2016-cory-bernardi-loses-top-spot-on-liberal-senate-ticket/news-story/91d04cf024b502a61dc5d0c9ff286946">taken top spot</a> for the Liberals, pushing Cory Bernardi into second place – a shrewd move given Bernardi’s polarising politics. </p>
<p>Penny Wong will lead Labor’s charge to increase its numbers, although the reappearance of factional powerbroker Don Farrell <a href="http://www.abc.net.au/news/2016-05-10/don-farrell-back-in-new-run-for-the-senate/7402990">may push</a> Anne McEwen out of the Senate. </p>
<p>The Greens will hope for an improved vote, although Sarah Hanson-Young hardly helped matters with a <a href="http://www.smh.com.au/federal-politics/federal-election-2016/election-2016-sorry-what-senator-sarah-hansonyoung-stumbles-on-superannuation-policy-20160601-gp8r7z.html">car-crash interview on superannuation</a>. Robert Simms is a smart, new brand of Green, and will aim to <a href="http://www.theaustralian.com.au/federal-election-2016/federal-election-2016-its-rob-simms-or-bob-day-for-senate/news-story/16f9606e58ca1e7004d59dd19db26a21">take the last Senate spot</a> from Family First’s Bob Day. </p>
<p>The NXT team is aiming for an incredible four Senate seats, but three looks <a href="https://theconversation.com/aided-by-the-new-senate-rules-nick-xenophon-should-have-a-happy-election-night-59900">more likely</a>. </p>
<h2>Key state issues</h2>
<p>At the last election, <a href="http://politicsir.cass.anu.edu.au/research/projects/electoral-surveys/australian-election-study/aes-2013">Australian Election Study</a> data showed the most important issue for Australian voters is the management of the economy, followed by health care and then education. There is no reason to think this has changed. </p>
<p>For the past few years, the SA economy has been the laggard of a wider economy in transition. Its <a href="http://lmip.gov.au/default.aspx?LMIP/LFR_SAFOUR/LFR_UnemploymentRate">unemployment rate</a> is the highest of any Australian state or territory.</p>
<p>Prime Minister Malcolm Turnbull has found some common cause with SA Premier Jay Weatherill in <a href="http://www.sbs.com.au/news/article/2016/06/03/pm-tries-nerd-goggles-adelaide">trying to shape</a> a “new economy” in the state. The end of the <a href="https://www.theguardian.com/business/grogonomics/2015/nov/30/transition-mining-boom-is-bust-or-is-it">mining boom</a> and the <a href="https://theconversation.com/political-fortunes-of-two-states-ride-on-the-end-of-the-car-industry-23068">death of the car industry</a> has placed added pressure on the defence industry to prop up the state’s fortunes.</p>
<p>A few local issues are playing out that might have an impact at the ballot box. The <a href="http://www.abc.net.au/news/2016-03-22/new-royal-adelaide-hospital-delayed-until-may-sa-government/7266912">delays in opening</a> the new Royal Adelaide Hospital and the state government’s <a href="http://www.adelaidenow.com.au/news/south-australia/survey-finds-majority-of-sa-surgeons-dont-support-transforming-health-reform-plan/news-story/48977ffb4c3e863a83be8be5b8364350">troubled Transforming Health agenda</a> has brought health care issues into focus.</p>
<p>Finally, there <a href="http://indaily.com.au/news/2016/02/17/adelaide-needs-higher-population-growth-infrastructure-australia/">remains a desire</a> for a fresh wave of infrastructure building. </p>
<h2>Policy proposals</h2>
<p>Lucky South Australians have been inundated during the campaign with regular visits from both Malcolm Turnbull and Bill Shorten. It’s a measure of how important the state has become that the Liberals have <a href="http://www.malcolmturnbull.com.au/media/delivering-jobs-and-growth-for-south-australia">launched a plan for SA</a>. Both major parties are targeting the state on a range of issues.</p>
<p>Given the previous Abbott government’s bungled handling of the submarine deal, the Liberals are pushing hard to reassure South Australians that jobs will follow on from this, along with other defence announcements. All sides are claiming a victory on this issue – including the ubiquitous Xenophon.</p>
<p>A key flashpoint remains the troubled <a href="https://theconversation.com/arriums-whyalla-steelworks-another-threat-to-fragile-manufacturing-sector-57475">Arrium steelworks</a> in Whyalla. While the Liberals quickly ruled out direct assistance to Arrium, it <a href="http://www.abc.net.au/news/2016-03-09/arrium-rescue-package-urgent-matter/7231742">fast-tracked a project</a> for steel for the Tarcoola rail upgrade to bring in more business. Labor <a href="http://www.whyallanewsonline.com.au/story/3849546/steel-plan-hope-for-whyalla/">outlined a six-point plan</a>, which includes providing assistance to local steel producers. </p>
<p>Elsewhere, the Liberals’ plan – inevitably linked to the “jobs-and-growth” slogan – targets jobs created through the National Disability Insurance Scheme, and infrastructure through the <a href="http://www.infrastructure.sa.gov.au/nsc">North/South Corridor</a> and the <a href="https://renewalsa.sa.gov.au/projects/tonsley/">Tonsley redevelopment</a>. </p>
<p>Strikingly, federal Labor leader Bill Shorten has brought class back into politics, and is seeking appeal on grounds of fairness. Shorten is playing to Labor’s traditional strengths and hoping national commitments on “Gonski” levels of funding for education, reinvigorating TAFE, and strong support for Medicare will resonate in SA. </p>
<p>No parties, except the Greens, are going near the <a href="http://www.abc.net.au/news/2016-05-06/sa's-nuclear-royal-commission's-findings-due-next-week/7388976">“nuclear” issue</a> until the state government’s consultation process is over. </p>
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<p><em>Catch up on <a href="https://theconversation.com/au/topics/state-of-the-states-2016">others in the series</a>.</em></p><img src="https://counter.theconversation.com/content/59468/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Rob Manwaring does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The key battleground of South Australia has been inundated during the campaign with regular visits from both Malcolm Turnbull and Bill Shorten.Rob Manwaring, Lecturer, Politics and Public Policy, Flinders UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/607982016-06-09T11:34:37Z2016-06-09T11:34:37ZGrattan on Friday: In Conversation with Nick Xenophon<p>The Nick Xenophon Team (NXT) is to this election what the Palmer United Party (PUP) was to the 2013 one. It is potentially the next big new thing in the Senate.</p>
<p>PUP in 2013 won three Senate seats – in Queensland, Tasmania and Western Australia – and one in the House of Representatives. NXT, on current polling, is set for at least three South Australian senators, including Xenophon himself, who has been in federal parliament since 2008.</p>
<p>Xenophon says NXT has a “fighting chance” of Senate wins elsewhere “given some national polls showing support between 3-5%”, although ABC election analyst Antony Green doubts this. But Green gives it “a good chance” in the SA House of Representatives Liberal seat of Mayo.</p>
<p>On the basis of its likely SA Senate numbers alone, NXT – like PUP before it – would have a significant slice of the balance of power in the upper house.</p>
<p>PUP’s seats were gained thanks in very large part to Clive Palmer’s money, which financed a massive advertising blitz. PUP surfed on the disillusionment of many voters with the major parties.</p>
<p>NXT is a product of the extraordinary personal popularity of Xenophon, who in the 2013 election – a normal half-Senate poll – won nearly two Senate quotas.</p>
