BlueScope CEO Paul O’Malley doesn't see forcing government to use Australian steel as the best way to benefit the industry.
In the wake of the 2015 steel crisis, which raised the spectre of Port Kembla closing, there has been a growing push for state and federal governments to change their procurement rules to favour Australian steelmakers.
Late last year the federal government announced changes that meant the total economic benefit of the procurement to the Australian economy had to be taken into account.
In NSW the approach has been different – a bill now before state parliament looks to force government to make sure at least 90 per cent of the steel it uses in infrastructure projects is Australian.
The bill has the support of the Greens, Labor and the minor parties but the government is opposing it, branding it as protectionism.
Of the two approaches, the federal government’s is much more in line with the thinking of Mr O’Malley, CEO of Australia’s largest steelmaker.
His belief is that BlueScope needs a level playing field – which includes an awareness of the taxes it pays – rather than a leg-up.
“I think it’s important for BlueScope to own its own future,” Mr O’Malley said.
“To do that we’ve got to invest in the best value-added products that people want to buy and we’ve got to be cost-competitive.
“In relation to the procurement policy, what we’ve argued is if a government makes a decision to import and it’s purely done on price, then they should reflect the price of the domestic product and reduce it by the contribution domestic industry and its employees make in form of taxes, rates, payroll tax, that type of thing.
“If they’re all ignored they’re effectively importing steel and not comparing apples with apples and disadvantaging the local industry.”
Mr O’Malley said governments at the moment carried out “a very simplistic assessment” of various products before making a decision to import.
Instead, he said they should look at more than just the price tag and consider the broader economic value it brings.
“If that’s fixed I think you will see increased demand for domestic product because government will acknowledge the benefit they provide for the local community,” Mr O’Malley said.