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Monday, 22 August 2011
Page: 8866


Ms BIRD (Cunningham) (22:05): Earlier today BlueScope Steel announced to the Australian Stock Exchange that its board had approved a major restructure of its steel-producing operations at Port Kembla and Western Port. Eight hundred jobs will be lost at Port Kembla and a further 200 will be lost at Western Port. Steel production at the Port Kembla works, which is located within my electorate of Cunningham, will be halved to 2.6 million tonnes. A number of other divisions will be closed down. The No. 6 blast furnace will be mothballed.

The decision by BlueScope Steel's board this morning is from a commercial decision-making process. The company's statement to the ASX indicates quite clearly that the company is experiencing 'structural change in the global steel industry' and an 'unprecedented combination of economic challenges' including 'a record high Australian dollar, high raw material costs, low prices for steel' and 'low domestic steel demand' in the wake of the global financial crisis.

Despite the intent of the federal opposition to link this commercial decision to the introduction of a carbon price in July 2012, BlueScope Steel again makes it clear that today's decision:

… is a direct response to the economic factors affecting our business and is not related to the Federal Government's proposed carbon tax.

My thoughts, along with those of my colleague the member for Throsby, are dedicated to ensuring that BlueScope Steel workers who will ultimately be affected by the decision to restructure the steel industry have all the necessary services available to them to deal with this loss of jobs.

The second priority for us as a Labor government is to do what it has done in the past: set out a plan to secure the steel industry during this painful restructuring process. I am very pleased that the Prime Minister, the Deputy Prime Minister and Treasurer, the Minister for Tertiary Education, Skills, Jobs and Workplace Relations, the Minister for Innovation, Industry, Science and Research, and the Minister for Human Services announced a $140 million package of initiatives aimed at ensuring that steelworkers and their families in the Illawarra community know that the Commonwealth Labor government stands shoulder to shoulder with them.

This $140 million package to the support the Illawarra community has three elements: firstly, assistance of up to $10 million over two years to ensure immediate access to intensive employment services by Job Services Australia providers; secondly, bringing forward $100 million of the $300 million of the Steel Transformation Plan to assist with the continuation of BlueScope Steel as the major steel producer, a major employer in the Illawarra and the prospect for reactivating the No. 6 blast furnace when the steel market enables profitable sales to resume; and, thirdly, the establishment of a $30 million investment and innovation fund, focusing on supporting new business ventures, high-value jobs predominantly but not only in manufacturing, and manufacturing services.

The member for Throsby and I look forward to working with Dr Don Russell, the Secretary of the Department of Innovation, Industry, Science and Research. He has been tasked with leading a whole-of-government response to BlueScope Steel's announcement and to develop a longer term coordinated structural adjustment strategy for the Illawarra. During the next few days all care and concern should be focused on the workers of BlueScope Steel and their families. Today has been a difficult day for each of them. But over the next few weeks attention must also move to the region, to make use of the $30 million innovation and investment fund. We will work with local organisations and unions in the Illawarra to see what projects can be implemented to maintain and create high quality skilled and ongoing jobs in manufacturing and manufacturing services. Regional structural adjustment packages do work; we know this in our region. The long-term focus in the Illawarra will remain on continuing to diversify our regional economy. Since the 1982-83 downturn and the long recession in the coal industry at the time, over the last 30 years the Illawarra region has transformed. We are in a much better position to adjust to the restructuring of our manufacturing sector than indeed we were even 30 years ago. Although manufacturing still plays a major role in the economy, we now see that BlueScope Steel is rivalled by places like the University of Wollongong and the region's health and community sectors as major employers. Despite today's announcement on steel and the pessimism surrounding talk of manufacturing in Australia, I am more than optimistic that the future of manufacturing is strong in our region and lies in the transition to high value-added production— (Time expired)