<p>NXT is also tapping into the discontent in the electorate, which is at a high point. This week’s Newspoll showed 15% support for “others” – the category covering parties other than the Coalition, Labor and the Greens, as well as independents.</p>
<p>In SA, hit hard by the decline of manufacturing, Xenophon’s protectionist and populist platform resonates strongly. He is pitching as a man of the centre who could negotiate with a Coalition or Labor government. He describes his platform as “not ideological” – rather, it is “about solving problems”.</p>
<p>He will not say which side NXT would opt for if it were a player in a hung parliament – which could only happen if it had representation in the lower house.</p>
<p>In an interview with The Conversation, Xenophon rejects the proposition this refusal is a cop out, with several defences. “We haven’t seen all the policies of the major parties,” he says, and “[you’d] need to take into account who the other crossbench members of the lower house would be”. He argues it would be necessary to talk with the major parties to determine their attitude on key issues. </p>
<p>Finally, he insists there’s only a 0.0001% chance of a hung parliament. Xenophon expects a Coalition win even if Bill Shorten received a majority of the popular vote.</p>
<p>The Liberals hope a re-elected Turnbull government would find NXT reasonable to deal with in the Senate. Xenophon says: “I want to be pragmatic and constructive with whomever forms government.” But he indicates he’d extract his pound of flesh. He’d use his clout to stand up for manufacturing, such as fighting for the embattled Arrium steelworks in Whyalla.</p>
<p>He has given support to the Coalition’s proposed company tax cut only up to a A$10 million turnover threshold. He’d seek to block legislation to implement the Trans-Pacific Partnership agreement. John Howard this week drew a parallel between Xenophon and Pauline Hanson on trade, which Xenophon rejected as mudslinging.</p>
<p>When the question of a government having a mandate for its program is put to him, Xenophon counters by pointing to the Senate’s mandate. He says the upper house is there for the states and as “a bulwark against excesses of executive power”.</p>
<p>He notes a key difference with the United States where “they, it seems, have this incessant deadlock”. In Australia, “if worst comes to worst, and I’m hoping it won’t be the case, there is a deadlock provision that can be dealt with in terms of a double dissolution”. </p>
<p>He immediately realises the political danger in that comment – the voters wouldn’t want another double-dissolution election – and stresses the rarity of double dissolutions. Even so, his answer continues to nag at him after the interview.</p>
<p>PUP fell apart very quickly because Palmer was an impossible leader and his senators a disparate set of individuals with little in common. Xenophon is confident the same wouldn’t happen to NXT – although when he was in the SA parliament and a running mate was elected late in the piece, the relationship didn’t end well. He points out he’s long known and worked with the two SA candidates expected to be elected to the Senate – one just missed out getting in last time.</p>
<p>In Mayo, located in the picturesque Adelaide Hills, the luck has fallen NXT’s way. Incumbent MP Jamie Briggs had to resign from the ministry late last year over an incident in a Hong Kong bar involving a female public servant. NXT candidate Rebekha Sharkie is a former staffer of Briggs. When the Hong Kong matter came out she recalled from her time in his office that “there were things said that were misogynist in nature”.</p>
<p>Mayo has gone down to the line before, when in 1998 it nearly fell to Democrat candidate, singer John Schumann. A ReachTEL poll done in mid-May had the Liberals on 39.6%, NXT at 23.5%, Labor 18.3% and Greens 10.7%. Whatever happens in the end NXT has Liberals nervous about the seat. The Xenophon forces have even put Industry Minister Christopher Pyne under pressure in Sturt, though he is expected to be safe.</p>
<p>Xenophon spent two days in Mayo this week. On Wednesday, as he set out for the second day, he looked tired and stressed. He’s normally fairly harried but the strain of carrying a party on his shoulders is obvious.</p>
<p>At a meeting of about 40 in Lobethal, one of the many German-settled towns in SA, his reservations about the TPP went down well with his audience. He told a questioner who asked about preferences that NXT would run an open ticket in Mayo. His well-used joke that when NXT was renamed sometime in the future he’d really like to call it the “at least we’re not as bad as the others party” prompted the laugh it was inviting.</p>
<p>Xenophon is anxious to claim that NXT is not all about him. He says adopting a new, less personal name before the election would have been all too hard in terms of recognition, and expensive. But of course the party IS all about him. If he did not enjoy such personal popularity it would not exist, let alone be emerging as a likely significant player in the new Senate.</p>
<p>It is one of those parties almost certain to be a relatively short-term phenomenon in the Australian political firmament. On the balance of probabilities even if all goes well, it would be unlikely to survive much beyond the political career of its founder. The question is what it will do and can achieve while it lasts.</p>
<p><em>Below is an edited transcript of The Conversation’s interview with Nick Xenophon recorded in his Adelaide office on Wednesday, June 8.</em></p>
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<p><strong>Michelle Grattan</strong>: Nick Xenophon, how many seats do you think you can win in the Senate? And do you think you’ve got a chance of a house seat?</p>
<p><strong>Nick Xenophon</strong>: I can only tell you what the polls are saying, and the polls are saying voter support’s at around 20% in South Australia. Let’s see what happens between now and election day because I expect there will be a massive onslaught by the major parties. </p>
<p>When the major parties are talking about preferencing each other ahead of my team, which is a party firmly in the political centre, that would obviously affect our chances. But, at this stage, if you believe the polls, three Senate seats in South Australia and a fighting chance in the other states, given some national polls which show support between 3% and 5%.</p>
<p>And in the lower house, again, I know of one poll in Mayo, another in Sturt, which shows us coming second to the Coalition’s sitting members. So, you’d have to think that there would be a chance there, particularly in Mayo, where there does seem to be quite a strong level of support for Rebekha Sharkie.</p>
<p><strong>MG:</strong> Newspoll is showing a very high level of voter support for so-called “others” – that is, those other than the Coalition, Labor, and the Greens. Why do you think this is so?</p>
<p><strong>NX:</strong> Because I think people are fed up with the cosy Coles-Woolies duopoly of the major parties; that they feel it is a case of Tweedledum and Tweedledee; that after seeing the so-called leaders’ debate a couple of Sundays ago, it almost felt like the Seinfeld election – an election about not much at all. </p>
<p>And, I think that there is a real hunger to fill that vacuum, where it seems politicians have learnt their lines by rote in terms of the major parties, and there just doesn’t seem to be that connectiveness to the concerns of Australians – particularly on issues such as gambling, on jobs, on free-trade agreements and on issues of government accountability.</p>
