BlueScope CEO Paul O’Malley has responded to critics of the company after it doubled its profits.
On Monday Mr O’Malley announced the company had made a $200.1 million half-yearly profit – a 116 per cent increase on the same period last year.
Critics have said the profit was due to last year’s redundancies and the government’s tax concessions – neither of which are true.
The redundancies will not flow through to the BlueScope balance sheet until the second half of the current financial year, while the payroll tax concessions did not come into force until January 1 this year.
Additionally, the payroll tax concessions do not mean the company avoids paying that tax.
It is merely deferred until the end of 2018 after which time, the company has to pay it back at a rate of half a million dollars a month for 10 years.
This would be on top of the monthly payroll tax it must resume playing from 2020.
Mr O’Malley said it was good news that the company has made a profit.
“We need a profitable business to continue to employ people and if we’re going to be criticised for being profitable, the only alternative is for us to employ a lot less people in Australia and bring in the [steel],” Mr O’Malley said.
“If you go back to August, we were being criticised because we were subsidising the steelworks to the tune of about $200 million a year.
“We had Plan A and Plan B. Plan A was to save $200 million and, yes, lose 500 jobs but save another 4000. Plan B was to shut down the steelworks and save $200 million but with substantial job losses.
“Either way BlueScope was going to improve its profits - one way was with fewer job losses, one way was with the shutting of the steelworks.”
Mr O’Malley said salary freezes and forgone bonuses from staff and executives formed part of the $200 million profit
This included Mr O’Malley – according to the 2015 annual report his salary dropped more than half a million dollars to $4.3 million.
“Our businesses outside Australia are doing really well,” he said.
“Our businesses inside Australia, with the steelworks, were doing poorly, and the board took that into account in determining the compensation of the senior management team.”
Mr O’Malley said he was pleased to have kept the steelworks open.
“The thing I’m most proud of is we proved that Plan A worked,” he said.
“If we listened to a lot of our owners and analysts we would have gone to Plan B and shed another 4,500 jobs.”