Prime Minister Julia Gillard pledged to stand "shoulder to shoulder" with sacked Port Kembla steelworkers but is offering a fraction of what's needed to fix the Illawarra's billion-dollar problem.Throsby MP Stephen Jones has told Federal Parliament this week's slashing of 1100 jobs will cut $1 billion from the region's economy.So far, $20 million in federal funds have been allocated towards a package designed to stimulate growth, along with $10 million to help redundant staff find work.Ms Gillard has also refused to mandate the use of Port Kembla steel in major government and mining construction projects.Mr Jones appeared alongside union heavyweights in Canberra yesterday to call for greater use of Australian products in those projects, pointing to the Mercury's revelations that not a scrap of BlueScope steel was used in the construction of WIN Stadium's western grandstand.Mr Jones later conceded he had not spoken to Ms Gillard this week about the need for a new procurement policy, but said his stance had been known for many months."I think it makes a hell of a lot of sense if [the Government] is putting money into infrastructure, and one of the reasons we are doing that is to stimulate employment, then a pretty direct way of doing that is to ensure there are Australian-made goods in that infrastructure," he said.Ms Gillard yesterday described protectionism as "cheap populism" and a "slippery slope", claiming that mandating the use of Australian steel would hurt the mining sector."We are a great trading nation [with a] turbo-charged resources sector and it would make us the subject of trade retaliation," she said.Mr Jones said Ms Gillard was planning to visit Port Kembla but he would not say when. "I'm not going to play that game, she'll be visiting the region and she'll be doing it in the very near future."The Government has also offered BlueScope a $100 million injection from an already-promised $300 million carbon tax compensation fund.Mr Jones and Cunningham MP Sharon Bird are also working to leverage funding for projects, including the Maldon-Dombarton rail line and Shell Cove marina.Australian Workers' Union national secretary Paul Howes said he was comfortable with the Government's response."There is no political advantage for Labor to be presiding over the death of manufacturing ... manufacturing is Labor's base," he said.BlueScope Australia and New Zealand chief executive officer Mark Vassella yesterday declined to call for mandated local content, saying he just wanted to be able to compete on merit."We're not about policy that doesn't promote fair trade," he said."From our perspective, we operate with all of the other countries that are WTO [World Trade Organisation] members so we're not looking for an unfair advantage."Where I probably get cranky is where projects are let and we haven't even had a chance to get a look at it, that are driven out of central procurement businesses elsewhere. If we can have a go at it and win it in our own right, then that's the right outcome."