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House of Assembly - Fifty-Third Parliament, Second Session (53-2)
2015-10-27 Daily Xml
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Steel Industry

Mr HUGHES (Giles) (15:35): Comments in the Financial Review last week by the Chief Executive Steel at Arrium, Steve Hamer, are concerning on a number of levels. He was critical of the federal government for failing to protect domestic steel manufacturers from dumped steel. He said that our antidumping regime was neither fast enough nor robust enough. This is especially disturbing at a time when the Australian steel industry and the steel industries of other nations are under unprecedented pressure as a result of the huge increase in Chinese steel exports. Chinese steel exports have doubled over the last five years and now exceed 100 million tonnes per year. This has put massive downward pressure on steel prices internationally and has led to a number of countries acting to support their steel manufacturers.

The $100 million in cuts at Arrium's Whyalla steelworks is a reflection of the pressure that is being exerted, and that $100 million in cuts comes on top of the previously announced $60 million in cuts. This will inevitably lead to yet more job losses in Whyalla. Those job losses will come on top of the jobs already lost at the steelworks and the jobs that have been lost in the iron ore export operations at Whyalla. The job losses to date in Whyalla are significantly greater than the combined loss of employment amongst power station workers in Port Augusta and the Leigh Creek miners.

In addition to criticising the federal government for its failure to strengthen our antidumping regime, Steve Hamer, in response to a question about the future of the Whyalla steelworks and whether closure was being considered, said, 'This is a live and active question in our business.' He did indicate that he believed that the blast furnace at Whyalla had a future but that all options had to be considered in the current climate, including whether to import raw steel.

I do not believe closure is on the cards but publicly canvassing the range of options understandably generates uncertainty in a community that is so dependent on value-adding to iron ore. Approximately 2,000 people are employed in the steel industry in Whyalla: apply a conservative multiplier of two jobs for every one in the steel sector and consider that the labour market in Whyalla numbers approximately 10,000, and you get an idea of the potential impact.

The federal government needs to pull its finger out and, as a matter of urgency, strengthen Australia's antidumping provisions. We are not playing on anything like a level playing field. Over recent months, the Chinese steel industry has racked up losses in excess of $4 billion, and a recent survey of 163 Chinese steel mills indicated that over 90 per cent are running at a deficit.

At the ALP State Convention on Saturday, the importance of the steel industry was recognised when the following motion was adopted:

SA Labor recognises the strategic need for an Australian steel industry and its significant contribution to the economy of South Australia, especially in Whyalla.

In order to safeguard the Australian steel industry and help ensure its long-term viability, SA Labor calls on the relevant state and federal governments, together with industry and unions, to cooperatively and collaboratively develop a national steel plan.

Such a plan should seek to increase the use of Australian steel in projects funded by governments, promote investment in the sector, improve antidumping and other systems designed to safeguard Australian industry from unfair trade practices, and assist in a cooperative approach between unions and industry to improve efficiency in the sector.

In the absence of a commitment by the Coalition federal government to a Steel Plan, SA Labor calls on the federal parliamentary Labor Party to develop such a plan so minimal time is lost in its implementation once Labor is returned to federal power.

Time expired.

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