POLITICS

The Biggest Steel City In The Country Is Hurting. But It's Never The One You Hear About.

Whyalla is a hot-button issue. Politicians don't even visit Wollongong.

16/06/2016 2:00 PM AEST | Updated July 15, 2016 12:54
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The Port Kembla steelworks

There's a steel town on the Australian coastline that is hurting. It's an area of high unemployment, low socioeconomic factors and a whole lot of steelworkers and fabricators who have never been anything other than steelworkers and fabricators. The dual hits of the end of the mining boom and the flooding of global markets by cheap Chinese steel has eaten away at the profitability of the economy. It's a town built on the steel industry, and those foundations are crumbling.

But it's not Whyalla. It's not the Arrium plant on the South Australian coast that we've been hearing so much about. There are no submarines being built here; no hastily hammered-out deal for a massive rail project that will give the steelworks and its employees some light, some hope, some money. This town is called Wollongong, it has the biggest steelworks in the country and is the 10th biggest city in Australia, it is under pressure, and nobody is talking about it.

"It is outrageous that you have the greatest international crisis in industry, the steel crisis, and here in the Illawarra it's ground zero in this crisis, and the Prime Minister and Industry Minister have not bothered to even visit," says Arthur Rorris, secretary of the South Coast Labour Council.

"They have not even set foot in the joint. To ignore this area for so long, it speaks volumes about the neglect and impotence of the government's industry policy."

Steel City

The Illawarra region, with Wollongong at its heart, is a long, narrow strip about 90 minutes south of Sydney. Bounded by mountains on one side, the Pacific Ocean on the other, it is a region built on surf and steel, leisure and labour. The mountains are rich in coal deposits; the mineral was first documented in the north of the region by George Bass in 1797. Entire small suburbs sprang up around mining sites in the north. A refinery and smelting works opened at Port Kembla, just south of the Wollongong town centre, in the early 1900s, with a proper steelworks opening in 1927.

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The Port Kembla steelworks in 1948

Since its birth, the town has been built on steel, manufacturing and mining -- the local rugby league team was even called the Steelers before merging with the St George Dragons -- but downturns in production and profits have seen the Bluescope steelworks employee base dwindle from a peak of 22,000 in the 1980s glory days to around 3000 today. The closure of a furnace in 2011 saw 800 jobs cut, and Bluescope quit the export market, as the company blamed high Australian dollar, low demand after the Global Financial Crisis, and international competition. In 2015, it was revealed the company had investigated whether it should quit Port Kembla steel production altogether and instead import materials to finish and fabricate.

Several coal mines shut or dramatically scaled down due to falling demand or company mismanagement, with hundreds of miners joining steelworkers in unemployment queues. Youth unemployment is at 15.4 percent, above the national average of 12 percent, while overall unemployment of seven percent is above the national 5.7 percent rate as well. If the steelworks closed, unemployment in Wollongong is predicted to double -- not just due to retrenched workers, but the thousands of workers in associated industries like equipment supply, transport, contractors and clean-up crews.

But there's no talk of a 'Wollongong wipeout', no politicians singing about Bluescope in the courtyards of Parliament House.

Whyalla's Arrium steelworks has rightly attracted more attention than Port Kembla. The Arrium plant entered administration earlier this year, and has been the subject of crisis meetings and assistance. The decision to build the government's new submarines and naval vessels in South Australia was seen as a lifeline being thrown to the company and the town, despite no concrete promises yet to use their steel. The government has also brought forward a 600km rail project, to be built with Whyalla steel. Malcolm Turnbull reportedly even discussed Arrium with U.S. President Barack Obama in May. But besides a $670,000 "adjustment package" for retrenched workers in December, little such assistance has come for the Port Kembla steelworks, local advocates say.

Labor, too, has seemingly forgotten about the area. They chose the Port Kembla steelworks to announce their steel plan in April, which included lowering thresholds for infrastructure projects to consider the use of local products and industry, and a plan to tighten controls on dumping of cheap overseas steel, but stopped short of mandating Australian steel in government projects. Compare that to Arrium, which on Thursday received a $100 million boost from Labor, who had also lined up an extra $50 million from the state government, to "secure more than 3,500 South Australian jobs and lock in a strong steel future for Australia".

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Bill Shorten visits Port Kembla's Blue Scope Steel in April

Why? It might have something to do with the fact a Liberal MP has never won the two seats that overlap the Port Kembla area, Cunningham and Whitlam; that in the combined 99 years the two seats have existed, a non-Labor MP has only been in office for two years, after a slight aberration in 2002 when Cunningham was narrowly won by the Greens at a by-election, then quickly won back by Labor at the next federal election in 2004.

