From BlueScope’s point of view, it would seem the government’s steel plan is better than that proposed by Labor and the Greens.
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BlueScope boss Paul O’Malley has never been one for the mandated minimum steel usage in government projects that is the core of the Greens-Labor bill.
Instead, all the Port Kembla steelmaker wants is a level playing field and a chance to compete on quality, rather than the government making procurement decisions based solely on the bottom line.
And that’s what the NSW government’s changes to steel procurement seem likely to do.
The focus has been on the setting of a new Australian standard for steel, aimed to address concern over the use of substandard steel in projects.
That’s not anything new – the government has been working on that for some time.
Of more interest is looking at changing the way the “broader economic benefit” test is applied when deciding to purchase Australian or foreign steel.
If that is effective, it will come close to BlueScope’s preference of the government taking into account the whole of life costs – including the economic benefit they give in terms of paying wages and taxes in Australia.
The odd part in this package of reforms is a plan to publish the amount of Australian steel used in government projects.
Because we know the government’s definition of “Australian steel” is rather broad.
Various state politicians have crowed about record levels of Australian steel used in government infrastructure projects, which sounds great.
But when the Mercury has scratched below the surface, it becomes clear that the government can’t say with certainty that the steel it is using was actually made here.
The government included steel processed or value-added in Australia as “Australian steel”, when in fact that supplier may well have sourced that steel from overseas.
For instance, reinforcing bar used in the Princes Highway upgrades was bought in NSW but was made and fabricated in Singapore.
Does that get added to the “Australian steel” tally? It’s not clear.
For this part of the plan to work, they need to be mindful of the fact that, just because they bought it from an Australian supplier doesn’t automatically make it Australian steel.
