Monday, February 14, 2011

NSW Parliament debates BHP closure

Digging around for material to write The 1999 closure of BHP's Newcastle steel works I found the 22 September debate in the NSW Legislative Assembly marking the closure of the BHP steel works. Given that I am writing a fair bit on Newcastle and Hunter issues at the moment, I thought that I would repeat a few of the comments.

Mr CARR (Maroubra - Premier, Minister for the Arts, and Minister for Citizenship) [4.17 p.m.]: I move:

That this House recognises the significance of the closure of BHP on 30 September to the Hunter community.

The Premier continued:

Moving the motion gives me the opportunity to spell out the different attitude taken to the problems of the region by the Labor Government and that taken by conservative governments. Opposition members voted against this matter being discussed. They do not want regional issues discussed. Indeed, the Opposition has no members from the Hunter to join in the debate. Our approach as a Government following the decision of BHP to get out of integrated steel making was to move in to assist in the growth of new jobs.

That is why we established the $10 million Hunter Advantage Fund. I can report to the House - it is a message of optimism and buoyancy for the Hunter - that in 2½ years the fund has assisted no less than 25 companies. Businesses locating or expanding in the Hunter include manufacturers of veterinary pharmaceutical products, electronic components, concrete products, composite wood, clothing and textiles and cleaning products. There is also a tourist leisure park, a boatbuilding firm of excellence, and an aquaculture facility.

....New prospects await the people of the Hunter and there will be difficulties along the way, but with the determination of this Government to go on assisting and working with the people of the Hunter they will seize those opportunities.

Mr J. H. Turner (Myall Lakes - Deputy Leader of the National Party) responded:

The Hunter was considered a backwater by the Government until the closure was imminent. If the closure had not occurred nothing would have been done by the Government. It has done very little in the overall scheme of things and it all seems to centre on Newcastle.

The Premier takes great poetic licence when using the word "Hunter". Very little is being done for the people of the Upper Hunter - in my former home-town of Cessnock or in Muswellbrook, in the electorate of the Leader of the National Party, or in Singleton. What is happening with the Hunter Advantage Fund? Nothing is happening, yet those areas are as equally affected by the BHP closure as are areas in Newcastle.

I am not alone in my comments. The mayor of Lake Macquarie said that areas in Lake Macquarie were affected by the closure of BHP. Let us be clear that when the Premier speaks of the Hunter he is speaking about Newcastle. He is not talking about Gloucester in my electorate, where his policies on the timber industry have seen the same percentage-type drop in employment in that area as they have in Newcastle. No assistance has been given to the shopkeepers and traders in the area that have been affected by it...

All is not lost. Some people have said that with the closing of BHP a crutch has been removed from Newcastle. I was born and raised in Cessnock and I worked in Newcastle. I knew that BHP was always there.

The people of Newcastle used to say, "Don’t worry, we don’t have to do much in Newcastle because BHP is there. BHP will look after jobs, and BHP will always be with us." Of course, a lot of opportunities were lost in Newcastle because the leaders within the community did not really go out to seek the alternatives. With the announcement of the closure of BHP it became obvious that there would have to be a change. That is an issue that is now coming to light and it is one that the Government should be pursuing with a lot more vigour than a Hunter advantage fund, which basically supports only the small number of organisations that the Premier announced in his speech...

The Carr Government is Newcastle-Sydney-Wollongong centric. That is obvious by the emphasis the Premier put on the closure of BHP in leading the first-ever urgency debate that he has contributed to. He is now clearly showing that this Government’s real colours as we know them are Sydney, Newcastle and Wollongong and they will remain that way. In fact, as I understand it, under recent planning announcements those areas are designated as constituting the Greater Sydney area.

It is clear that the industry itself, in the democratic process, is starting to put jobs in Newcastle. I am sure that the paltry amount mentioned by the Premier in the Hunter Assistance Fund would not go too far in encouraging people to come to the area. One member of the Labor Party does not believe that the Premier has done the Hunter proud, and that is the honourable member for Cessnock. An article in the Newcastle Herald of 17 April stated:

      Milkman turned MP Kerry Hickey agrees with his Federal counterpart Bob Horne that the Hunter has been taken for a ride.
      Mr Hickey, elected to State Parliament on March 27, said while his region has helped keep Australia’s economic record on track through the export of coal and production of electricity it has received relatively very little in return.

