interview with abc illawarra on saving steel

22 October 2015

MELINDA JAMES:This morning the board of BlueScope will be meeting. This is the board meeting where we expect BlueScope CEO Paul OMalley to recommend to the board whether or not they should continue to make steel at Port Kembla.


MELINDA JAMES: This morning the board of BlueScope will be meeting. This is the board meeting where we expect BlueScope CEO Paul OMalley to recommend to the board whether or not they should continue to make steel at Port Kembla. It comes as we hear news overnight from the UK that the UK Government is planning to assist the steel industry there. Joining me now is the federal Member for Throsby, Stephen Jones. Good morning.

STEPHEN JONES, MEMBER FOR THROSBY: Good morning, good to be with you.

JAMES: Ive only just read some news reports of what is happening over there in the UK at the moment but David Cameron is seeming to promise that there will be government action to help Britains struggling steel industry. Are you across what is happening in the UK and what do you make of it?

JONES: Ive been following it over the last couple of weeks. Of course, they have had a steel mill closure over there and a couple of others have gone close to going to the wall. We know that steel nations right around the world are struggling; they are asking what are we going to do? How are we going to manage? How are we going to keep our industry alive? They know that there is a massive world over-supply of steel, even efficient plants are struggling. So I welcome what they have done in the UK, it is a sensible set of proposals. They are the same sorts of proposals that we are putting forward here in Australia. This includes local procurement rules, working with all levels of government to get the right sort of tax relief in place and tough anti-dumping laws. Now we are yet to hear from the federal Government on the things that they can and should be doing. I know that the unions have been in town, they cant get a meeting with the Minister. Its important that the new Minister, Chris Pyne, who has got a lot to say on all manner of things, stands up and makes a clear statement on what they are going to do to support our steel industry.

JAMES: Do you think the situation in the UK, as Wayne Phillips said, is a complete reflection of what is happening here? Are we going through identical problems?

JONES: Absolutely, we are going through identical problems. We know that there is an over-supply of steel in the world. This is largely driven by the massive ramp-up in supply in China. They are producing much more of what they can use a lot of it inefficiently, a lot of it massively subsidised. They have got some good plants up there, but they have got some pretty ordinary plants as well that are massively subsidised. They say that they have got to restructure and reduce capacity but we shouldnt be suffering while they drag their feet on doing the job of getting their own industry in order in China. We are taking the tough decisions here in Australia, we have seen the unions step up to the plate and make some very courageous decisions about what they need to do to save the plant. 500 people are going to lose their jobs as a result of that, but that saves enough 4,500 jobs. So we know that our people are willing to take the tough decisions. We want the board to make the right decision to support Port Kembla and we want all tiers of government to do all they can to make sure that we continue to make steel in this region.

JAMES: So if we are facing identical problems, do you think we should have an identical solution? What is being proposed over there by a conservative Government over there in the UK, it would be procurement rules and some kind of subsidy for energy costs, dealing with unfair competition and being tougher on dumping and tax and government support as well. Do you think we need that exact same four-tiered response?

JONES: We are responding to the things that BlueScope themselves, the industry themselves, are putting up and asking for. I think that should be where our agenda is. They have identified the things that they need; tax relief is definitely one of them. We think that procurement should be in there. You cant build a steel industry in this country around government procurement alone, but it is an important part it particularly when we are going through difficult times. So there have been massive increases in infrastructure by state governments, we want to see as much Australian steel as possible going into those bridges, into those roads, into the railway lines, that should be a part of the deal. In terms of tax relief, the New South Wales Government has been asked for some relief on Payroll tax. They have got a tough decision but we think the right thing for them to do is to provide that Payroll tax relief. Because if the mill goes to the wall - they will be getting nothing. Those are the sorts of things that need to be in the mix. The Commonwealth has had absolutely nothing to say regarding anti-dumping rules. We need a clear statement of direction about what the Commonwealth Government, led by Chris Pyne, is willing to do in that space.

JAMES: Just before I let you go, in your discussions with BlueScope, the unions and anyone who is a stakeholder here - how do you see the significance of the board meeting today? According to Wayne Phillips Paul OMalley will make a recommendation one way or another about whether Port Kembla should continue to make steel or not. Then the board will make its decision in the interests of BlueScope shareholders. Given that we talk a lot about waiting for the state Government to make some sort of announcement about concessions and we talk about the federal Government doing more about anti-dumping, how significant is today given the discussions you have had with people from BlueScope?

JONES: The board meeting is critical. The board are the ones who have the decision. They are the ones who represent the shareholders, the people with the money at stake in BlueScope. They are the ones who are going to make the decision are we going to back the CEOs plan or arent we? Im calling on all of the board members to get in behind not only the CEO, Paul OMalley, but the workforce, the region and everyone who has put their shoulder to the wheel to put together a comprehensive plan to save steel in the Illawarra and Australia. We need to ensure that we have a productive, effective and viable industry into the future, because that is of course the main game.

JAMES: They seem to be left to make a decision but they may be unaware of whether the state Government will come good on tax concession and whether the federal government will do more to prevent dumping.

JONES: I think that the state Government could have done a lot more in terms of giving some clarity about where it is going. We have had some broad statements about the importance of steel and wanting to support the future of the steelworks. But the state Government could have been a lot clearer. Going into the board meeting I hope that doesnt become the critical factor. We need three green lights from the board meeting today. All of those workers who have that axe hanging over their heads, they deserve some clarity not only from the board but also the Government about what their futures are going to be.

JAMES: Stephen Jones, thank you for joining us.

JONES: Thank you.