NSW Government forum to discuss steel procurement

On the eve of the NSW Government’s steel forum at the University of Wollongong  Arthur Rorris, secretary of the South Coast Labour Council asks: Steel Procurement Policy – What’s the Deal?

It is now almost two years since the international steel crisis hit Port Kembla.

It hit with the force of a tsunami.

Nothing could have really prepared our region and in particular the steelworkers and their families for the difficult times ahead and sacrifices that would have to be made by year’s end to save our steelworks from closure. 

It is true that the NSW Government helped with a handout to BlueScope in the form of a deferral of state taxes but it hardly compares to the sacrifice of the workers.

Let’s be very clear about this.  The survival of the steelworks came at great cost. Hundreds of jobs and a hit to paypackets.

FORUM: Some of the key players in the industry will gather in Wollongong on Monday for discussions which will hopefully help secure the future of Australian steelmaking. Picture: Sylvia Liber.

FORUM: Some of the key players in the industry will gather in Wollongong on Monday for discussions which will hopefully help secure the future of Australian steelmaking. Picture: Sylvia Liber.

At first glance, this story has a happy ending.

The steelworks is open, thousands are still employed and profits are up.

What is hidden is the biggest lesson from this crisis and “near-death” experience of our steel industry.

The lesson? Markets fail. The international steel crisis is not the exception it is the rule.

To keep the lights on, to keep our hospitals open, to educate our children and to keep our steel industry alive we can’t afford to simply put our faith in the market – we need our Governments to intervene, it’s their job.

That is why the campaign to buy Australian-made steel in publicly funded projects is so critically important to the future of our steel industry.

Let’s face it, as the largest customer of steel in Australia, the NSW Government has the power to influence the future of steelmaking in this country, period.

Ultimately, it is the best card we have yet our Government refuses to play it.

WHAT'S THE DEAL: Secretary of the South Coast Labour Council Arthur Rorris wants to see genuine action from the NSW Government. Picture: Georgia Matts.

WHAT'S THE DEAL: Secretary of the South Coast Labour Council Arthur Rorris wants to see genuine action from the NSW Government. Picture: Georgia Matts.

The ideologues and free market fundamentalists will say that mandating Australian made steel will raise the cost of infrastructure projects and that will be borne by the taxpayers.

The problem with these textbook experts is that they are not very good at counting all the costs of a purchase, only what suits them.

For instance, they say that local steel product is more expensive than some imports.

What they will not do is discount the local price by subtracting the taxes paid by the local steelmaker back to Government.

The bottom line? If you do not count all the costs and benefits and simply rely on the price on the ticket, the taxpayer can be the big loser. 

BlueScope boss Paul O’Malley put it very bluntly to the Illawarra Mercury when he said: “…they’re effectively importing steel and not comparing apples with apples and disadvantaging the local industry”.

CHANGING TIMES: Former Treasurer and now Premier Gladys Berejiklian back in 2015 when the NSW Government announced tax relief for BlueScope.

CHANGING TIMES: Former Treasurer and now Premier Gladys Berejiklian back in 2015 when the NSW Government announced tax relief for BlueScope.

The second argument mounted by many in the Government, is advanced by the free-trade faction and essentially says that Australian taxpayers can’t buy Australian made steel for Australian projects because it contravenes International free trade principles.

Why you ask? Because it favours local product over imports.

Well yes, that’s precisely the point. Don’t the people of NSW, the taxpayers and consumers have the right to spend their money wherever they like? The right to choose? Isn’t that the foundation of a free market economy?

Right about now the accusation of protectionism gets thrown around like confetti despite the fact this is not about stopping imports or even putting tariffs on them.

This is simply a question of taxpayers getting value for money and the best deal for our community.

On Monday the NSW Government will convene a roundtable of key stakeholders on this key question of procurement policy and the options for reform.

The workers in our steel industry and many others in our community have made it very clear to all politicians that we expect our taxes to build our roads, railway, schools and hospitals using Australian made steel.

Labor, the Greens, Fishers and Shooters and Christian Democrats have supported our call and voted for the Steel Protection Bill.

The NSW Government has not. They say they have a better way forward.

Let’s hope that it is more than putting another bet on the market.

*Follow our website illawarramercury.com.au and social media pages for all the updates from Monday’s NSW Government steel industry forum at the University of Wollongong.

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