<p><strong>MG:</strong> Just absolutely in a nutshell, how would you summarise your platform?</p>
<p><strong>NX:</strong> A platform from the political centre that is not ideological, that is about solving problems; where the three core principles, I think, are also a litmus test about good government in this country: in terms of predatory gambling, whether it’s pokies or online, about Australian-made and Australian jobs, which brings in the role that successive Australian government have played in not negotiating free-trade agreements well, and about government transparency and accountability. </p>
<p>The fact that senator Conroy’s office was raided two-and-a-half/three weeks ago indicates that neither parties are willing to take on those official secrets provisions in the Crimes Act that really stymie material that’s in the public interest reaching the public without fear of people going to jail.</p>
<p><strong>MG:</strong> Do you think that the last Senate was dysfunctional?</p>
<p><strong>NX:</strong> No, the last Senate was a Senate that had to be considered also in the context of the Abbott government’s policies. The 2014 budget was a shocker. It was full of broken promises. It wasn’t a budget that was so much about a mandate, it was about a reverse mandate. There was never a mandate to do what they wanted to do to Medicare, to young job-seekers, to universities. </p>
<p>But, people forget that the crossbench did support the government in terms of policies in respect of abolishing the carbon tax, abolishing the mining tax, dealing with border protection issues in a way that would make sure that the people-smuggling trade wouldn’t start up again. And also Direct Action as an alternative mechanism to deal with carbon pollution. </p>
<p><strong>MG:</strong> You look like you’ll have a fair share of the balance of power in a new Senate. How aggressively are you willing to use that share of the balance of power? And do you accept that a government does have a mandate for its main programs?</p>
<p><strong>NX:</strong> Well I’m not an aggressive person, but I will be forthright and I’ve been upfront in terms of my priorities. I do not want Australian manufacturing to wither and die – which is really one of the issues that this election needs to be about. </p>
<p>I want to do everything I can to make sure that the Arrium Steelworks in Whyalla, the last remaining major manufacturer of structural steel in this country, thrives and prospers – that it gets out of administration and becomes a strongly viable facility. Without structural steel in this country, you actually lose all the steel-fabrication businesses. In terms of the second part of your question …</p>
<p><strong>MG:</strong> On mandates …</p>
<p><strong>NX:</strong> On mandates. Well, governments have a mandate to introduce legislation. The Senate has a mandate to scrutinise that legislation and I don’t say that flippantly. I say that in the context that there are many hundreds of thousands of Australians that vote differently between the lower house and the upper house because under our Constitution, under our system of government, the Senate is there to represent the states. It’s also there under its proportional representation system to be a bulwark against excesses of executive power.</p>
<p><strong>MG</strong> But, nevertheless, the overwhelming number of voters are voting for the government compared to voting for the crossbenchers. So shouldn’t the government’s mandate override the Senate’s mandate?</p>
<p><strong>NX:</strong> Well, not if you’re campaigning on something completely contrary. </p>
<p>I mean, if South Australians are voting for me, and other Australians are voting for the [Nick Xenophon] Team to do something about predatory gambling, about Australian-made and Australians jobs, about government accountability and transparency, we’ve got an obligation to our supporters. </p>
<p>So, the great thing about the Australian political system compared to the US – where they seem to have this incessant deadlock because their system of government is quite different, even though our Senate has been modelled, to a large extent, on the US Senate – is that, if worst comes to worst, and I’m hoping it won’t be the case, there is a deadlock provision that can be dealt with in terms of a double dissolution. </p>
<p>Now, I don’t expect that that will happen again. I think that double dissolutions need to be something that happen very, very rarely in our system and this is our first double dissolution for over a generation. So I think I would not be doing my job for the people that support me and my team unless we stood up for what we believe in and have campaigned on.</p>
<p><strong>MG:</strong> I don’t think people voting for you would want you to bring on another double dissolution.</p>
<p><strong>NX:</strong> Absolutely not, absolutely not, and I’m just making that clear. But I’m saying that I think the government … we have that check and balance in the system. </p>
<p>I supported the ABCC [Australian Building and Construction Commission] legislation going through to a second reading vote – unlike most of my crossbench colleagues, and unlike the majority of the Senate. I want to be pragmatic and constructive with whomever forms government.</p>
<p><strong>MG:</strong> Now, you’ve criticised aspects of free-trade agreements. Would you try to alter or stop legislation for the TPP [Trans-Pacific Partnership] when it comes up?</p>
<p><strong>NX:</strong> Look, the Trans-Pacific Partnership is something that neither the presumptive Republican nominee, Donald Trump, nor the presumptive Democratic nominee, Hillary Clinton, want. </p>
<p>When both major parties in the US say they will not support the TPP, then why are we going down this path? I am not against free-trade agreements, but I am against trade agreements that are negotiated badly that are not in the national interest.</p>
<p><strong>MG:</strong> So you would try – just assuming that that legislation did come up; that it somehow did get through in America – you would try to stop it here?</p>
<p><strong>NX:</strong> Well, I couldn’t support it based on its current provisions. I think they have been negotiated badly. They’ve been negotiated in secrecy. </p>
<p>We need to look at the American system where the Congress, where the Senate has a role, before these agreements are finalised. These agreements are presented to the Parliament of Australia, to be effectively rubber-stamped. That’s not a good system.</p>
<p><strong>MG:</strong> Just to be absolutely clear – if you are able to, you would stop it?</p>
<p><strong>NX:</strong> Yes.</p>
<p><strong>MG:</strong> Now, John Howard this week suggested there were some parallels between you and Pauline Hanson. Now I know you pushed this off and you said: “thanks John, for the publicity”. But what is your substantive answer to that allegation?</p>
<p><strong>NX:</strong> Well, Michelle, my difficulty is that I don’t want to give Pauline Hanson any oxygen and I’ll try to keep my answer short. I reject her attitudes on migration, on race, on religion. I think that they are incredibly destructive. </p>
<p>I support well-negotiated free-trade agreements that are in our national interests. I believe that what Ms Hanson is proposing is not a solution to our nation’s problems and that her views on migration, on race, on religion, and particularly on Islam, are quite repugnant. </p>
<p><strong>MG:</strong> Everyone agrees that you’ll get two more senators in from South Australia, as well as yourself. So can you just tell us briefly who are these people who will be coming in?</p>
