For months, the South Australian steel city of Whyalla has been a focal point for national debate as politicians and unionists argued over its grim future as a "ghost town" under a carbon tax.
Photo: Kelly Barnes
Bill McGovern, a process support specialist at OneSteel's rolling mill in Whyalla, South Australia, yesterday.
Tony Abbott was in the city of 22,000 in April to back an Australian Workers Union warning that a carbon tax would wipe Whyalla off the map, forcing the closure of the OneSteel plant, which directly employs up to 4000 people.
"Whyalla risks becoming a ghost town, an economic wasteland, if this carbon tax goes ahead," he said at the time.
But now the local MP Lyn Breuer, the South Australian Labor speaker, fears the steel plant is doomed anyway, whatever the impact of the tax.
She believes the company will close its Whyalla operation under the cover of a carbon tax, and says the real reason is its lack of profitability. "I don't believe a carbon tax will be OneSteel's problem — the company made a $71 million loss in the past 12 months on steelmaking," Ms Breuer, whose northern electorate of Giles takes in the steel city, said yesterday.
"They will close because they are just not making a profit and they are looking to get out of it, and the carbon tax would be the excuse they need. They will say the carbon tax is the icing on the cake, but I don't believe it will be the cause of any closure. It is just the threat they are using for political and commercial convenience to get out of Whyalla."
Ms Breuer's comments to The Australian put her at odds with her own party, Premier Mike Rann and senior ministers, who have insisted their negotiations with the federal government on behalf of OneSteel will result in an agreement, to be revealed with the carbon tax plans on Sunday, that does not threaten the future of industry in South Australia.
Industry Minister Tom Koutsantonis yesterday told ABC radio that "OneSteel, for us, we think is a strategic asset... there is very little that they can do about their carbon emissions given the nature of their business".
OneSteel chairman Peter Smedley will address the carbon tax in a speech to business in Adelaide today.
The company yesterday did not respond to questions about whether it was committed to Whyalla or if it was going to close or downgrade its operations because the steelworks was not making a profit, rather than because of a carbon tax.
But last Friday, the CEO of the Whyalla operation, Mark Parry, told a business group in Adelaide that "we've got a business that's not making any money and you can't put a further tax on that business and expect us to continue to invest and to hold jobs".
There have been iron ore mining operations at Whyalla since 1901, when the then Broken Hill Proprietary Company, now BHP Billiton, founded the town.
Debate about the future of Whyalla has been heated in recent weeks. Mr Abbott recently warned locals on ABC regional radio that "the carbon tax will suck the economic life out of Whyalla".
Greens senator Sarah Hanson-Young thrust Whyalla back into the national spotlight this week by claiming the city could transform itself into a hub of wind energy if the carbon tax forced OneSteel to close its operations, while understating by more than 3000 the number of jobs the company was directly responsible for.
Ms Breuer, who has held the safe Labor seat of Giles, with its main population centre of Whyalla, since 1997, said OneSteel would first close its rolling mill, where they make steel beams, with the loss of 300 to 700 jobs. "In the short term, it would have a major impact on Whyalla and the loss of hundreds of families," Ms Breuer said.
She said it was easier for OneSteel to exit the town under the cover of a carbon tax, regardless of assistance offered by the Gillard government. "I would hope that that's not the case, but while it is an Australian company, its headquarters are not in Whyalla and perhaps they don't understand the impact on the town this would create," she said.
©theaustralian.com.au
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