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Labor’s fixer – and Govt protection – to aid ailing steel industry

The Weatherill Government has adjusted its procurement policy for state projects in a bid to advantage local steel manufacturers.

Nov 25, 2015, updated Nov 25, 2015
The steelworks in Whyalla.

The steelworks in Whyalla.

In Whyalla today to visit the strife-hit Arrium operation, Mineral Resources and Energy Minister Tom Koutsantonis declared all future State Government projects would be required to use steel that meets Australian Standards and certification, a move he said would give the local steel industry a competitive advantage.

He also outlined the formation of a new “Steel Taskforce”, which will examine ways to salvage the ailing local industry.

It is a model favoured by the Labor Government, which in 2013 appointed former federal frontbencher Greg Combet to chair an Advanced Manufacturing Taskforce to address the rapid decline of the automotive industry.

Only last week, Arrium announced the loss of 250 Whyalla jobs as the company seeks to limit costs in the wake of a global glut of cheap steel.

The Steel Taskforce’s $4.3 million, four-year budget will include $320,000 to establish a third party audit that will enforce the new procurement mandate and help local firms comply.

It will be led by Labor’s long-time “Mr Fix-It” Bruce Carter, who has been a frequent go-to man for crisis-hit industries. He was chair of the WorkCover and Economic Development Boards, and was appointed by the then-Rann Government to sort out the mess when automotive supplies company Ion went into voluntary administration in 2004. He has also chaired the Port Pirie Redevelopment Project steering committee and the Olympic Dam taskforce.

Carter told InDaily the steel industry taskforce would be comprised of the same appointees that worked on Olympic Dam, and would be “essentially approaching it the same way we’ve done in Port Pirie”.

“There’ll be a taskforce of public servants and Arrium representatives, and we’d hope some from the feds,” he said.

“The beauty of the taskforce is it allows us access to appropriate decision-makers with the state and federal Governments.”

Asked whether a locally-biased procurement policy was necessary in the current economic environment, Carter said: “I don’t know, but procurement is such a key aspect of all Government policy at the moment … if Government are supporting businesses, they’d like to see as much of that support flow into the local community as possible.”

Koutsantonis said Carter’s taskforce would partner with the Office of the Industry Advocate “to design initiatives that ensure steelmakers and fabricators can compete fairly for local contracts”.

“The steel industry is at risk because of the import of cheaper products from countries with lower quality standards and labour costs,” Koutsantonis said in a statement.

“This State Government will not stand back and allow uncompetitive pressures to crush a strategic industry that has provided decades of jobs and prosperity for South Australians.”

He urged governments state and federal to implement similar procurement measures, saying: “We firmly believe there is a future for Australia’s steelmaking industry as long as we provide unwavering support during these difficult economic conditions.”

The industry’s peak body, the Australian Steel Institute welcomed the announcement, with chief executive Tony Dixon enthusing that the move would “cultivate a more level playing field for locally milled and fabricated steel”.

He also suggested it would make local projects safer, arguing it would “help stem the risk posed by non-compliant steels as Australia becomes more exposed to global supply chains, considering that structural steelwork is a critical safety element”.

Arrium, too, unsurprisingly welcomed the move, saying in a statement that “the viability of our Whyalla business is threatened by the global oversupply of steel, particularly from China”.

“We remain focused on delivering a viable and competitive Whyalla business and we are working as fast as we can towards achieving this,” the company said.

But the Opposition suggested the announcement was an admission that state projects had heretofore used substandard imported material, with Deputy Liberal leader Vickie Chapman saying: “It is disgraceful that despite the massive loss of jobs at the Whyalla steelworks, the Weatherill Government is only now moving to require the use of steel that meets Australian Standards.”

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