Julia Gillard's appeal to factory floor

• by: Matthew Franklin and Barry Fitzgerald
• Additional reporting: Sophie Gosper
• From: The Australian
• February 09, 2012 12:00AM

Julia Gillard has dramatically shifted Labor's economic narrative to reconnect with blue-collar Australia, insisting her job is to run the economy "in the interest of working people" and accusing the Coalition of favouring the rich.

The Prime Minister has also pledged indefinite taxpayer-funded backing for car manufacturing and sought to undermine Tony Abbott's blue-collar support by accusing the Opposition Leader of wanting to "chuck overboard" jobs in the troubled sector.

Ms Gillard's factory-floor pitch came yesterday amid new evidence of pressure on manufacturing from the high value of the Australian dollar, with Alcoa announcing a review into the future of its Point Henry aluminium smelter at Geelong, raising doubts about its long-term viability and the jobs of 600 workers.

The news sparked a claim by Mr Abbott that Labor's $23-a-tonne carbon tax, to be introduced on July 1, would make matters worse. Ms Gillard described the argument as a "disgusting" example of his preparedness to scaremonger about jobs. But Alcoa managing director Alan Cransberg confirmed that the carbon tax would increase pressure on his company, although it did not prompt the review. "Obviously post July 1 that will make life more difficult for us," he said. "Post July 1 we have obviously got another challenge to overcome and we're very keen on doing that."

Mr Abbott stood firm in the face of Ms Gillard's attack, declaring that if the Prime Minister was serious about protecting manufacturing jobs, she would dump the carbon tax. Despite Ms Gillard's description of Mr Abbott's comments as disgusting, Alcoa's Mr Cransberg said the tax would hurt business, although it was not the cause of the review of the Point Henry facility.

After pressure on manufacturing over the past year, it has been a rough start to this year for thousands of workers, with at least 3700 lay-offs announced since January 1, most in the financial and manufacturing sectors.

While job losses have poured misery into Labor's electoral heartland for months, the government's economic narrative for the past year has focused on Wayne Swan's demand for credit for Labor's record in protecting Australia from the worst effects of the global financial crisis.

During the same period, Mr Abbott has pillaged Labor support by visiting dozens of factories and worksites across the nation to warn that the carbon tax will kill jobs. Yesterday, as Alcoa said the soaring dollar was among factors that had rendered the Point Henry operation unprofitable, Ms Gillard shifted tack, meeting car industry workers in Canberra and declaring she was "all ears" about how to protect their jobs.

Accusing the opposition of standing for privileged interests by proposing to dump Labor's new mining tax, she said: "We, unlike Mr Abbott, believe that the economy should be run in the interest of working people, that we should have a diverse economy for the future, that manufacturing should take its part and that the car industry needs to be part of that. "You've got to be running the economy for a purpose, and the purpose is to serve the needs of working people so they can have jobs, they can have opportunity, they can have prosperity."

The Prime Minister also plugged the $36 billion National Broadband Network into the economic argument, saying there was no point in asking Australian businesses to compete using "yesterday's tools".

And she aggressively rejected questions about the long-term future of taxpayer-funded subsidies for carmakers, justifying her government's "co-investment" policy by arguing the skills and technologies available in the automotive sector were critical to the nation's entire manufacturing base as well as the maintenance of 46,000 direct jobs and 200,000 indirect jobs.

"The economic decision for the government is about whether that is worthwhile, not only in terms of direct jobs, but the supply chain and the skills and capacities and innovation that comes with it for the rest of manufacturing," she said, accusing the Coalition of failing to commit to subsidies beyond 2015 and of plans to cut $500 million from assistance.

After savaging the Coalition over inconsistency among its economic spokesmen over when a Coalition government would return the federal budget to surplus, Ms Gillard then ridiculed its attempt to initiate a debate about Labor's role in sparking an ugly protest by indigenous activists on Australia Day.

While she wanted to discuss the economy, the Coalition had nothing to offer but "a stream of abuse", Ms Gillard said. "(Mr Abbott) knows that if we are debating the economy in this chamber, he will lose."

Mr Abbott said the Coalition was proposing to deliver the same level of car industry assistance as existed under the Howard government. "I want a strong, viable car industry in this country and the best thing you can do for the car industry in this country is stop the carbon tax," he said.

Turning to the Alcoa announcement, the Opposition Leader said that without a carbon tax, Alcoa would be "in a much better position". "The carbon tax is an additional substantial cost to an operation which is already losing money and I say to the Prime Minister: If you are serious about protecting the jobs of the manufacturing workers in this country, scrap the carbon tax."

Alcoa's review extends the gloom over the $14 billion aluminium export industry, which is among the nation's biggest carbon polluters and directly employs 17,000 people.
Profitability has been smashed by a slump in aluminium prices, the rise in the Australian dollar and China becoming a net exporter.

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