<p><strong>NX:</strong> Stirling Griff is someone that I’ve known for the best part of 20 years, when he was head of the Retail Association of South Australia. He was in fact the only business leader that came out and supported me opposing privatisation of electricity assets because it wasn’t well-thought-out. It was in direct breach of a government promise by the then-Olsen Liberal government. </p>
<p>We’ve got to know each other very well over the years. He has my full trust and support. He is a terrific bloke to work with. He’s bunkered down as the campaign director doing the same sort of ridiculous hours that I’m doing at the moment. And I really want him to get elected because he just missed out last time because of preference deals that the major parties and minor parties cobbled together, which saw Family First elected on Labor Party preferences. </p>
<p>So, a party to the right of the Liberal Party was elected on Labor Party preferences, which I thought was a spiteful decision made by the Labor Party to reduce the influence of what I stand for. </p>
<p>Skye Kakoschke-Moore, she’s number three on the ticket. She has worked as my senior advisor for a number of years. She actually put her hand up without me knowing. She went through a process to apply, to be a candidate, as did many other people around the country and in the state. And she went through it with flying colours. </p>
<p>I worked with Skye closely for the best part or over five years. She is well-respected by both sides of politics that have worked with her. She has a great grasp of policy detail and she will be a terrific addition to the Senate as well.</p>
<p><strong>MG:</strong> Even though you know these people well, do you think that there’s any danger that the team could, over the longer term, fragment in the way we saw the Palmer United team fragment?</p>
<p><strong>NX:</strong> No, for a whole range of reasons. </p>
<p>First, the structure of the party is different. I believe the way it has been operated has been very consultative. It is a very cohesive structure. </p>
<p>The other thing is that there’s this attack on me that it is personality-based politics. Well, I said on the first day when the team was launched [that] it was called the Nick Xenophon Team, because to call it something else would have cost a fortune to re-badge the group – a fortune that we don’t have. </p>
<p>And, after this election, assuming there are others that join me in the federal parliament, I want to change the name to something else.</p>
<p><strong>MG:</strong> To what?</p>
<p><strong>NX:</strong> Well, Michelle, I’ve speculated publicly that I like the name “at least we’re not as bad as the others’ party”, but I don’t know if I’ll get the numbers on that. I think we will change it to something else. The Michelle Grattan Movement appeals to me but I don’t think we’ll get that through either. </p>
<p><strong>MG:</strong> But, look, it is a personality-based party. How can you possibly claim anything else?</p>
<p><strong>NX:</strong> No, it’s because people know me, and there are people that are running that …</p>
<p><strong>MG:</strong> And you are a very good vote-winner.</p>
<p><strong>NX:</strong> You call me a vote-magnet. I’ve never heard that before, so I think I should be flattered, but …</p>
<p><strong>MG:</strong> But you can’t deny that this party is around personality and if you quit politics in two years, five years – there wouldn’t be a party.</p>
<p><strong>NX:</strong> You know the great consumer advocated Ralph Nader once said the function of genuine leadership is to create more leaders, not more followers. And what I’m trying to do is to have like-minded people, people from the political centre, that actually are passionate about Australia’s future, that want to find non-ideological solutions to the nation’s problems, to step up and come forward, as they have, to get elected to the parliament, which I hope will happen after the next election, and to make an ongoing contribution.</p>
<p>This is much bigger than just me. And that’s why you’ll see the group – the party – morphing into something else after this election – and that’s a good thing. So, that seems to debunk this personality-cult politics, which is both bemusing and disappointing. </p>
<p><strong>MG:</strong> If you got a lower house seat and if there were a hung parliament, you’ve said you’d negotiate with both sides. You won’t say which side that you would favour supporting to be in government. Isn’t that a bit of a cop-out though? Aren’t you just trying to avoid saying to voters, “well I would go with the Libs or I would go with Labor”?</p>
<p><strong>NX:</strong> It’s not a cop-out at all. How can it be a cop-out if we haven’t seen all the policies of the major parties, if it is a hypothetical …</p>
<p><strong>MG:</strong> But we have seen the policies, we will have seen the policies …</p>
<p><strong>NX:</strong> Well, they’re still rolling them out. And in the highly unlikely event of a hung parliament, you need to take into account who the other crossbench members of the lower house would be. </p>
<p>It would be necessary to sit down and talk to the major parties to see what their attitudes would be on a number of key issues, and for me to indicate which side I favour – and I genuinely don’t favour either – would be a very silly thing to do in terms of a negotiating position. </p>
<p>I would almost be like some of the trade negotiators for some of our free-trade deals which I don’t think were negotiated very well.</p>
<p><strong>MG:</strong> At a personal level, what sort of relationship do you have with Malcolm Turnbull and Bill Shorten?</p>
<p><strong>NX:</strong> Well, I’ve known Malcolm Turnbull longer than I’ve known Bill Shorten. I had a fair bit to do with Malcolm Turnbull as opposition leader when we worked on an alternative emissions trading scheme through Frontier Economics, which I thought was a very good exercise – [it] got done quite well. [I] respect Malcolm. He’s very charming and affable. </p>
<p>Bill Shorten – I’ve had a bit to do with, when he as a minister in the Gillard government. And we get on fine. It’s a case of not being able to spend much time with either leader because we’re all busy. </p>
<p>But the relationship with both men is, I think, very constructive and cordial. I like both of them at a personal level. I’m willing to work with either of them, but I still think that it is a 0.0001% chance that there will be a hung parliament.</p>
<p><strong>MG:</strong> Are you saying that partly because you know that people would be a bit more wary of voting for your party if they thought that that was making it more likely that there will be a hung parliament?</p>
<p><strong>NX:</strong> No, I’m saying it because I cannot see how the Coalition with 90 seats out of 150 in the lower house, in the House of Representatives, is going to lose anything more than seven to 10 seats.</p>
<p><strong>MG:</strong> So, you think they’ll win?</p>
<p><strong>NX:</strong> Yes, I do. I think Bill Shorten will make some inroads. I think he’s been campaigning quite well – but as is Malcolm Turnbull.</p>
<p>And I think we may have a 1998 situation where the Coalition loses some skin and loses a number of seats and that the ALP might even win the popular vote. They might get 51% of the popular vote but still fall a fair degree short of the number of seats they need.</p>
<p><strong>MG:</strong> Now finally, you came in on a platform of fighting gambling. And now you stand on the brink of having a great deal of power in the Senate. And yet, you haven’t been able to deliver on that fundamental original platform. Why is that? And do you think you could deliver in the next term?</p>
