A Shorten Labor Government will secure more than 3,500 South Australian jobs and lock in a strong steel future for Australia through a targeted investment in Arrium.
Local steel is the backbone of new rail, road and construction projects. The ability to make our own steel is critical for major projects in defence and for protecting local jobs.
Australia cannot be the only advanced economy in the world to let its steel industry die. A Shorten Labor Government won’t stand by and let this happen.
Arrium is Australia’s only manufacturer of structural steel long products, employing about one in six workers in Whyalla and contributing hundreds of millions of dollars to the South Australian economy each year.
A Shorten Labor Government will work with the South Australian Government to establish a joint Steel Reserve to support Arrium to make specific investments that secure its long-term future.
Labor will provide $100 million in targeted grants and financing as part of the Steel Reserve, with the South Australian Government providing an additional $50 million.
This will ultimately see up to $300 million invested in new plant and equipment to make Arrium more productive and efficient, while securing thousands of local jobs.
A Shorten Labor Government will provide up to 50 per cent of the federal contribution in direct grants, with the remaining 50 per cent to be provided as financing or loan guarantees through the Export Finance and Insurance Corporation (EFIC).
Steel Reserve funds must be directed to investments which:
- Promote the long-term sustainability of Arrium’s steel business, including through increasing its ability to contribute to major Australian infrastructure projects.
- Secure Arrium’s operations across Australia, and particularly in Whyalla.
- Assist the business in permanent cost reductions which do not cost jobs, particularly through increased energy efficiency and productivity gains.
Financing will be made available from the Steel Reserve for specific investment projects that have an agreed business case approved by both the federal and South Australian governments. Importantly, the Steel Reserve must not be used to pay down Arrium’s debts or meet regular operating costs.
In the event that a future buyer of Arrium does not maintain local steel production and jobs in South Australia, Labor will withdraw this offer of federal funding.
Modelling by the Australian Industrial Transformation Institute shows that, on a conservative estimate, 3,545 South Australians would lose their jobs and the state economy would shrink by over $490 million if Arrium fails.
Labor will not leave the workers of Arrium and their community on their own to face the unfolding challenges in the global steel market.
Low international prices, high-cost raw materials, the dumping of products from overseas, and weak domestic demand are all challenging the business model for locally-produced steel.
That is why Labor has already announced our six-point Plan for Australian Metals Manufacturing and Jobs.
Labor will deliver this investment in Arrium and our six-point plan because we believe in strong local industries that protect existing jobs and create new ones.
We stand for local jobs because that’s what it means to put people first.
For more information on Labor’s plan to support Arrium and protect local jobs, visit http://www.100positivepolicies.org.au/local_steel_local_jobs_fact_sheet.
THURSDAY, 16 JUNE 2016