Hunter Manufacturing

The Hunter has a proud history of manufacturing. The manufacturing sector has played an important role in the development of the Hunter mining industry as well the development of other sectors of the local economy. BHP certainly played a central role in the development of greater Newcastle—including my electorate of Charlestown—as New South Wales's second-largest city and an economic powerhouse of the State. Although BHP no longer has a presence in the area, manufacturing continues to dominate the local economy. According to the Hunter Research Foundation, manufacturing accounts for 9 per cent of employment in the Hunter—which is higher than the statewide average, and almost double the number of jobs in the region's mining sector.

The quality of manufacturing in the Hunter is put on display each year at the Hunter Manufacturing Awards. Past winners of those awards include BAE Systems, Mortel's Sheepskin Factory, Downer EDI and OneSteel. Nationally, almost 900,000 people are employed in some form of manufacturing. Based on the last census, around 3,000 residents—or 8.6 per cent of the Charlestown electorate—work in manufacturing. They join thousands of others from the Hunter region who share their workshops and factories. I was very sad to hear today of the announcement of the closure, by 2018, of the Cooranbong Sanitarium Health Food company site. Sanitarium has had a presence in the region for 115 years and 185 jobs will be lost from the area.

Manufacturing is vital to the future prosperity of the Hunter region, but it does not get the support from government that it deserves. Across New South Wales, manufacturing jobs have fallen by 6.6 per cent over the past five years, leaving 20,000 skills employees out of work. In Melbourne recently, I was delighted to see trams with "Made in Melbourne, for Melbourne" stamped on the side. There is popular support for governments investing in local jobs and it is great to see the Victorian Labor Government investing in local manufacturing jobs. I compare this with Hunter bus manufacturer Volgren, which invested $18 million in its factory in Tomago in 2010, but had to lay off 85 staff when this Government decided to send the State's bus contract to Queensland instead of supporting jobs in New South Wales.

Downer EDI and UGL have supplied high-quality trains for this State and have the skilled and experienced workforce needed to build the next fleet of intercity trains for New South Wales. These companies have been involved in building trains not just for Australia but also for overseas governments, including the MTR trains in Hong Kong. Both these companies have struggled as this Government delays the tender process again and again, creating economic uncertainty for these businesses and forcing them to lay off hundreds of workers. The actions of this Government show that it is cut from the same cloth as the Abbott Government, which has caused great confusion in the shipbuilding industry with its contradictory statements about submarine and shipbuilding contracts in Adelaide that provide flow-on contracts in the Hunter.

I ask the Minister: What percentage of local content was included in recent projects in the Hunter, such as the Hunter Expressway? What percentage of local content has been included in projects funded by the Hunter Infrastructure and Investment Fund? What percentage of local content was involved in the Wyong to Newcastle Freight Rail Development? I also ask the Minister: What local content provisions are in place for the rebuilding of Hunter Sports High School in the Charlestown electorate? These projects are key examples of where the State Government has the opportunity to let local manufacturers contribute to the region. Last week I sat down with manufacturing workers and heard their stories. I listened to workers who had been retrenched when contracts ran dry, and heard from others who had seen their mates walked off the site because there was not enough work. These workers spoke frankly about the mental health impacts of losing a job—a blow made worse by knowing it was not their fault.

It is a false economic argument to say that the Government should consider only the cheapest purchase price when awarding a tender. Governments should consider the lifetime cost of the project, from construction to maintenance to disposal, as well as the flow-on benefits to the State from keeping these jobs local. The jobs multiplier effect and flow-on social benefits of a project should form part of the consideration of government contracts. Not only will those skilled workers continue to be consumers in the local economy, but local investment will also prevent the negative health and social costs borne by government for treating the issues associated with unemployment. I urge this Government to support local jobs and insure that local companies can compete for these tenders. 

Mr MATT KEAN (Hornsby—Parliamentary Secretary) [6.24 p.m.]: I thank the member for Charlestown for the significant contribution she has made to her local community over a number of years, both as a local government official and, more recently, as the State member for Charlestown. The Hunter region is the State's largest regional economy, and manufacturing plays in important role not just for the Hunter region but for the rest of New South Wales. Manufacturing in the Hunter region benefits us all. As Parliamentary Secretary to the Treasurer, I will take the member's message directly to the Treasurer. Rest assured, the Government's procurement process does not rest solely on lowest price; it considers a number of factors, including quality. I believe the enormously qualified and talented people in the Hunter region who are involved in manufacturing will always be able to deliver high-quality products. It is up to the Government to put in place the supports to enable that to continue. I will take the issue up with the Treasurer.