<p><strong>NX:</strong> Well, it’ll be on my tombstone: “here rests the no-pokies guy”. It’ll always be at the core of what I do because gambling policy is a litmus test of good government. The fact that governments, particularly state governments, are willing to sacrifice their citizens for gambling taxes when we’ve got the highest level of gambling losses per capita in the world is very telling.</p>
<p>And the pernicious influence of the gambling lobby, which I understand is now making big donations to the major parties that attempt to thwart me and the Greens, is interesting. </p>
<p>So, the simple answer is that I’ve continued to be an advocate for those who have gambling problems. That’s behind-the-scenes work that people don’t see. I’ll continue to agitate for this. But I believe that with other like-minded people joining me, we will be able to achieve so much. At the moment, I’m one voice out of 226 …</p>
<p><strong>MG:</strong> Well, you did have Andrew Wilkie …</p>
<p><strong>NX:</strong> And I want to make that clear. Andrew Wilkie, the Greens, other crossbenchers have been absolutely terrific on this issue, but if there’s more …</p>
<p><strong>MG:</strong> But nothing much has been achieved?</p>
<p><strong>NX:</strong> Well, in a democracy, you never give up to change bad legislation, to bring about legislative reforms that will be in the public interest. So, I’m not giving up. Much to the chagrin of those in the gambling lobby, I’ll continue at this even if I wasn’t in the parliament. I’ll continue to be an agitator on this issue.</p>
<p><strong>MG:</strong> Nick Xenophon, thanks very much for talking with The Conversation today.</p><img src="https://counter.theconversation.com/content/60798/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michelle Grattan does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The Nick Xenophon Team is to this election what the Palmer United Party was to the 2013 one. It is potentially the ‘next big new thing’ in the Senate.Michelle Grattan, Professorial Fellow, University of CanberraLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/574752016-04-08T06:30:20Z2016-04-08T06:30:20ZArrium’s Whyalla steelworks another threat to fragile manufacturing sector<p>Fears abound in South Australia about the future of Arrium’s Whyalla based iron ore and steel manufacturing facilities, as the company goes into voluntary administration. In a united front the <a href="http://www.theaustralian.com.au/business/mining-energy/malcolm-turnbull-steps-in-but-no-bailout-for-arrium/news-story/13dc02174e8e547575e9b770973e4f9a">South Australian and federal governments</a> are urging calm. The administrators say it <a href="http://www.abc.net.au/news/2016-04-07/arrium-enters-voluntary-administration/7306340">is business as usual</a> until a review of the company’s operations is completed, which <a href="http://www.theage.com.au/business/arrium-can-survive-for-two-months-while-review-happens-20160408-go1ejy.html">may take up to two months</a>. </p>
<p>An agonising period of uncertainty is about to unfold for Whyalla, all in the lead up to the federal election. Just how well this is handled by the Turnbull government will have a major bearing on the election outcome, at least in South Australia.</p>
<p>The stakes are high. With the highest mainland <a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/6202.0Feb%202016?OpenDocument">unemployment rate (7.7%) in the nation</a>, the last thing South Australia needs is another major plant closure. The countdown is already on for the closure of <a href="https://theconversation.com/adding-up-the-flow-on-effects-of-a-holden-closure-21063">General Motors Holden</a> and much of its supply chain next year. This is expected to drive the statewide <a href="http://apo.org.au/resource/closing-motor-vehicle-industry-impact-australia">unemployment rate above 10%</a> in the absence of major new investments. The possible closure of Arrium’s steel manufacturing and mining operations in Whyalla adds to these woes. </p>
<p>South Australia’s manufacturing sector suffered greatly from the high Australian dollar. When it broke through the 100 US cents barrier in 2011, the dollar acted like a wrecking ball through the nation’s mass manufacturing industry. The dramatic appreciation during the mining boom made our manufactured exports increasingly uncompetitive in global markets. This was on top of a more protracted problem of deindustrialisation in the sector over the last few decades where around 100,000 manufacturing jobs have been <a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/6291.0.55.003May%202015?OpenDocument">lost in Australia</a>.</p>
<p>Arrium’s operations dominate Whyalla. The steelworks and mining operations employ around 3,000 people or <a href="http://www.theaustralian.com.au/business/arrium-administration-help-on-hand-for-whyalla-steel-workers/news-story/e792daea1ada422b2c5955eeca0fcbef">about 25% of the total workforce</a>. By my calculations, if both close, the flow-on impacts of up to 6,000 additional job losses would be devastating for the region. Unemployment in the steel town would rise sharply from 7.4% to be among the highest in the nation. The only force preventing that would be rapid depopulation. </p>
<p>Arrium, our last remaining steel manufacturer, is <a href="http://www.telegraph.co.uk/business/2016/04/07/closure-of-tata-steels-port-talbot-could-trigger-20-years-of-une/">not the only steel producer in the world</a> facing the threat of closure. One of the drivers of this in some jurisdictions has been the dumping of cheap steel by major competitors including China. The US was recently forced to <a href="http://www.wsj.com/articles/u-s-imposes-266-duty-on-some-chinese-steel-imports-1456878180">introduce duties to curb this practice</a>. Pressure on the Australian government to do the same, promoted the federal government to initiate and<a href="http://www.adcommission.gov.au/Pages/default.aspx">inquiry into dumping of steel in industry</a>. The results of that inquiry are urgently needed now.</p>
<p>Behind the scenes frantic discussions are taking place between the federal and state governments to come up with a solution. They have to test various propositions with the voluntary administrators who in turn will be in perpetual discussions with the banks. Creditors need to be convinced that a viable plan for the operations is available. So to do the federal and state government if there is any prospect of a government financial contribution to restructuring the operations. </p>
<p>The state and federal governments could, for example, make a contribution to upgrading ageing blast furnaces. A national agreement between the federal and state governments to procure only Australian standard certified steel could be put in place to instil confidence in creditors. </p>
<p>While this is all unfolding in South Australia, it is emblematic of a wider problem facing Australian manufacturing in the 21st century, the need to rapidly modernise the sector and adopt national policy settings that recognise Australian manufacturers are not playing on level playing fields.</p>