"Governments of both sides have neglected this area at times," Rorris said. He's the head of the local peak body for trade unions, and has been one of the drivers of a Save Our Steelworks campaign in recent years. You might have seen his face when he and other union officials picketed Malcolm Turnbull's press conference in south-west Sydney last month, petitioning him to travel to the Illawarra and Port Kembla. He's still waiting for the PM or Pyne to visit.


"It's unfortunate but no surprise that the government will focus on marginal areas. It doesn't surprise the locals that they're being neglected, that they're not seen as important to government as being in a marginal seat."

"It does show the short-sightedness of government. They invest so much in getting marginal seats over the line that they compromise the ability for the whole country to support itself. We have the engine room of the federal economy here, no doubt."

As local members Sharon Bird and Stephen Jones point out, Bill Shorten did announce Labor's steel policy on the grounds of the Port Kembla facility in April. However, he stopped far short of what the local campaign was pushing for, which includes mandatory minimum targets for use of Australian steel in government infrastructure projects. Shorten did better than Turnbull or Industry Minister Christopher Pyne, whose absence from the area and lack of action on local issues has been well-noted by the local newspaper, the Illawarra Mercury.

"There is a very strong perception in this region that we have been neglected," Rorris said.

Wollongong Lord Mayor Gordon Bradbery thinks the same, saying the Illawarra is taken for granted by Labor and forgotten by the Coalition.

"I think Labor certainly does, they're safe Labor seats," he said.

"Stephen Jones is probably meeting the challenge best, but they're both capable local members... Stephen and Sharon, on a personal level, are some of the most successful members we've had."

"But governments haven't necessarily been favourable to us. There are other priorities...we only get the crumbs from the master's table, as I put it."

Jones and Bird dispute that Labor didn't do enough for the region, citing plans and concessions for the steel industry under the last Labor administration.

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Sharon Bird and Stephen Jones, overlooking the steelworks

"The only reason the steelworks is open today is because of the plans we put in place. The rollout of the NBN, more cable going into the ground than any other region in the country. Investments in the university," Jones said.

"In 2010, the last big upheaval, Julia Gillard was here twice. Millions for retrenched workers, a lot of action taken, a lot of commitment to the region," Bird claimed.

The day The Huffington Post Australia visits the Illawarra, Turnbull is in the next electorate south, the marginal Liberal seat of Gilmore, announcing more than $1 million in election sweeteners including a redevelopment of the Ulladulla waterfront and a community-run respite care centre.

"I see he couldn't find his way to Port Kembla," Bird scoffed.

"It has been very disappointing, this government's response; not just during the election campaign but also when we found out what we were facing with Bluescope in 2015. Ian McFarlane [former industry minister] came down and had a big roundtable with people from the region, we welcomed that, put some proposals forward. Then nothing happened, not a thing."

"Not just us at a political level, but for the community, it's a frustrating process for government engaging with the region. Government has a responsibility to the country, and that includes out region."

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The Bluescope Steel Port Kembla plant

Bird and Jones and Rorris all cite major, long-awaited infrastructure upgrades which have gathered dust for years. Improvements to the notorious Appin Road are one. The completion of the Maldon-Dombarton rail link would better connect the port deliveries to their Sydney destinations, and help ease congestion on the commuter rail lines which heavy freight delivery trains currently have to use in absence of any other option, but it too has sat neglected for years.

The sudden attention on Arrium -- the splashing of cash, the relentless calls for naval vessels to be built in South Australia, the bringing forward of the rail line that would give Whyalla workers a much-needed project to work towards -- was seen as the final straw for local advocates.

"It pisses everyone off that during our battles, when it looked likely that Bluescope was going to shut its doors last year, the government would not lift a finger. It is unacceptable, the contempt the government holds this region in," Rorris said.

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A worker walks among the steel coils produced at Port Kembla

"Arrium and Bluescope are two sides of the coin that is the Australian steel industry. If either Port Kembla or Whyalla dies, it is bad news for the other."

Bob Timbs is the district vice-president of the Construction, Forestry, Mining and Energy Union (CFMEU), who look after miners in the region. Less steel produced at Port Kembla means less coal needed; less coal means fewer miners.

"I don't believe government is doing enough. Our local politicians are all over it, but the federal government could be doing more. Jesus, they could at least be using Australian steel," he told HuffPost Australia. He cited local projects like the 2011 upgrade to WIN Stadium, the region's premier sporting facility, which used Chinese steel rather than steel produced at Port Kembla just kilometres away -- literally within eyesight of the ground.