...Perhaps the Labor Party is developing some honesty when Labor members are actually showing that the Premier’s rhetoric is simply that: rhetoric. They have been taken for a ride. This is a typical Carr smoke-and-mirrors exercise. We know that the Premier has a Minister to assist him on Hunter matters. That Minister is a fine gentleman and I have a lot of time for him, but, as he admitted in the estimates committee hearings, his office is a post box. He has two representatives who look after Hunter matters. The Premier is trying to say what a wonderful place Newcastle is and what a wonderful place the Hunter is, but he has made only a token gesture by providing the Minister assisting the Premier on the Hunter with two employees to look after matters pertaining to Newcastle and the Hunter Valley.

There will be life after BHP, notwithstanding the Carr Government. ... It is a tribute to the Novocastrians that they have been able to rise above the closure of an industry that has been the focal point of their lifestyle and their town for so long and given the people of the Hunter Valley, and particularly Newcastle, job opportunities. However, more assistance needs to be given, more innovative ideas and views need to be developed, and businesses need to be encouraged to establish in Newcastle, particularly the upper Hunter and mid Hunter areas where jobs are vitally important to smaller communities that do not have the assistance package that the Premier has announced for the employees of BHP.

Mr Face (Charlestown - Minister for Gaming and Racing, and Minister Assisting the Premier on Hunter Development) took a more positive view:

Members on this side of the House are going to be positive and look forward. More than any other region in New South Wales, Newcastle and the Hunter have had to re-evaluate their future and discover their new opportunities. With the withdrawal of BHP from steel making and the loss of jobs in the mining industry, State and local government, business, trade unions and the community have joined together to reshape the region’s future. The Hunter now, more than ever, offers strong incentives for business investment, from prime industrial sites such as steel river with a special 28-day approval process to new and exciting agribusiness ventures.

Many of the things that are now occurring resulted from some of the major decisions made in the late 1970s and 1980s by the then Labor Government to expand the economic base of the Newcastle-Hunter region. BHP and Leighton Constructions are in the process of conducting a feasibility study on turning a part of the BHP site into a multipurpose terminal. The proposal is to develop a world-class multipurpose terminal comprising a container terminal, general cargo, roll-on-roll-off terminal and car terminal facility, along with associated industrial and commercial development on the main site of the existing BHP Newcastle steelworks. All of these projects are still in the negotiation stages, but it is possible that they will go ahead and this will be positive for the Hunter Region.

Mr Armstrong (National - Lachlan) wondered why:

There has been no real decentralisation of government departments from Sydney to Newcastle in the term of the Carr Government. No real government project has established in Newcastle or in the Hunter Valley in the term of the present Government. There has been no recognition of the demise or importance of the wool industry in Newcastle, and there has been no replacement industry to replace those traditional wool sales. When Rundles got into trouble, this Government did nothing to re-establishment a manufacturing industry to employ those highly skilled workers in Newcastle and in the Hunter. Nor has there been support from the Government for the wine industry - the fastest-growing primary export industry that this nation has. The Government has ridden on the back of that industry. It has gone to the cocktail parties and openings, but it has not done anything more than put on an annual luncheon in this place for the wine industry.

In a speech marked by an absence of party politics, Mr Gaudry (Newcastle - Parliamentary Secretary) focused on the significance of the change to the people of Newcastle.

Mr Souris (Upper Hunter - Leader of the National Party) was very critical, focusing on the needs of his elctorate:

..I endorse most of the comments that have been made by previous speakers, but I will not repeat them. I will expand on them and emphasise that the loss affects the whole of the Hunter, not merely Newcastle. I do not say that to be disparaging, but to focus the attention of honourable members on the plight of the upper Hunter.

The upper Hunter has lost 2,000 jobs from the coalmining industry. The half-closure of Liddell Power Station, a major base load power station of 2,000 megawatts, has affected 200 jobs. Under the hands of the Labor Government, the electricity distribution network, formerly the county councils and electricity authorities, has been amalgamated. That amalgamation has cost jobs in the upper Hunter, as well as in the lower Hunter. We have seen the closure of timber milling in the upper Hunter at the hands of the Carr Labor Government by a conversion of State Forests land to national parks, which has affected 27 jobs in the town of Muswellbrook.

Aberdeen abattoir has recently closed, with a loss of 400 jobs. In listing those job losses, I am pointing out that the impact on the upper Hunter, which has a lower population, is far greater than the impact of the closure of BHP on the lower Hunter. On top of that, the upper Hunter is facing more cuts. The Hunter needs a lot of help. I ask the Carr Government to similarly consider the job losses in the upper Hunter and the need for a one-off capital stimulation of approximately $10 million, the same amount that was associated with the BHP stimulation package. After all, on a per capita and area basis the impact is greater on the upper Hunter than on the lower Hunter.