<p>This necessitates industry plans and policy that recognise these realities as well as a national commitment to the centrality of knowledge intensive manufacturing in advanced economies. While some steps in this direction <a href="http://www.innovation.gov.au/">have recently been made</a> we are regrettably not the driver of innovation that we need to be 2016.</p><img src="https://counter.theconversation.com/content/57475/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>John Spoehr does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Any job losses from Arrium’s Whyalla Steelworks would be another blow to the manufacturing sector and South Australia’s economy.John Spoehr, Director, Australian Industrial Transformation Institute, Flinders UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/574362016-04-08T03:10:44Z2016-04-08T03:10:44ZArrium’s collapse shows Australia must get a lot smarter about steel<p>Steelmaking has a future in Australia, but only with new business models and technologies. Arrium, <a href="http://www.afr.com/business/manufacturing/focus-now-moves-to-arrium-breakup-20160406-go0cp0">if it survives its administration</a>, must develop “smart specialisation” strategies that meet the demands for steel products in growth industries in Australia and internationally. </p>
<p>The first thing to recognise is that steelmaking is a global business, and Australia is a bit player. However, it is an important component of our <a href="https://theconversation.com/australias-five-pillar-economy-manufacturing-40639">advanced manufacturing capability</a>, and the transition to a more diversified, high value adding post-mining boom economy.</p>
<p>Over 60% of steel production takes place in China, India, Taiwan and South Korea. Many of these global businesses produce far more than the combined output of Australia’s steelmakers, creating substantial excess capacity. These countries also manufacture what could be referred to as “commodity steel” - steel that is mass produced for use in areas such as construction, infrastructure and shipbuilding. </p>
<p>Mass production can generate economies with lower costs of producing and lower prices. As global businesses have got bigger, Australian producers have found it difficult to compete in this market, though there are some important research <a href="http://www.bajc.org.au/about-us">collaborations</a> between Australian universities and the large global steelmakers. </p>
<p>Smaller businesses in the steel production industry, like most areas of manufacturing, must shift focus from commodities to a technology intensive and digital strategy. This approach is no longer just to keep costs down but to increase quality, design and innovation. It places an emphasis on what consumers want.</p>
<p>These businesses are developing <a href="http://www.howardpartners.com.au/assets/digital-steel-final-2012..pdf">smart specialisation strategies</a> that embrace the use of knowledge and technology to enhance production, performance and the embedded value of manufactured products, as well as re-configuring business processes and transforming the way business is done. <a href="http://www.bluescopesteel.com.au/">Bluescope</a> has achieved considerable international success through its Colorbond(c) product range. Areas of current and potential competitive advantage for steel include advanced manufacturing, defence, renewables and medical technologies. </p>
<p>Arrium is both a miner and a steelmaker. It would appear from its <a href="http://www.arrium.com/%7E/media/Arrium%20Mining%20and%20Materials/Files/Results/1H16%20Results%20Presentation%20FINAL%20170216.pdf">February Report for the first half of 2016</a> that its immediate problem is on the mining side, due in large part to the decline in iron ore prices. By contrast, the outlook for the steel division was painted in a very positive light. It was only the Whyalla operation that was reported as dragging the business down.</p>
<p>The longer term problem is that Whyalla would appear to be locked into the commodity steel business. No matter what the improvements in work practices, rail infrastructure and anti-dumping provisions, it should have been recognised that this is a strategy with no prospects. </p>
<p>According to <a href="http://www.afr.com/business/manufacturing/arrium-defiant-as-it-surrenders-to-creditors-20160407-go0omy">most commentators</a> , Arrium should have been re-positioning its business model as part of a planned transition out of raw steel making at Whyalla. Yet Arrium remained committed to business as usual. In February the company reported in relation to its steel division: </p>
<ul>
<li><p>A strong lift in earnings in difficult external conditions, though Whyalla had an operating loss of A$43 million for the period, together with cost reductions, productivity improvements and lower raw material costs. </p></li>
<li><p>A forecast of domestic demand increasing by 5% per annum over the period 2015-16 to 2017-18, with a solid pipeline of new construction projects, particularly high rise residential and public infrastructure.</p></li>
<li><p>A significant number of favourable anti-dumping decisions covering reinforcing bar from China, rod in coil from China, reinforcing bar from Korea, Singapore, Taiwan and Spain, with further applications being considered. </p></li>
</ul>
<p>Clearly, the banks were not impressed by this optimistic market outlook with an unchanged business model, and they may have viewed the losses in the mining business as simply overwhelming. Is this another case, like Dick Smith, where the banks moved early in an endeavour to secure their assets? Or perhaps they lost their patience? </p>
<p>But it might also be the case that Arrium has been prevented from investing in the modernisation and transformation of its steelmaking business by the short-term attitudes of shareholders and institutional investors. There would seem to have been little appetite for investing in steel growth areas and value chains, compared with the <a href="http://www.afr.com/business/mining/iron-ore/arriums-rude-awakening-20140915-jevy8">iron ore play</a> , and a shortage of necessary skills and capabilities. </p>
<p>Around the world, businesses are transforming and specialising in niche markets and products where there is high demand. Sweden, for example, is only a small steel producer but has built a global reputation in high quality specialist steel products, including tool steel, high speed steel, ball bearing steel and carbon steel. </p>
<p>It is important to recognise that many Australian steels are world class, which allows a broad range of steels to be used in fabrication work. There are also benefits to be realised by combining structural steels with high strength concrete. Australia leads the world in the production and utilisation of cold formed steel, steel decking and coated steels. </p>
<p><a href="https://theconversation.com/five-things-about-innovation-australia-can-learn-from-other-countries-50966">Public policy</a> has a part to play in facilitating this transition for the steel industry through the development of management and innovation capability, opportunities for research collaboration and local participation in large infrastructure projects. </p>
<p>The Government’s <a href="http://www.innovation.gov.au/page/agenda">National Innovation and Science Agenda</a> is not supposed to be just about startups but industrial transformation. Steelmaking, like manufacturing generally, should not be written off. It is critical to Australia’s technology and knowledge-based future.</p><img src="https://counter.theconversation.com/content/57436/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>John Hamilton Howard received funding from the Commonwealth Department of Industry in 2012 to report on ways in which the steel fabrication sector can obtain! greater! access to knowledge generated through research in Australian universities and research organisations in order to drive innovation as the foundation for improved productivity, competitiveness,and energy efficiency.
