PATRICIA KARVELAS, HOST:Labor's Stephen Jones is the Federal Member for Throsby, good evening Stephen.

MEMBER FOR THROSBY, STEPHEN JONES:Good evening Patricia.

KARVELAS:BlueScope has just posted its best four year profit performance since the Global Financial Crisis, yet there is talk of 500 job losses. What is going on?

JONES: Well, BlueScope is facing the same sorts of problems that the steel industry is facing all over the developed world. World capacity, that is steelmaking capacity, has doubled over the last decade and China is producing over 800 million tonnes itself. In its own right, it is producing over half the steel in the world. That was going into their massive development and growth but that is tapering off, it is slowing. They are now putting about 100 million tonnes worth of steel onto the world market. It is smashing prices and some say that it is being heavily subsidised. Around the world anti-dumping and tariff actions are being put in place by steel producing nations. We are no different here in Australia, Port Kembla is a small steel producer by world standards and it is facing massive competition from cheap and some say heavily subsidised steel.

KARVELAS: So you met yesterday with BlueScope management; you've just painted a picture to me of a very bleak situation, which shows that it is maybe very uneconomic for BlueScope to keep continuing doing what they are doing. Tell us about that meeting, what happened and what issues did you raise?

JONES: Look the CEO, Paul O'Malley, is doing - and I've got to give him credit here - the best job he can. He's got his bankers and his shareholders on one hand and he's got people like me, the unions and community representatives saying we want to continue to make steel in this region and this country. His response is - well, we have got to be able to do it profitably. That means we have got to be able to make steel at the same prices that we can land it here, that is the price that we import it. That means making some changes, I think that we can work our way through this. I think as the largest exporter of coking coal, that is steelmaking coal, and iron ore in the world we can also keep some of it here and turn that into steel. We've just got to have a wholly productive steelworks.

KARVELAS: The chief executive you just mentioned, Paul O'Malley, says that the steelworks is on a knife edge. He's being pretty blunt, it's kind of inevitable that this plant closes isn't it?

JONES: I don't accept the inevitability, I think if we can turn the steelworks around that will mean some changes on the labour front. But frankly it also means ensuring that we have some of the best equipment in the world so that we can turn it around and make steel that is competitive at the same price that it is landing it here -

KARVELAS: Okay, so you say that that means some changes on the labour front, you mean that you accept that there will be significant job losses?

JONES: I haven't looked through the books, but people who I trust have gone through the books and they say that savings need to be made if we are going to compete in a very tough international market. Now as O'Malley told the stockmarket earlier this week it is 500 jobs to make us competitive or 5,000 jobs if we can't be competitive. That is the situation we face. Plan A is bad, Plan B is disastrous for the Illawarra. As you said in your introduction, steel has been integral to our economy. It has shaped the character of the region for well over 90 years, I want to see it here in another 50 years time.

KARVELAS: Absolutely, it has shaped the character of the region but the world changes and economies shift and that is what we are watching here. That is what we are watching here, an absolute significant shift, a revolution, in the way globalisation works. China is posing this threat so don't we need to think about other options rather than just propping up something that inevitably will cease to exist at some stage?

JONES: We accept that and not for the first time and in my own life I am an example of this. The reason I was a lawyer, a community worker and now a Member of Parliament is because of 1982-83 when I was going to leave school I would have got a job in the steelworks or the mines. But in that year the steelworks slashed its workforce from 23,000 down to 13,000, we went through massive change. Structural adjustment packages were put in place, a steel industry plan was put in place and that was the reason that the Illawarra pulled through. We've never quite recovered, but it made a difference and its why the steel industry made its way through those difficult decades of the 80's and the 90's and we are still alive to face the challenges in 2010 through to 2015. I argue that the same approach is needed again. We need regional adjustment packages but also the right sort of support without resorting to subsidies or protectionism to ensure that we still have a steel industry into the future.

KARVELAS: Industry Minister, Ian Macfarlane, flagged that the Commonwealth was prepared to intervene given the impact that job losses would have on the Illawarra region. It seems like you might have a consistent view to the Government, where is the difference?

JONES: Look, I welcome Ian Macfarlane's comments yesterday. I welcome the fact that he is going to come down to the Illawarra and talk to the community leaders. Regrettably, all he is talking about at the moment is a regional assessment package. Now don't get me wrong that is welcome, we need that. If we are going to lose 500 jobs and pull $200 million out of the local economy we will need some assistance to pull us through and to ensure that we still have jobs, that we have labour market programmes in place to assist the displaced workers and the businesses affected. But I also want to see steel in this country and I also want to see that we do the right things by the industry so that we still convert some of those mountains, literally mountains, of iron ore that we have in this country into steel, particularly for our domestic market.

KARVELAS: The union is saying, the AWU secretary Wayne Phillips, that the company is using the threat of closure as a bargaining chip. Do you agree with that assessment?

JONES: Look I understand. Wayne is in a very difficult situation, I know him well he is a decent Australian. He goes to bed every night worrying about how he is going to ensure that his members continue to have a job the next day. That is his job. But he has also got to guide the workforce through some of the inevitable changes. It really is a terrible position that you are faced with - do we lose up to 500 jobs or face the threat of the steelworks closing down altogether? It's a very difficult situation, but I'm urging everyone to get around the table, have a decent negotiation and come up with a solution that looks after the workers but also ensures that we have a steel industry into the future.

KARVELAS: So you do accept though that there will be inevitably job losses?

JONES: I think everyone accepts that there is going to have to be changes at the steelworks. That will mean some job losses and job losses have been going on. It's not like year one starts today, job losses have been going on almost continuously. I used the figure 13,000 when I left school, there is actually less than 5,000 people directly employed in the steelworks today. That number will probably drop more, it will affect local businesses. Everybody whose business relies on a pay cheque from the steelworks is going to be impacted by this, that is why government has a role to smooth out and provide assistance to the region that is going through a very difficult time. Let's not forget, this is a region which has stubbornly had unemployment at above two per cent the national average the past decade.

KARVELAS: I want to get your view on something else before you go, do you have a view on whether Australia should be a republic in the next five or ten years? Also, what do you think of Joe Hockey joining this parliamentary friendship group on the subject?

JONES: Look, in such a fractious Parliament where things are black and white and Labor agrees with something and the Liberals disagree I welcome the fact that there are some things which unify us across the political divide. Hats off to Joe for standing up for what he believes in. I agree with him, Australia should be a republic. The core of the argument of the monarchists is this - that there is not an Australia is good enough to be our head of state and frankly I think that is offensive.

KARVELAS: But you are also on the parliamentary committee on the recognition movement for Indigenous Australians to be recognised in the Constitution. That hasn't been an easy journey as you know and it still hasn't been delivered. Doesn't this muddy the waters?

JONES: Frankly, I'm very disappointed. I think it needed the Prime Minister to stand up and devote more attention to constitutional recognition. I don't doubt for a minute that he believes the things that he has been saying publicly, that he is committed to ensuring that that change happens in our Constitution. But it has not been on the top of anyone's in-tray, particularly the Prime Minister's. I take that back, it has not been on top of the Prime Minister's in-tray, there have been a lot of good people at the parliamentary level working very hard on this. But it needed to be elevated to the level of the Prime Minister, for him to show the leadership and say that we are going to get this done and we are going to get it done this year, in this term, in this Parliament.

KARVELAS: Thanks for joining us.

JONES: Great to be with you.