SUBJECT: The future of the Alcoa plant in Geelong  



RAFAEL EPSTEIN:   Alcoa and its future in Geelong has been up and running as an issue for the last twenty-four hours. There are six hundred people who work at the plant there, whether or not they have a future. Bill Shorten is the Minister for Employment and Workplace Relations and the Minister for Financial Services and Superannuation, and he joins us just now to discuss what the Government might or could do.

Good afternoon, Minister.

BILL SHORTEN:  Good afternoon.

RAFAEL EPSTEIN:   I want to read you a quote from the Alcoa CEO Alan Cransberg in The Age. He says that we're losing money now and there isn't a carbon tax in place, but obviously as we look at the future of the plant and creating a sustainable future, carbon will be an additional burden that we'll have to overcome.

Isn't it still the case that it is an extra cost for business to take part in an emissions trading scheme?

BILL SHORTEN:  Oh let's not engage in - let's not fall for Tony Abbott's mischief making. I used to be the union rep who looked after Alcoa Point Henry for fourteen years. I've probably been there more times than most politicians, certainly Liberal politicians.

The issue affecting Alcoa Point Henry is the high dollar. It's the high dollar.  Alcoa Global, they were in Pittsburgh, now in New York, very clear that this review and the future of Point Henry is to do with the high dollar. So let's not start looking for a false...

RAFAEL EPSTEIN:  Okay so if - let's accept the premise. If it is the high dollar and I think there's also a big issue with low - dropping prices.

BILL SHORTEN:  Yes, that is exactly...

RAFAEL EPSTEIN: So is there anything the Government can do?

BILL SHORTEN:  Well, I've spoken with the union today. I know that the Government's talking with Alcoa, I understand they are, at least. The issue which we would hope is that this site has been there since 1969, the workforce have been a very productive, industrial, harmonious workforce with collective agreements. They are very productive, they moved to annualised salaries. So I think the workforce has done what it can. The question is, when will the dollar go down? Now I - we would put the case to Alcoa...

RAFAEL EPSTEIN:  Well it's not going to go down for a very long time, is it?

BILL SHORTEN:  Well I don't know when you know it's going to go down, and if you do you'll make a killing.

RAFAEL EPSTEIN:  I think the Prime Minister said yesterday that it's going to remain high for a while.

BILL SHORTEN:  Oh yeah, it is [indistinct 02:24] remain high. Our case to Alcoa would be that when the dollar comes down, you've got a very profitable plant. So the question is, how long will Alcoa take a holding position and how long will it take for the dollar to fall?

The other issue here which has made this unusual compared to previous challenges for Alcoa Point Henry is that normally when the dollar is up, the price of metal goes up. But the London Metals Exchange, the LME, which is the guide for prices, has been falling as you identified just a few minutes ago, so…

RAFAEL EPSTEIN:  Isn't this really a call by them for a continuation of the subsidy for their electricity?

BILL SHORTEN: It could be. Electricity is the single largest - it's the single largest negotiating item they've had with state governments.

RAFAEL EPSTEIN: How likely do you think it is that they want it to continue beyond - I think the subsidy runs out 2016 - how likely do you think that is driving this...

BILL SHORTEN: No it'd be - if I thought it was just simply a bargaining ploy to maintain subsidised electricity, to some extent I'd be relieved, but the indications I get is that our dollar means that - and the falling price means that - and this is a result of the mining boom. Our mining sector is doing well, but our downstream manufacturing has been hammered by the high dollar.

RAFAEL EPSTEIN: Yes.

BILL SHORTEN:  Now, I would hope that Alcoa takes a long term view rather than a short term view and that they understand that there are eventually movements in currency.

RAFAEL EPSTEIN: I suppose that's the difficulty for you. You've got a - you talk to people about a restructuring economy, or a two-speed economy. I just want to play thirty seconds from Ian Heinrich, an Alcoa worker for twenty-five years. The sorts of difficulties you're facing as a government, because when manufacturing jobs go, these are the sort of stories you need to deal with.

[Excerpt of interview]

IAN HEINRICH:  I've been here twenty-five years. I think this is about all I know. I'm forty-nine years old, fifty years old this year so I don't like my chances of getting a job anywhere else. I mean you're packing up your family and you're moving interstate, and you're probably - and you're starting a new job from scratch. You know, I'm fifty years old, is there going to be someone that's going to employ someone that's fifty? It'd be very hard, it's a hard decision to make.

You've got your friends and people you've worked with for twenty-five years. I mean when you work shift work for twenty-five years your closest friends are on the shift you work.

[End of excerpt]

RAFAEL EPSTEIN:  That's Ian Heinrich who's worked at the Alcoa plant. You've had no net jobs growth last year, which I think Joe Hockey pointed out is the first time in twenty years. No net job growth for last year and you have people like this facing - that's what the restructuring of the economy sounds like. What can you say to people like that?

BILL SHORTEN: Well, first of all, I'm sympathetic. I know a lot of those men and some women. I'm sympathetic and what does that translate into? Alcoa production operators are highly skilled and they're very hard working. So having that on your CV means that you are employable. You're a person with experience.

The second thing I'd say is that employers need to understand that the workforce is getting older and that perhaps the traditional attitude that only a young pair of arms and legs is all you want in a future worker, I think employers need to re-evaluate their view of older people...

RAFAEL EPSTEIN:  Look Minister I appreciate you're saying he's got a decent CV but he doesn't want to move and it's unlikely for there for be new manufacturing in Geelong.

BILL SHORTEN:  Well no, first of all what I'm saying is that he is a capable fellow. Secondly we need employers to change their attitudes towards older workers. Thirdly we need to have - and thank goodness it's us in power, not the Liberals - we are spending literally billions of dollars in retraining older workers. But at this stage, that chap will not be wanting to hear about the future, he just wants to know if his job is still going to be there now and that's where our focus is.

That's where I think - in the future, all of us are going to have eight or nine jobs in our lives. So we've got to put skills in - we've got to do something to help a chap like that now.

RAFAEL EPSTEIN:  Quickly Minister, because I do want to give people a weather update, but in thirty seconds, what are you going to say in response when voters say to you, listen, you didn't make any extra new jobs last year?

BILL SHORTEN:  Oh if you look at the amount of work Australians worked in 2011 compared to 2010, we are working the equivalent of ninety-six thousand extra full time jobs. We're working more than we did in 2010. Secondly, have a look at the rest of the world. We've added seven-hundred-and-fifty thousand new jobs since 2007, the rest of the western world shed thirty million. The third thing is, in 1992, which Mr Hockey compares to, unemployment was eleven point - it was eleven per cent, it's five-point-two. We're doing better now than we were twenty years ago, we're doing better than the rest of the world and we'll keep trying.

RAFAEL EPSTEIN:  Bill Shorten, Minister for Employment Workplace Relations, Financial Services and Superannuation, what a mouthful. Thanks for taking the time.

BILL SHORTEN:  Thanks mate, bye.

RAFAEL EPSTEIN:  Bye, bye. Thank you for him making time on a short day and before we get to...