John is a Director of Howard Partners Pty Ltd, a public policy research and advisory firm specialising in science, research and innovation policy. </span></em></p><p class="fine-print"><em><span>Roy Green does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Steelmakers like Arrium need to move away from commodities and invest in steel products in growth industries.Roy Green, Dean of UTS Business School, University of Technology SydneyJohn Hamilton Howard, Adjunct Professor, UTS Business School, University of Technology SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/574492016-04-07T20:08:42Z2016-04-07T20:08:42ZGrattan on Friday: Banks’ bad behaviour becomes latest pre-election jousting ground<p>Next week Malcolm Turnbull will briefly take one foot off the domestic treadmill for his first visit to China as prime minister, going to Shanghai as well as Beijing.</p>
<p>With a large contingent of Australian businesspeople in his Shanghai audience on Thursday, Turnbull will put his familiar narrative of Australia’s economic transition squarely in the context of its major driver – the changes underway in the Chinese economy. In Beijing he will meet Premier Li Keqiang and President Xi Jinping. </p>
<p>The tensions in the South China Sea, on which Turnbull has been forthright, will be canvassed, but the emphasis will be on shared interests.</p>
<p>Turnbull will play up future opportunities as the two countries grapple with their respective new economic circumstances. But the costs of China’s transition were rammed home this week when the mining and steel producing group Arrium went into voluntary administration, with big job losses a threat. Chinese steel exports have flooded international markets and driven prices down; iron ore prices have plummeted as demand from China has fallen.</p>
<p>Arrium’s plight has raised another political problem for South Australian federal Liberals, who are already hanging out for an announcement that the new submarines will be built or substantially built in their state.</p>
<p>Bill Shorten reacted to the Arrium situation with an interventionist approach, including saying “I, for one, haven’t swallowed a right-wing economic textbook and simply pretended there is no role for government to help with co-operative investment”.</p>
<p>With parliament returning for its special session on April 18, the budget on May 3 and the general expectation of an election on July 2, the political war is presently in a semi hiatus – fire being exchanged, but still short of full battlefield engagement.</p>
<p>This week’s Newspoll, showing the Coalition behind Labor – 49-51% – for the first time since Turnbull became prime minister has had a psychological effect beyond the importance of the actual numbers. Shorten’s performances have a note of confidence; Turnbull is under greater pressure.</p>
<p>On Thursday night Shorten faced a “people’s forum” in Brisbane, where he answered ten questions from an audience of 100 swinging voters. Afterwards 68% said they were more likely to vote Labor as a result of hearing him, 9% said less likely, and 23% were undecided.</p>
<p>In general, Labor tails are up. But the opposition’s hard heads are realistic – they are not predicting Labor will win the election.</p>
<p>Labor is currently better placed than the government in two areas which resonate with ordinary people. In each case Turnbull handed an advantage to his opponent.</p>
<p>Most obviously, Turnbull’s saying last week – in the context of his now-dead state income tax plan – that it would be logical for the states to have sole funding responsibility for government schools was pure gold for Shorten.</p>
<p>Shorten has also got a useful break from this week’s focus on the bad behaviour in the banking sector. Speaking at a Westpac function – a day after that bank was targeted by the Australian Securities and Investments Commission for allegedly manipulating a benchmark interest rate – Turnbull gave bankers generally a sharp lecture about ethics, which have been widely breached.</p>
<p>Turnbull was correct in his criticism of the banking sector’s indefensible conduct but his comments prompted the obvious question: what was he going to do about it?</p>
<p>The government rejected the calls – including from its own backbenchers John Williams and Warren Entsch – for a royal commission. This allowed Shorten to respond with the line that “I think Australians are sick of politicians who talk tough and do nothing”.</p>
<p>Shorten is moving towards proposing a royal commission – which would focus on the culture in the financial services sector, not on issues of stability, because that is not in question.</p>
<p>One would think that would be popular with voters. The government is likely to counter by promising more resources to the agencies overseeing the sector.</p>
<p>Both sides are now looking to their tactics for the special session called for the Senate to consider the Coalition’s industrial relations legislation. What’s been heard from the crossbenchers this week has not raised any serious prospect of success for the bill to resurrect the Australian Building and Construction Commission (ABCC). </p>
<p>The government won’t meet the demand from some crossbenchers for a wide anti-corruption body, although recent revelations of various rorts and scandals have made its case against less simple to run.</p>
<p>The optics and political dynamics of the three-week session will be important. The government wants to have the House of Representatives, which has little work to do, sitting for as short a period as possible, minimising the number of Question Times.</p>
<p>There has been speculation that those opposed to the industrial relations legislation might try to frustrate the Senate’s proceedings. Liberal Democrat David Leyonhjelm told the National Press Club that “if Labor moved a motion on the 18th or 19th of April to adjourn the Senate until 3 or 10 May, I reckon most of my crossbench colleagues would support it”.</p>
<p>But senior Labor sources predict a normal debate, saying the opposition won’t be disruptive – unlike on the extraordinary “pyjama night”, when the Senate debated voting reform. Then, Labor was on the losing side; in the ABCC debate it is expected, on present indications, to have the numbers to defeat the legislation.</p>
<p>If Labor sticks to this strategy, the Senate may need well under the allocated three weeks to consider the legislation. With the government, Labor and the crossbench now believing that they are headed for a July 2 election, all players have an interest in minimising the days they spend in Canberra, to maximise the time they are on the ground for campaigning.</p>