At the moment there are threats of budget cuts at the hands of the Carr Labor Government. Muswellbrook and Scone police stations are facing the loss of one night of 24-hour policing. The Explorer night service - the XPT replacement train which carried a night service through the Hunter to a destination at Armidale and Moree - has already been cancelled. It is virtually the first thing the Carr Labor Government did when it took office.

The Carr Government has dropped the extension of the F3 motorway to at least Branxton, which would connect with the New England Highway north-bound to Brisbane. That project mysteriously disappeared from the integrated transport concept, the vision book that was launched with great fanfare by the Carr Government just prior to the election. Singleton police station was promised 24-hour policing. That is a broken promise. Recently, the Government announced the closure of the National Parks and Wildlife Service regional directorate at Muswellbrook. That new building, purpose-built for the job, was opened with great fanfare by the former Minister for the Environment and the Premier. They were at Muswellbrook for the Australian Labor Party State Country Conference. The highlight of the conference was the official opening of the new directorate. It will be closing shortly.

Other losses are: the closure of the Department of Land and Water Conservation directorate; 22 jobs at railway stations and signalling areas, particularly in Singleton and Muswellbrook; and the threatened and imminent loss of 67 jobs in the TAFE system, at a cost of $200 million in the Hunter Valley alone. Recently we have also endured the loss of operating theatre times at Singleton, Muswellbrook and Scone hospitals. All of these cuts have occurred under the Carr Government, on top of the job losses, which are greater per capita than the job losses in Newcastle.

By contrast, Mr Bartlett (Labor - Port Stephens) took a nostalgic look at the life that was now ending.

In the time available to me I will have a nostalgic look at the closure of BHP and the way of life in Newcastle. The BHP of my childhood brought a rhythm of life to the Newcastle community. A change of shift saw huge numbers of men and women pass through the gates onto the ferries and punts. In the early 1960s I lived in Stockton, and BHP probably had 12,000 employees in its work force. The work was hard, often hot and dirty, and overtime shifts generated that little extra for mum and the kids. Shiftwork was the order of the day, and every child in Stockton knew that the noise level had to be kept down because a neighbour was on shift.

Every woman knew that the washing lines needed to be wiped before hanging out the washing, as the dirt and grit would be everywhere and the clothes would have a black line on them if a bit of the clothesline was missed. In some weather conditions, especially a westerly, the wind blew the smoke from the BHP stacks over Stockton, carrying the stench and grit. On those occasions the washing was not hung out. My neighbours, Reg and Flora Maund, used to say how lucky we were to live in Stockton because the westerly only blew for a maximum of three months a year, and the rest of the year the muck blew over Newcastle.

Mr Kerr (Liberal - Cronulla) spoke of the efforts that Labor Premier Neville Wran had put into developing the Hunter. I don't know the history here, so I am repeating the comments in full:

The honourable member for Lachlan talked about the history of BHP and the opportunities this Government has missed. It is appropriate to talk about the history when one looks at the impact on the Hunter that this closure will have. In Mike Steketee’s biography of Neville Wran the author had this to say about the former Premier’s efforts:

      Whereas the proposed coal loader at Botany Bay would have been privately financed, the Government now had to find the funds for the new loader and this subsequently led to union demands that a third coal loader at Kooragang Island in Newcastle also be publicly owned. The decision also raised a major problem of how coal from the Burragorang Valley, south-west of Sydney, and the western fields around Lithgow, would be transported to the Port Kembla loader. It is a problem the Government still has not resolved, even though the loader was commissioned in 1982.
The author went on to say:
      Poor Government decision-making was a major factor in the problems that beset the export coal industry in 1982 but it was only one factor. Bastardry by trade unions also played a large part. Strikes during the construction of the Port Kembla coal loader delayed its completion for more than a year and added $60 million to its cost. Construction of a third loader at Newcastle was delayed by nearly three years because of union demands that it be publicly owned. These delays, together with other stoppages by coal-mining and rail unions, led to quotas being imposed at both Newcastle and Port Kembla ports. At one time in 1982 there were 60 ships, which the Opposition dubbed "Wran’s navy", queued outside NSW ports waiting to load coal.
The tragedy is that the foundations for the prosperity of the Hunter could have been laid down at that time. Neville Wran’s biography also contains the following interesting paragraph:
      Wran’s confrontation of his critics had now become a personal mission. He saw the transformation of the economic fortunes of Newcastle and the Hunter Valley as one of the lasting achievements of his administration, one of the things for which he would be remembered. He was bewildered that there was so much opposition to developments which would bring jobs to a region which had previously feared for its future. He was particularly stung by that fact that much of the opposition, particularly within the ALP, came from those with secure jobs, often in the public sector and the universities. He was genuinely puzzled by the criticism of part of the trade union movement in Newcastle, led by the left-wing Trades Hall Council, and found it difficult to reconcile their opposition with their professed concern for working men and women.

