The Federal Government did not know BlueScope Steel was planning to halve steel production when it negotiated the $300million Steel Transformation Plan in June - but it knew the company was ‘‘considering options’’ on how to cut costs, Climate Change Minister Greg Combet said yesterday.
The $300million lifeline to Australia’s two biggest steelmakers, BlueScope and South Australian-based OneSteel, passed the Senate yesterday morning, a day after the rest of the carbon pricing package was voted into law. BlueScope will receive $180million under the deal.
Mr Combet yesterday told the Mercury that in June, when the package was negotiated, he knew trouble was brewing for BlueScope.
‘‘Everything we’ve done has been about supporting jobs in the Illawarra and at the steelworks - and that’s what that steel plan was about,’’ he said.
‘‘I’m not a mug; I’ve been around a long time, and I’ve been around the steel industry a long time.
‘‘I knew the pressures that were there, I knew what losses had been declared by the company, and you didn’t have to be Einstein to work out that they were considering ways of stemming the losses.’’
But he said he was not aware that six weeks after the steel plan was announced, BlueScope would announce plans to close down a blast furnace and a coke-making battery at Port Kembla, halving steel production.
The restructure cost about 1000 jobs and reduced greenhouse gas emissions by about fivemillion tonnes of carbon dioxide equivalent.
‘‘We were aware of all the speculation and the issues considered, and no decision had been taken, so the Government didn’t have knowledge of any specific outcome,’’ Mr Combet said.
‘‘However, when you’re in receipt of all that knowledge, about what difficulties Port Kembla was in, and the steel industry nationally, my concern was to support as many jobs as we could in the industry.’’
Mr Combet hailed the plan as a measure to support jobs in regions like the Illawarra, and said it was vital Australia had a steel industry.
‘‘Any major economy, and we are a major economy, has got to have some steelmaking capacity,’’ he said.
‘‘We certainly don’t have the scale to effectively achieve the scale like you can [in] China.
‘‘I think it’s a key strategic economic reality - that economies like ours need to be able to produce steel.’’
A BlueScope spokesman yesterday said the plan was a ‘‘pragmatic’’ way to minimise the costs of the carbon price.
‘‘In July, BlueScope concluded its carbon negotiations with the Government and secured a sectoral deal for steel, the Steel Transformation Plan, which provides a pragmatic solution to the complex problem and minimises the direct cost to our company for the first four years,’’ he said.
‘‘There will be a review after this period.’’
Mr Combet said the passage of the carbon price may rank as his proudest achievement, perhaps ahead of his role in the 1998 waterfront dispute, when he was assistant secretary of the ACTU.
‘‘It’s certainly been a hard year - in some senses I measure some of the things I’ve done by how difficult they’ve been,’’ he said.
‘‘But in terms of achievements this is really one that I’m very proud of ... because it’s so important for the future of the country.’’
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