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<p class="fine-print"><em><span>Michelle Grattan does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Next week Malcolm Turnbull will briefly take one foot off the domestic treadmill for his first visit to China as prime minister, going to Shanghai as well as Beijing.Michelle Grattan, Professorial Fellow, University of CanberraLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/574142016-04-07T20:07:14Z2016-04-07T20:07:14ZA grim future for Arrium, Ford and Queensland Nickel workers?<figure><img src="https://images.theconversation.com/files/117809/original/image-20160407-10027-1cjbzqy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Whyalla Steelworks, where workers might lose their jobs as operator Arrium goes into voluntary administration.</span> <span class="attribution"><span class="source">Wayne Thomas/Flickr</span>, <a class="license" href="http://creativecommons.org/licenses/by-nc-nd/4.0/">CC BY-NC-ND</a></span></figcaption></figure><p>The <a href="http://www.oecd.org/employment/back-to-work-australia-9789264253476-en.htm">OECD</a> report Back to Work Australia makes some grim predictions for workers who lose their jobs. That is the potential threat facing some 7,000 Arrium employees, those at Queensland Nickel and Caterpillar in Tasmania, and next year, workers in Ford’s plants in Geelong and Broadmeadows, Victoria.</p>
<p>The report was released just before the announcement that mining and materials company <a href="http://www.afr.com/business/manufacturing/focus-now-moves-to-arrium-breakup-20160406-go0cp0">Arrium is going into voluntary administration</a>. The company operates the Whyalla Steelworks in South Australia, a state hit hard by the <a href="https://theconversation.com/moving-on-holden-closure-shows-we-need-a-new-growth-agenda-21360">closure of Holden’s vehicle manufacturing plant</a>.</p>
<p>The OECD report says Australia faces a high incidence of job loss due to plant downsizing or closure (at 2.3% of the workforce per year). Based on analysis of data from the <a href="https://www.melbourneinstitute.com/hilda/">Household, Income and Labour Dynamics in Australia (HILDA) Survey</a>, the OECD suggests that 30% of those who lost their jobs in recent years were still unemployed after 12 months and another third had moved into to less well-paid and less secure employment. </p>
<p>Surprisingly the OECD sees this as suggesting Australia’s “flexible” labour markets are “rather successful at providing new jobs relatively quickly”. However, HILDA data is unlikely to capture the outcomes of workers in concentrated large-scale closures, so this may underestimate the magnitude of the problem. </p>
<p>The OECD also notes that Australia’s spending on labour market programs is weak by international standards, at a modest 0.01% of GDP (compared to say Denmark’s at 0.98%). It finds that social stigma makes job seekers unwilling to access employment services, that the <a href="https://www.employment.gov.au/jobactive">jobactive</a> framework discourages training and that the payment system to providers rewards short-term placements that lead to labour market churning. </p>
<p>The report questions the utility of targeted labour adjustment programs such as the Structural Adjustment Fund that assisted South Australia’s<a href="https://theconversation.com/mitsubishis-silver-lining-for-holden-workers-21425"> Mitsubishi</a> workforce in 2004. After reviewing these programs the OECD concludes that in Australia labour adjustment programs:</p>
<blockquote>
<p>“coverage is arguably inequitable and potentially wasteful as it provides automatic access to employment services to all displaced workers in a particular sector or region, irrespective of whether the worker needs help, while excluding other displaced workers who have an equal or greater need for such services merely because they were employed in different sectors or regions.” </p>
</blockquote>
<p>The OECD recommends that Australia move away from targeted assistance programs for large-scale closures towards a universal approach covering all sectors of the economy, with the intensity of intervention “varying according to the workers’ needs”. </p>
<p>This recommendation underplays the benefits of targeted labour adjustment assistance. If a plant closure releases hundreds or thousands of workers with similar skills into a small local labour market, the competition for work is concentrated and intense. Many workers will be forced to accept jobs in new occupations – often with a loss of pay, seniority and skill. Some will have to retrain or relocate to places where there are more opportunities. </p>
<p><a href="https://theconversation.com/moving-for-work-not-the-panacea-the-government-seeks-29745">Relocation</a> is not an option for everyone. Programs need to be targeted to local circumstances. </p>
<p>If job losses eventuate in isolated Whyalla, there will a greater demand for relocation assistance than, say, for Ford workers in Geelong, where workers can potentially access the greater Melbourne labour market. In addition, local labour adjustment programs make it possible for local organisations to contribute to revitalisation efforts. </p>
<p>Payments are made to people undertaking retraining help to maintain the demand for services in affected regional economies. Targeted assistance is not wasteful because the workers who do not need assistance do not access assistance. </p>
<p>There are economy-wide benefits from labour adjustment programs. Less skilled workers tend to search for work in their local area, while highly skilled workers might look to national or global opportunities. </p>
<p>How successful their search is depends on individual skills and attributes, household responsibilities, and the play of wider processes of labour supply and demand. Because there are so few suitable job opportunities for them, the workers whose careers are most damaged by large-scale closures are likely to be highly skilled and specialised workers with long tenure with one employer. The value of these workers’ skills to the economy warrants investment in preserving their skill base. </p>
<p>The OECD recommends establishing local pilot schemes for intensive employment services, increasing employers’ responsibilities in retrenchment by demanding longer notice periods and mandatory Centrelink notification, and instituting policies that encourage firms to limit dismissals during temporary downturns. It also advocates better research follow-up of retrenched workers’ outcomes. </p>
<p>These are all positive steps. Sadly, however, the OECD does not suggest offering employer incentives to stimulate demand for the labour of retrenched and other jobless workers.</p><img src="https://counter.theconversation.com/content/57414/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Sally Weller's labour market research has been funded by the Australian Research Council and the Victorian Government</span></em></p>The outlook is not good for those who may lose their jobs as a result of mining company Arrium going into voluntary administration, according to the latest OECD report.Sally Weller, Australian Research Council Future Fellow, Monash UniversityLicensed as Creative Commons – attribution, no derivatives.