I make the point that the vision was stymied at that time by pure bastardry by individuals. That must not happen again. Honourable members today have paid tribute to the role of BHP during the course of its stewardship of the steel industry. One honourable member said that his father had told him to get a job at BHP because that had been good enough for his father and grandfather. That happened in a number of generations.

The honourable member for Port Stephens, who spoke immediately before me, mentioned BHP’s creditworthy role in supporting the work force and how that contrasted with the overseas experience.

Of course, there needs to be a vision. Newcastle recovered from the earthquake because of its comradeship and its courage. Duplication of the rail line between Newcastle and Sydney is needed. Williamtown should become a freight airport. The Newcastle port should be a container port. There is a need for this integration, given the maritime facilities and rail and road junctions in the area. There is enormous potential. As various members have stated, the new high-tech industries can go to the Hunter. It has the richest hinterland in Australia and enormous tourism potential. A former member, Mr Morris, has entered the Chamber. He made a great contribution to the Hunter and will continue to do so. I remember particularly the apprenticeship scheme and other schemes implemented by Mr Morris that have benefited the Hunter, a region that would have been much worse off without them.

I leave it to my Hunter readers to comment on the debate in light of the position today.


Mark said...

As for these cold parliamentary records, hindsight is a beautiful thing!

Older members in my family also speak fondly of nifty Nev. They say that he was the last state premier that tried genuine decentralisation. The company I worked for at the time nearly folded due to the BHP closure but mining related industries have become the new bread basket for that firm now.

If only the die hard Labor voters of the area could read your post Jim and compare this debate with the one about to be played out before the March election.

Jim Belshaw said...

Interesting comment, Mark. I was struck by the comment on Neville Wran. I must read the book.

I have just posted on the possible seat outcomes in New England. With so much happening at present I am struggling to keep up!

Greg said...

Jim, this made interesting reading.

There are a number of watershed moments in the history of Newcastle and the Hunter.

The opening of the BHP in 1915 was one of those watershed events. By the 1930's it was producing some of the best quality and cheapest steel in the world. In it's heyday it employed over 12,000 people making specialized steel products for world markets and providing direct employment to perhaps one quarter of the city's workforce. Everyone had a friend or family member who worked there. The impact of the BHP on Newcastle life cannot be overstated.

Another watershed was the earthquake. A common misconception is that the city recovered well from that event. Far from recovering it brought the CBD into sharp and decline and this continues to this day. Many buildings were damaged including some notable buildings that were beyond repair requiring demolition. As a result the CBD lost many business that relocated to the suburbs. Before the earthquake the CBD of Newcastle was a thriving and bustling place. In the years since it has declined to a forlorn and desolate shadow of it's former glory. The latest nail in the coffin was the withdrawal last month of David Jones from the CBD to an expanded Kotara store which leaves the CBD without a single notable retailer.

Another watershed moment was of course closure of the BHP. The city has coped remarkably well with the transition from steel and heavy industry to engineering and services. This was largely due to the fact that this was more a transitional event happening over several decades than people realise. By the time the BHP had closed it was employing only about 2000 people and the city was already well on the path to change. The city's air quality improved immediately and most displaced employees found other work in engineering.

There are a few other things that did stand out. One was the promise of a container terminal and car roll on roll off terminal. This never eventuated with the car terminal going to Port Kembla (so I understand) and a second container terminal going to Port Botany. Another was the loss of wool as an important commodity through the port of Newcastle. The port is now almost exclusively dedicated to coal which comprises 95% of the tonnage. Another is the lack of government departments located in the city. Newcastle has become very much a branch office where most of the decisions that affect it are made in the parliamentary chambers and boardrooms located in Sydney.

Newcastle has undergone some very great changes in recent decades - some good some disastrous.

Jim Belshaw said...

That's fascinating stuff, Greg. I can use it in multiple directions!