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WIN Stadium, with the steelworks in the distance

"Absolutely there should be some legislation in place, that it's mandatory a certain amount of local products is used in construction. When they did the big upgrade [of WIN Stadium], they built it with imported steel. There's a steelworks just down the road and they used imported steel. Business needs to look at where we are, with locally made products," Timbs said.

All sides concede that the woes of Whyalla and Port Kembla stem from dumping of cheap, sometimes below-cost, steel from overseas on global markets. Dumping of Chinese steel is recognised as a global issue, and was part of the conversation Turnbull had with Obama, on how to combat the trend while not endangering free trade deals. Christopher Pyne announced in April that Australia would increase tariffs on Chinese steel entering Australia, admitting cheap imported steel had "caused material injury to Australia's steel industry". Again, while Whyalla was included in the press release as a beneficiary of the government's policy, Port Kembla was forgotten.

"The Australian Government is working to sustain the local steel industry, while acting within World Trade Organisation rules," Pyne said in a statement.

Stephen Jones says the government can do more, even considering free trade agreements, such as placing standards for steel quality on infrastructure projects – cheap Chinese steel may not meet those standards, but Australian steel would.

"There are some trade obligations that we have, but we can mandate Australian standards and take an activist approach to Australian content. There's absolutely nothing wrong with the government saying to the submarine bidder, 'give us a plan how you will use steel made in Port Kembla in this project,' it would send a clear approach," he said.

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Arthur Rorris speaking during a Save Our Steel rally in Wollongong

Rorris said more should be done to balance free trade with supporting local industry.

"You have the government mostly, but the opposition too, operating in this neo-liberal fantasy land, heads in the textbook, talking about competition. [Steel dumping] is not competition, it is predatory behaviour by the big boys in the industry world. The U.S. has put up tariffs to block a predatory practice. But we're still pretending it's a competitive world," he said.

"Australia should put as much faith in our manufacturing and production as they do in these discredited free trade agreements. I'd prefer to put my faith behind Australian industry."

In response to Defence Minister Marise Payne's assertion in April that Australian steelmakers don't produce the "particular variation of a high tensile steel" needed to product the Navy's new patrol boats, Jones is blunt.

"Bullshit. [The Illawarra] can and they do. Tell us what you want us to make and we'll make it," he said.

An Illawarra-based fabricator, Bisalloy, claimed they can make that sort of steel, and regularly do, for projects like tanks, frigates or submarines.

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A Bluescope worker at the steelworks

The future

As the steel industry in Wollongong wound back, it has been replaced by a services-based economy. A thriving café and restaurant culture, a bubbling bar and nightlife scene, the university and healthcare and aged care have sprung up as the major players in the Illawarra, which has added to its long-standing status as a holiday destination.

"It's an economy in transition. We have many, if not more, working in healthcare, social assistance and aged care than working in heavy industry and engineering," Mayor Bradbery said.

"Steel isn't playing as big a role as it used to be, the local economy is diversifying. Whyalla is still primarily focused around steel but we don't have that anymore. Steel is a big player, but with the other industries too. We're transitioning into a lifestyle city. People in the southwestern suburbs of Sydney see us as their playground, the coastal experience city."

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Bodyboarders at North Wollongong beach

Rorris is more cautious.

"The bird in the hand, as opposed to the two in the bush, is the manufacturing sector. We're getting mixed messages federally, that they've got this plan for jobs and growth but not our jobs or the growth of this area. If jobs are not manufacturing or coal, where are they?" he asked.

"This is a population that is underskilled. How can you have these aged care facilities without trained nurses? What's happening to our training? Our TAFEs are closing or being underfunded. Politicians are telling us to diversify, but on the other side, they are taking away the infrastructure we need for training, the TAFE sector."

It has been six weeks of the mammoth election campaign, and neither Shorten nor Turnbull has made it down to the Illawarra yet. Nobody really expects that to change.

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The Port Kembla steelworks

"It's often argued that being a marginal seat, you get the attention," Bradbery said.

"But in spite of that, we've had billions of dollars in private investment in our CBD going on now, cranes on the landscape, revitalisation. People have realised Wollongong is not a bad place to invest. Our future is quite strong."

But perhaps the last word should go to Greg, who left a comment on the Facebook page of Michelle Blicavs, the Liberal candidate for Bird's seat of Cunningham, on Wednesday: "What in the name of god will you deliver to the people of the Illawarra, I imagine the the same as Labor, sweet f..ck all."

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