SA steel closures assessed
Analysts say it is hard to overstate the impact of the closure of the Arrium steel works.
A new study suggests the economic and employment costs would be in the order of three quarters of a billion dollars and some 5000 South Australian jobs.
“Whichever scenario you look at, the outlook is extremely serious. In some senses Arrium is too big to be allowed to fail, given the impact in Whyalla and to the state as a whole,” says Professor John Spoehr, director of Flinders University’s Australian Industrial Transformation Institute.
The analysis shows the Whyalla workforce would decline by about 40 per cent with between 3550 and 3940 full time jobs lost, while statewide job losses would be between 4760 and 5360.
“For every three jobs lost directly in region at the steelworks, the mine, and in transport linked to these operations, there will be another one job lost within the Whyalla region in areas such as retail trade, health and education and recreation and personal services. This is about more than metal,” Prof Spoehr says.
“The scale of the impact relative to the size of the labour market is significant.
“It would have a far greater impact on Whyalla – with flow-on effects statewide – than the closure of the auto industry in Elizabeth.
“Latest unemployment figures reveal a significant decline in full time male employment. Should an Arrium closure coincide with the end of car making operations it would precipitate a sharp rise in South Australia’s unemployment rate, threatening 10 per cent.”
But there is some hope - Professor Spoehr says that these scenarios can be prevented by short and medium term measures.
“A national steel industry transformation strategy is needed to help Arrium and other steel makers move up the value chain and achieve sustainability,” Professor Spoehr says.
He argues that the report on Arrium (available here in PDF form) should be taken as an opportunity to assess the value and importance of government efforts to ensure the industry’s survival, and provides a strong case for action.